The Marijuana Business Conference & Expo in Las Vegas bills itself as the largest cannabis conference in the world. It hosts the largest pot companies, including Aurora Cannabis Inc. (TSX: ACB.TO), Canopy Growth Corp. (TSX: WEED.TO) (NYSE: CGC.N) and Tilray Inc. (NASDAQ: TLRY.O). Each of those has gone from weed upstart to over $10 Billion in market cap in short order.
And while many of those represented are Canadian companies, U.S. producers are on the rise. Many of the American companies represented at the conference make ancillary products, such as technological rolling machines and yeast-based synthetic cannabinoids.
Large consumer product companies are watching the space, and the presenters, closely. With wildly varying industry-size estimates – from tens of billions to $500 billion by 2030, they’re right for doing so.
In the meantime, bellwethers of a rapidly developing industry abound. Canopy Growth Corp., for their part, may be preparing for the edible industry. That company recently purchased a former Hershey (NYSE: HSY.N) chocolate plant in Smith Falls, Ontario.
Banks creating hurdles
Hurdles still firmly exist, however. US banks, and some in Canada won’t lend to cannabis companies. The threat of repercussions from federal regulators is just too high.
Loans aside, many large pot companies can’t even open an account at JPMorgan Chase (NYSE: JPM.N) or Wells Fargo (NYSE: WFC.N). Furthermore, cannabis companies pay tax, however operating expenses aren’t deductible under United States tax laws.
Changing tide of opinion
However, while the drug is still federally illegal in the United States, and only newly legal in Canada, a general acceptance is beginning to cloak the industry.
Midterm U.S. elections indicated a sweeping change in general attitudes toward marijuana. Pot opponents such as Texas Representative Pete Sessions lost seats. Moreover, 3 states voted to legalize cannabis.
In even better news for the industry, the President asked one of the biggest opponents of marijuana to step down – U.S. Attorney General Jeff Sessions.
In the meantime, Cannabis companies and their executives are gaining respect. When Canopy Growth Corp. debuted on the New York Stock Exchange (NYSE), Wall Street all but shunned the company. The Exchange forbade it from ringing the New York Stock Exchange bell upon listing.
Just a few short months later, Morgan Stanley (NYSE: MS.N) invited Bruce Linton to speak at a conference. Bank of America (NYSE: BAC.N) and Goldman Sachs (NYSE: GS.N), moreover, worked on Canopy’s Constellation deal.
Institutional money manager Vanguard is one of Canopy and Aurora’s biggest shareholders. All of that increases major cannabis companies’ ability to raise institutional dollars, bolstering their respectability.