With 28 states legalizing medical marijuana and eight going one step further with legal recreational use, the cannabis business is booming. But since the drug isn’t yet federally legal, there are still bureaucratic roadblocks for investors looking to go legit on the weed-equivalent of Wall Street.
One barrier weed advocates and entrepreneurs encounter is the U.S. Drug Enforcement Administration’s (DEA) classification of the drug. Marijuana is classified as a Schedule I drug, or “substances, or chemicals defined as drugs with no currently accepted medical use and a high potential for abuse,” according to the federal government. These groups weed with more serious and dangerous drugs like LSD, ecstasy, and heroin. However, the National Commission on Marijuana and Drug Abuse issued a series of reports concluding that marijuana was “less a serious threat to public health than a sensitive social issue and recommended changes to federal law that would permit citizens to possess a small amount of it at a time, while still maintaining that the drug should not be legalized.” Weed’s misclassification poses restrictions for patients in non-weed-friendly states who are seeking marijuana to treat serious illnesses. Its Schedule-I title also puts a damper on investors’ plans: The Financial Industry Regulatory Authority (FINRA)—the chief regulator of Wall Street—blocked an S-1 filing from weed companies attempting to go public and trade stock until the drug is re-scheduled.
While Doran is confident he wants to invest in cannabis flower cultivation, CBD products or testing facilities, he is a newcomer to the exploding industry. He needed guidance, so he ponied up the money to attend the inaugural MJAC2017 Investors Hub International Cannabis Conference last week.
Held at the shiny, towering J.W. Marriott hotel at downtown’s L.A. Live, this two-day event marketed itself as bringing together “the best minds in the market” to highlight top-notch cannabis ventures and address changing regulations in California and beyond. Access to the conference wasn’t cheap — tickets cost $125 for a single day, $200 for both or $50 for live streaming access — but Doran made the most of his money. Partway through the first day, he had already nailed down a few leads and spoke excitedly about a potential investment opportunity in the form of a grow operation that owned a lot of acres and was equipped to expand the industry.
In addition to cannabis ventures making financial sense to him, Doran said he’s driven by a much more personal motive. His brother’s granddaughter has severe health issues, he said, and while he implored her family to give her CBD products, they refused mainly because they live in Iowa, where it’s illegal. So Doran doubled down on his mission to educate them on the health benefits of cannabis, something he is familiar with first-hand.
“I’m high one day and depressed the next,” he said. “I can get up in the morning, put on my coffee, and I smoke a small little bowl of this weed and I’m mellow. … This stuff works. “
Doran wasn’t alone in this sentiment. While not all attendees were personal users of cannabis (well, at least one person I met wasn’t), they were nearly all enthusiasts. There were 50 exhibitors and dozens of speakers, expert panels and workshops, stacked from about 9 a.m. to 5 p.m. each day. Sessions covered everything from the weed industry in Canada to technology in cannabis and the testing-lab landscape in California. Hosted by InvestorsHub, a retail investor network intended to give investors a forum for sharing market insights, the event was loosely structured around answering one looming question: Is investing in the cannabis industry a safe bet?