It’s A Green New Year As Investors Flock To Cannabis

221With greater force than ever, the investing crowd has decidedly moved into the marijuana industry over the last quarter.

According to analyst Michael Swartz, who works at the Manhattan-based cannabis-focused financial group Viridian Capital and Research, 2015 will be “a critical year” for the industry. This is mainly because of the success of marijuana legislation in Alaska, Oregon, and the District of Columbia, as well as the close victory in Florida.

These midterm results, he adds, will make lawmakers in other states more confident to introduce new initiatives in 2015, for ballot placement in 2016. This year could also see several more states legalizing recreational marijuana. Further, in 2016, legalization could be on ballots in seven to thirteen states, most notable of them California.

Among its services, Viridian identifies and tracks publicly traded cannabis companies. It also publishes stock index and a report analyzing stock performance, corporate announcements, and valuations in relation to industry trends.

The marijuana public market now sees the impact of increasingly large investments and increasingly known investors, especially over the last six months.

Arguably the most prominent of these was the investment made by Peter Thiel’s venture capital firm Founders Fund in the cannabis company Privateer Holdings. Thiel is known as an early Facebook investor and a Paypal founder, among the various other financial roles he puts his name on. Privateer, on the other hand, is the home of Marley Natural, an imprint of Bob Marley’s family itself. The company also owns testing labs and a dispensary listing service.

Meanwhile, another major investing firm, Arcview Investments, has made a different move in Colorado. It has committed money, in partnership with the organization CanopyBoulder, to build a business accelerator for young businesses in the cannabis industry. The accelerator program will select 20 startups in which it will invest $20,000 each this year.

As for public companies already established and performing well in the market, Swartz says they can expect a good year as well. He expects that investment funds will have increasing interest in taking equity stakes in cannabis enterprises, especially sector-specific ones. This is anticipated as valuations of public cannabis outfits continue to rationalize.

Swartz also agrees to most conventional analyses that three sectors will particularly thrive this year. These are software, physical security, and biotech. He adds that investors seem to have the same sentiment, as those three sectors are the top performers in Viridian’s Cannabis Stock Index.

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