"Entrepreneurs are focused on the launch of recreational marijuana in California, but another significant market, the entire country of Canada, will also be opening to adult-use cannabis. Deloitte estimates the market will be at least $5B in sales in 2018, with an ancillary market of associated goods and services that could add another $20B.
Marc Lustig, chief executive officer of CannaRoyalty, a company holding investments in about 20 legal marijuana companies in the US and Canada, is ready he says, for “the opportunity of our lifetime.” Lustig, who has worked in both the pharmaceutical industry and capital markets, believes that, “Recreational cannabis use could be as big as alcohol, and research will discover medically transformative effects.”
Indeed, a recent study at the University of New Mexico recently identified a strong correlation between enrollment in a Medical Cannabis Program and reduction of opioid use. The industry is far from saturated says Javier Hasse, a reporter who writes about Cannabis, “there is plenty of room for technological advancements and product differentiation.”
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Launching his portfolio of investments three years ago, Lustig hoped to offer investors a place in the new economy, but mitigate their risk by diversifying the offerings along product type, geography, and financing types. CannaRoyalty focuses on brands and assets that will not become commoditized like the raw production of cannabis could.
The company invests in product manufacturers and processors, but also looks for ancillary businesses that don’t “touch the plant.” Two areas with the most potential according to Lustig. “Edibles and beverages get a lot of press,” he said, but there’s also money to be made in new machinery, like ones that pre-roll and pack cannabis joints."...
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