I had a terrible head cold – but the message got through.
No, it was more than a message…
It was a revelation.
It was back in June, and I was on the floor of the Fourth Annual Cannabis Business Summit & Expo in Oakland, California. My head was fuzzy due to the combo of viral infection and strong cold medicine, but I knew the conversation I was in was important.
I was talking to Chet Billings, CEO of legal cannabis investing company Mentor Capital Inc., and he was trying to explain the importance of compliance in his business. He was talking about cannabis companies’ need to follow all state and local business regulations – and to track their compliance.
Billings told me that we’re now approaching an era when mergers and acquisitions among marijuana companies are starting to happen. And buyers will only go after smaller firms of the highest quality. If they don’t have their compliance in order, he said, those acquirers will keep on trolling for more attractive fish.
The stakes are high, Billings said, and a lot of smaller operators simply don’t have experience with government regulation or the manpower to pay it the attention it needs without tech software to do the heavy lifting.
I must have still looked confused, because then he put it to me in a way that I, as a lifelong movie fan, could understand: “It’s like in the 1980s and ’90s when video rental shops still proliferated the landscape.”
Eventually, Billings recalled…
Blockbuster came along and bought up the best video stores in each town. Hollywood Video picked up the second-best ones. And the dustiest, most unfriendly places got left alone – and went out of business.
“Why would you want a ratty, local dispensary that resembles an old video store?” Billings said. “One false key stroke is a permanent violation. You get enough of those noncompliance violations – and you lose your license… and any chance at being a success.”
That’s one of the reasons why I’ve frequently recommended Microsoft Corp. (Nasdaq: MSFT) as a “starter” pot stock. The tech giant has made a big commitment to developing legal marijuana compliance software tools for governments and businesses.
And it’s really just one of the many “lessons” I’ve learned while out on the trail this year that I’ve used to make some of my members a mint through investing in the right marijuana stocks.
Now I’m using those same lessons to bring you these five pot stock predictions for 2018. All five are catalysts that will really drive the marijuana market upward in the next year…
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