Marijuana Stocks: How CEOs Can Navigate Market Volatility (And Survive Spicer And Sessions)
3/10/17, 8:39 AM
Cannabis stocks have been quite volatile recently, mostly driven by uncertainty surrounding what the federal government will do about legal marijuana. Looking to shed some light on how weed companies can handle and navigate these volatile markets while protecting their valuations, Benzinga reached out to Leslie Bocskor, investment banker and president of cannabis advisory firm Electrum Partners.
Mind The Long-Term
When dealing with publicly traded companies, people tend to lose sight of the long-term outcomes, Bocskor began.
“The fact that your stock trades on a day-to-day basis can be one of the greatest distractions for a public company’s CEO. You need to be focused on building the fundamentals of your business, making sure your communications are solid, and making sure that you have established a synergy between running the public company, which has its own essential needs that need to be met on a consistent basis, and making sure there is a synergy with your underlying business,” he continued.
So, when the current federal administration or any government official (like Press Secretary Sean Spicer or Attorney General Jeff Sessions) makes a comment that could have an impact on a certain business, executives “need pay attention to it, to make sure if there is something in there that’s really substantive of harm or benefit” and react accordingly, the advisor explained.
“More often than not, though, you need to pay attention to it while sticking to your knitting and just staying focused on the project that you have in hand, building your business. So, if you just focus on building the business everything will take care of itself,” he concluded.
A Few Examples
Seeking to clarify, Bocskor brought up a few examples.
He first shared a look at Growblox Sciences Inc (OTC: GBLX), a company focused on cannabinoid therapies – where he is a Independent Board Director and a beneficial shareholder.
“They [Growblox] are working on a number of different things. They have exposure to both a medical marijuana market in Nevada, an adult use marijuana market also in Nevada, and they also have hard science assets they are developing in life sciences, and they have technology and agriculture that they are looking to develop. So, it would be very easy for the company to get concerned [about how the federal government will treat medical and adult-use cannabis],” he explained.
“[However], they need to be focused on their business plan that got them to where they are, pay attention to what the comments are, and execute,” he supplemented.
Much like Growblox, Terra Tech Corp (OTC: TRTC) also has a good business model and has been increasing its focus on it, the expert went on. “[They] really know where their future lies and [are] trying to expand based upon that in areas that make sense.”
As per Bocskor, other companies that are doing “a great job at being focused on their strong spots” include: Kush Bottles Inc (OTC: KSHB), Solis Tek Inc (OTC: SLTK) and Grow Solutions Holdings Inc (OTC: GRSO).
Eyes On The Ball
So, to recap, the best way to navigate the market volatility recently generated by Sean Spicer and Jeff Sessions’ comments on cannabis is: “stick to your focus and your business, do your research, get engaged in government relations and finding out what’s going on, and don’t (as a public company) take your eye off the ball,” Bocskor ended.
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Disclosures: Javier Hasse holds no interest in any of the companies or entities mentioned above.
Leslie Bocskor serves in the Board of Directors of Growblox Sciences Inc and Grow Solutions Holdings Inc.
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