Potfolio. Get It?
POP QUIZ! Remember last week when we talked about how cool it was that banks are full-on supporters and cheerleaders for cannabis businesses?
By Josh Jardine
Trick question. Actually, last week I wrote about the exact opposite of that. It turns out that obtaining and keeping even a simple checking account is difficult beyond measure for legal cannabis enterprises. I didn’t even touch on how impossible it is for a canna business to get funding from a traditional bank. It was sort of a bummer column, actually.
Another avenue is a CPO, and not the sexually ambiguous gold-plated character from Star Wars. A Community Public Offering gives local businesses an option to avoid national banks altogether, and endorse and support alternative funding mechanisms. This differs from donation-based crowdfunding such as Kickstarter and Indiegogo, because CPO investors get their money back plus interest; additionally, most online crowdfunding services have restrictions on supporting cannabis-based endeavors. I know, big shock.
As a way to fund their transition from website to brick-and-mortar flagship storefront, the folks at Smuggle Portland are offering investors “notes” at $500 each, at a minimum of two and maximum of five per individual investor. They began on June 1 and will continue to raise money until May 2017, with a goal of raising a total of $250,000. They won’t access the capital (i.e., spend any money) until they’ve reached a minimum of $50,000. Investors receive an interest-only payment of five percent annually on their notes, and the notes mature and are due three years from the closing date.
Smuggle Portland points out that the local ancillary market surrounding cannabis—meaning the typical stuff that head shops sell—is somewhere around $400 million a year. That’s a helluva lot of rolling papers and bongs, but speaking as someone with an entire cabinet filled with all forms of vaporizers, rolling papers, bongs, pipes, chillums, and one-hitters, I can verify that stoners like to shop. (And hoard, but we aren’t going to cover that topic this week. We may never cover it.)
Are there risks? (Are you high?) As with any investment opportunity, or tryst with a drummer, the answer is of course. Example: If Trump gets elected, the recreational use of cannabis in Oregon could possibly be reversed, probably shortly before our life-ending nuclear exchange with China. And if Hillary gets the gig (and lightens the fuck up), wholesale national legalization of cannabis could maybe bring in players like Amazon, in which case you’ll be getting your quarter of Raspberry Kush delivered by drone two hours after placing your order. Point being, I’m a cannabis columnist, not a clairvoyant—and I’m definitely not an investment advisor, so you should probably consult with someone with financial acumen before spending your loot.
The views expressed herein are the authors and do not reflect the opinions of KushCA. As with all investing there are risks involved. Always consult with a financial advisor.