The Green Regulatory Arbitrage: Making the Case for Investing in the US Cannabis Industry

David Wenger will discuss how federal illegality has created a once-in-a-lifetime-type regulatory arbitrage opportunity, a striking mismatch of risk and reward driven by an enormous knowledge and valuation gap. At present, large institutional and related-industry investments into cannabis companies are precluded, and the industry faces shuttered US capital markets, limited banking, and extortionate taxation. The end of Prohibition will open the investment floodgates, and at the same time the onerous illegality-related burdens will end, exponentially raising valuations. Large US multi-state, vertically-integrated operators in East Coast and Midwest markets are positioned to capitalize – as brand and ancillary kingmakers, protected by licensing barriers, with no local black market cultivation competition, and having key advantages obtaining new licenses and navigating regulations

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