Billions of dollars in funding are waiting to be put to use while watching the global marijuana industry blossom.
Investor Kevin O’Leary of ABC’s hit show Shark Tank believes those funds will continue sitting on the sidelines until Congress legalizes marijuana on a federal level, Marijuana Business Daily reports.
O’Leary’s investment portfolio includes hundreds of businesses, and his message to marijuana industry entrepreneurs is simple: “The whole energy of the industry should be towards resolving the federal mandate.”
O’Leary, who will be a keynote speaker at MJBizConNEXT from May 9th to 11th in New Orleans, spoke with Marijuana Business Daily during a Q&A regarding some of the trends he’s witnessed and what he sees in the industry’s future. Below is part of the Q&A.
Any investing tips you’d offer for people who are already investing in the marijuana industry, in either the U.S. or Canada?
You have to be rather tolerant of volatility, because if you’re dealing in public stocks that involve marijuana, you have increased volatility in headline risk. And you have an evolving industry, so cash flows aren’t guaranteed in many situations. Therefore, in terms of return on investment, in many cases it’s just unknown.
It’s similar to the tobacco industry, which went through decades of regulatory changes and challenges, and it’s at a place now where it appears to have found a stable place in society. Obviously, there are major medical issues surrounding (tobacco), but its sales are heavily taxed, it’s heavily regulated and it’s important that tobacco be kept away from of children.
What tips would you give marijuana entrepreneurs who are seeking funding?
Entrepreneurs should focus on the states they’re based in, and seek local investors that don’t have reservations about federal compliance.
This is an industry that has the whole world examining it, all the pools of capital studying it, all the sovereign funds watching it, everyone’s looking at it. … There are billions of dollars waiting to invest in this industry.
How do you think the global marijuana industry will be impacted if Canada does legalize marijuana?
Canadians, just like with the mining industry, kind of lead regarding the development of new platforms in many countries globally. They’re the most advanced in leadership. It’s the same way with the new industry (recreational marijuana). But at the same time, it is difficult to attract institutional or sovereign capital into this industry. This industry requires billions of dollars to lay out its infrastructure and logistics.