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It is not easy investing in an industry with so many unknowns compounded by what may seem to some as the never ending influx of misinformation and misdirection. Now toss in a global trade war that some have speculated may expand to currencies and the real prospect of a global economic slowdown … these and more may lead to some obvious questions to ponder:
*Companies relying on equity financing at this time may face obstacles resulting in the need to finance at greater discounts, dilution, and incentives.
*Investors looking to participate in equity financings may defer or walk away or hold out hoping for a greater discount and/or strong incentives. Incentives could include attractive warrants, rights – as an add on or as riders.
*Will global distractions detract from the progress made in this industry?
*Will domestic distractions detract from the progress made towards ending prohibition?
*Will there be an increased rate of consolidation within the industry (M&A, asset buyouts, business failures, etc) as a result of the above and other factors?
*Will large companies sitting on the sidelines swoop in to acquire companies or key assets that exist in the legal cannabis industry?
The future is never known and it may just take a few agreements (particularly with respect to trade) and will all of the above be relegated to the irrelevant? But today’s present is yesteryear’s future. As we enter the dog days of summer I want to remind our readers of what was predicted in these pages in 2016. Not that long ago but in this industry three years may as well be decades due to the forces of Ecoforming.
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