Big name investors are dipping their feet into marijuana
https://nypost.com/2018/09/03/big-name-invest...marijuana/
By Carleton English
September 3, 2018 | 12:25am
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Leon Cooperman
Leon Cooperman Reuters
Pot stocks aren’t just for suckers anymore.
Five years ago, when California and a few other US states started legalizing marijuana, the internet lit up with weed-driven penny-stock scams. Now, shares of marijuana companies are beginning to attract a few big-name investors.
Billionaire Leon Cooperman piped up on a recent earnings call for Green Thumb Industries, a Chicago-based grower and seller of medicinal cannabis that recently went public in Canada.
The 75-year-old hedge fund tycoon asked a few questions about pot legislation in Illinois, acquisitions in the space and the outlook in California — and revealed after the call last week that he has invested in the company.
“It’s a small personal investment as a result of my friendship with the CEO and his father,” Cooperman told The Post in an e-mail.
As it turns out, Green Thumb Chief Executive Ben Kovler is a scion of the Jim Beam bourbon empire, and Cooperman is a longtime family friend. But that doesn’t mean deep-pocket folks like Cooperman can’t also find good fundamental reasons to plow into pot stocks, according to Kovler.
Nine states and Washington, DC, have legalized recreational pot. While US Attorney General Jeff Sessions has reminded companies that it’s still illegal at the federal level, some players are placing large bets on growth.
Last month, Constellation Brands, the brewer of Corona beer, stunned Wall Street by investing nearly $4 billion into the shares of Canopy Growth, a Canada-based pot farmer. Canopy shares soared 37 percent in a single day.
“This year has been an entire sea change in institutional attention,” Kovler told The Post, predicting the “rate of change will continue to increase.”
Prominent pot stocks include Tilray, a Canadian medical pot supplier, which had its Nasdaq debut in July. Acreage Holdings, whose board of advisers includes former House Speaker John Boehner, privately raised $119 million in July and is aiming for an initial public offering in the fall.
Last week, Green Thumb said it turned a profit as its second-quarter revenue nearly tripled to $13.6 million. The company’s shares have soared 50 percent since their June 12 launch.
Another notable investor in Green Thumb is Marcato Capital. The fund’s boss Mick McGuire — a protege of activist investor Bill Ackman who has gone after companies like Buffalo Wild Wings and Deckers, the owner of Ugg Boots — appears to be taking an uncharacteristically mellow approach with a 2-percent stake.
The shares “were acquired for investment purposes only and not for the purpose of exercising control or direction over the issuer,” Marcato said in an Aug. 22 filing.
Reps from Marcato declined to comment further.
Not all weed stocks are delivering reliable highs to investors. Last week, Andrew Left of Citron Research disclosed a short position on Cronos Group, calling the cannabis cultivator “all talk” and noting its underperformance. Shares plunged 30 percent Thursday.
“[The cannabis] industry is real but the stocks are overheating,” Left told The Post.
“The business could be big but that doesn’t mean it’s a gold rush,” he added, drawing a comparison to the flopped rally in bitcoin-related stocks late last year.
“Everyone wants to chase the next thing,” Left said.
https://nypost.com/2018/09/03/big-name-invest...marijuana/
By Carleton English
September 3, 2018 | 12:25am
Modal Trigger
Leon Cooperman
Leon Cooperman Reuters
Pot stocks aren’t just for suckers anymore.
Five years ago, when California and a few other US states started legalizing marijuana, the internet lit up with weed-driven penny-stock scams. Now, shares of marijuana companies are beginning to attract a few big-name investors.
Billionaire Leon Cooperman piped up on a recent earnings call for Green Thumb Industries, a Chicago-based grower and seller of medicinal cannabis that recently went public in Canada.
The 75-year-old hedge fund tycoon asked a few questions about pot legislation in Illinois, acquisitions in the space and the outlook in California — and revealed after the call last week that he has invested in the company.
“It’s a small personal investment as a result of my friendship with the CEO and his father,” Cooperman told The Post in an e-mail.
As it turns out, Green Thumb Chief Executive Ben Kovler is a scion of the Jim Beam bourbon empire, and Cooperman is a longtime family friend. But that doesn’t mean deep-pocket folks like Cooperman can’t also find good fundamental reasons to plow into pot stocks, according to Kovler.
Nine states and Washington, DC, have legalized recreational pot. While US Attorney General Jeff Sessions has reminded companies that it’s still illegal at the federal level, some players are placing large bets on growth.
Last month, Constellation Brands, the brewer of Corona beer, stunned Wall Street by investing nearly $4 billion into the shares of Canopy Growth, a Canada-based pot farmer. Canopy shares soared 37 percent in a single day.
“This year has been an entire sea change in institutional attention,” Kovler told The Post, predicting the “rate of change will continue to increase.”
Prominent pot stocks include Tilray, a Canadian medical pot supplier, which had its Nasdaq debut in July. Acreage Holdings, whose board of advisers includes former House Speaker John Boehner, privately raised $119 million in July and is aiming for an initial public offering in the fall.
Last week, Green Thumb said it turned a profit as its second-quarter revenue nearly tripled to $13.6 million. The company’s shares have soared 50 percent since their June 12 launch.
Another notable investor in Green Thumb is Marcato Capital. The fund’s boss Mick McGuire — a protege of activist investor Bill Ackman who has gone after companies like Buffalo Wild Wings and Deckers, the owner of Ugg Boots — appears to be taking an uncharacteristically mellow approach with a 2-percent stake.
The shares “were acquired for investment purposes only and not for the purpose of exercising control or direction over the issuer,” Marcato said in an Aug. 22 filing.
Reps from Marcato declined to comment further.
Not all weed stocks are delivering reliable highs to investors. Last week, Andrew Left of Citron Research disclosed a short position on Cronos Group, calling the cannabis cultivator “all talk” and noting its underperformance. Shares plunged 30 percent Thursday.
“[The cannabis] industry is real but the stocks are overheating,” Left told The Post.
“The business could be big but that doesn’t mean it’s a gold rush,” he added, drawing a comparison to the flopped rally in bitcoin-related stocks late last year.
“Everyone wants to chase the next thing,” Left said.
