With shareholders, IPOs and investors, the thriving canna-industry shows all the signs of the traditional business model
By Chris O’Keefe
Many businesses begin as a dream. For a self-starting entrepreneur, this is a skill that comes naturally. Getting a company successful enough to appear on the NASDAQ or the New York Stock Exchange with your own IPO and shares is no small feat in itself, though. With any booming industry—and the medical marijuana industry is no exception—you require more than the supplier and buyer. With the legal requirements and grey areas, all aspects of the business and its transactions must be covered. And above all, technology is a requirement in today’s corporate business model.
Companies such as General Cannabis, which provides doctor recommendations for medicinal cannabis and Internet technology for the industry, seem to be fruitful investments. General Cannabis recently bought the popular online dispensary listing and reviewer WeedMaps.com for $16.4 million in shares of common stock and another $3.6 million in promissory notes. That’s a total of $20 million for a website that serves as a directory of medical marijuana dispensaries throughout the United States. At press time, General Cannabis’ stock (CANA) sold for $3.40 per share.
Here in Colorado, Centennial Seed Co., a Boulder-based seed supplier, is raising $500,000 in a round of private financing. Colorado (along with a few other states) is known for having one of the most business-friendly MMJ environments and that is why we are seeing more attention and acceptance as the industry grows.
Another company by the name of Cannabis Medical Solutions Inc. recently announced in a letter to its shareholders its plans to expand and even produce subsidiary companies to further its reach within the industry. Cannabis Medical Solutions Inc. (CMSI) is a financial provider for medical marijuana-related small- to medium-sized businesses. The company handles things like business lending, payroll and even credit card processing, which has been difficult recently. American Express pulled its transaction processing from the industry because medical marijuana is not legal on a federal level, and working within the industry jeopardizes the federal insurance (FDIC) it receives. However, thanks to IPOs—and other means of investing—the public is now able to buy into these companies, further strengthening the medical marijuana industry, allowing companies to further cement themselves into the economy and forego having to rely completely on investments and private companies.
Medical cannabis will continue to expand and thrive. It is currently a $1.7 billion industry. We have 16 states with compassionate laws on the books and another 11 states with pending marijuana-related ballot measures. What this all means is that the industry is thriving on more than supply and demand; its fueled also by financial providers, general contractors, scientists, lawyers, tax attorneys, horticulture equipment suppliers—the list goes on and on. These demands for professional services are required to function—and grow—in today’s medical marijuana businesses world.
Now that we have medical cannabis turning into a profitable and an investment-worthy piece of the economy, it’ll all boil down to numbers and numbers don’t lie.
If one of the business world’s secrets is finding a niche, then Boulder-based Centennial Seeds has done just that. With a mission to provide high-quality seeds to Colorado’s MMJ community, the company takes its services and products very seriously. First of all, all seeds (sativas are its focus) are developed in the state (“Colorado is a very special place on the Earth” is the way Centennial’s website puts it). The company sells to licensed medical marijuana centers and commercial growers (including licensed caregivers). And the company is 100 percent locally owned and operated.