#13 - NoMo Easy Money - Welcome to the Correction

Cannabis Investing Network

In this episode we discuss the new reality of the Cannabis Market - corrected values and the end of easy money

1) The Correction -- How did we get here?

- Natural transition from a hype-driven to a results-driven environment

- Using real estate developments as an example (selling the sizzle vs the steak)

- How the overall sales numbers are WAY off the projections ($4.6B vs $1B)

2) What is Easy Money?

- Lack of due diligence; "sizzle" driven investing

- Emotion driven investing style

- Focus on upside instead of risk mitigation (Greed > Fear)

3) The Effects of Easy Money

- Asset prices / Company Valuations start to rise rapidly

- How this has happened in Real Estate since 2008

- Attracting shady players ("promotes")

- Speculative behaviour of investors chasing comparable gains

4) What Next? What does this mean for investors?

- Resetting values can be attractive for investors

- "Cashed up" players can take advantage of this downturn through M&A

- Investors need to pay closer attention to margins: gross and net

- Cash and Cashflow are extremely important

- Focus on companies who have a proven ability to execute and make money

- How a failing company can create an investing opportunity in a winning company

Bonus: Manish and Abi make a $3 Billion Dollar Bet for 2020