As cannabis law reform spreads across the U.S., an entire industry emerges from the shadows of the black market. That’s all marijuana legalization really is, the shifting of an already thriving industry into the land of legality. The customers and the products are there; now all that is needed are legal businesses to sell the products, drawing customers out of the black market and into the legal market.
This process creates a myriad of opportunities, especially for investors. In the past, investing in the cannabis industry meant giving money to a drug dealer. Not the soundest investment strategy by a long shot, which is why the only people investing in that manner were bigger drug dealers and criminal cartels.
Without investment an industry is nothing. Without capital it cannot grow, which means it will wither and die. On the other hand, investment can grow an industry exponentially in a short amount of time, depending on the product.
The more potential an industry has, the more investment it is likely to attract. You would have to go back in time pretty far to find an industry with as much potential as the legal cannabis industry. But even those industries didn’t have the major advantage that cannabis has: a large and already established consumer base.
For example, when Henry Ford started selling cars, they were expensive and most people were just fine with using their feet and horses to get from place to place. There weren’t millions of people already driving cars on the down low and just waiting for a chance to come out of the car-driving closet.
In fact, the only thing comparable is the legal alcohol industry after the repeal of prohibition in 1933. People had proven that they loved to drink and didn’t really care what the law said, pass the hooch! The speakeasies and illegal alcohol distributors saw their business decimated as companies like Anheuser-Busch stepped back in to dominate the market.
The point is, the legal cannabis industry is an investment opportunity like no other in history. A product that people know is going to be legal before it’s legal in most of the country and that has millions of consumers that already use it on a daily basis. A product many people are familiar with, people who are just waiting for a legal place to buy it.
But large scale investing is out the reach of most people, no matter how much potential they see. But there are people who are all-in when it comes to cannabis industry investment; people like Jason Spatafora, the “Wolf of Weed St.”
Jason has made a name for himself in a relatively short amount of time, especially when it comes to cannabis-related stocks. He is a well-known investor, one of the people behind WolfShot Hemp Energy shots. Jason is also the force behind MarijuanaStocks.com, a website that tracks news about the cannabis industry and its stocks.
I recently got a chance to talk with Jason about investing, the cannabis industry and more.
The Marijuana Times: What was your career before investing and what did you learn from it that helps you with investing?
Jason Spatafora: I was a consultant for one of the biggest disaster recovery firms in the World. I was a closer for them, and what I learned was that the better prepared I was in knowing who each client was made all the difference for in getting the biggest projects/accounts.
Always be over prepared, and know what the worst case scenario could look like.
MT: Why did you get involved in stocks and the business world?
JS: I got involved with investing around the spring of 2013 and I bought my first Marijuana Stock shortly after I watched Eric Holder, the then Attorney General, give a speech about how the DOJ would lay off states that had Marijuana related laws on the books so long as they followed 8 specific guidelines.
MT: What do you believe the future holds for cannabis stocks, long term?
JS: Long term I see Cannabis related stocks much like people saw Dot Com stocks in the late 90’s. They are risky, but my feeling is that from the many companies there will be the future PayPal’s and Googles in the industry.
MT: What is Budhubz and why is it and sites like it important for future of cannabis industry?
JS: Sites Like BudHubz.com and their related apps are the future of information for cannabis connoisseurs looking for efficiency technology in the cannabis space. A company like BudHubz is a bridge between all the products and services available to individuals searching for all the things that they may need, places they want to be and people they want to meet.
MT: What other projects are you involved with?
JS: I’m involved with an Incubator in Nevada that is tied to one of the largest commercial cannabis operations in the state. The reason I liked the incubator model is that we are currently involved in an industry that is worth billions of dollars and has no real established brands. With the incubator we can provide a cost effective means as well as a legal means for brands/companies to cross state lines by working under the umbrella of our cultivation licenses.
MT: What are some of the things people should do before investing in a cannabis business or stock?
JS: Take their time first and research companies, once they found the company they think they want to invest in I suggest they “paper trade it” (buy stock with fake money and keep track of how they do). At the end of the day the markets are risky and recognizing patterns that the companies trade in can make all the difference. Once they are ready to invest they have to take it slow and never invest what you can’t afford to lose.
The legal cannabis industry is still very new, and investment risk is everywhere, especially considering the very illegal nature of cannabis on a federal level. But with greater risk comes a greater opportunity for reward. The cannabis industry is going to be built by many people; as laws are relaxed these people will come in and take advantage of the new opportunities presented. You have to do your research and decide where you fit in, and if you fit in at all.
To those who haven’t been born yet, this will all one day seem far away. All they will see if a thriving cannabis industry; they won’t see how it had to be built from the ground up, and more importantly, they will not see why it had to be built. They will just hear stories about how marijuana used to be illegal, but people wise up and corrected a grave mistake.
But we were there. People like you and me and Jason Spatafora. We are, each in our own way, contributing to an industry that will bring untold prosperity to so many people and to the economy as a whole. There wasn’t a legal cannabis industry and we had to make one.
Dear Future, you’re welcome.
