How Technology Will Differentiate the Cannabis Industry

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Friends,

One of the big surprises over the past few years has been the relative dearth of publicly-traded cannabis companies with a technology focus. The few that exist haven’t been particularly successful in the stock market, and most investors have been more focused on companies that are involved in the cultivation, processing or selling of cannabis.

We think now is the time for investors and operators to pay particular attention to technology as an investment or as a point of differentiation among cannabis companies. This week, Flowhub, a cannabis retail management platform, announced a $23 million capital raise, so clearly there is interest in private companies involved in helping the cannabis industry scale.

In addition to retail, there are many different problems companies are trying to address, including compliance, data analytics and process improvement. Other areas of technology include physical solutions to improving yields, through lighting, genetics and nutrients, as well as better extraction methods and techniques. Additionally, especially in light of the current health crisis, technology can help produce safer extracts and hardware for vaping.

In particular, an area ripe for innovation is beverages. As Canada 2.0 kicks in, several businesses, some with backing from leading beverage companies globally, are focused on a market segment that has disappointed to date in state-legal American markets, but innovations in this area can help improve the demand, through more rapid onset and consistent dosing along with taste-masking and other attributes. We have heard a lot of promise, and we look forward to learning about new beverages as they are released in the next few months.

For investors, pure-play cannabis technology investments may be worth pursuing, but we think the importance of this theme extends to the analysis of direct cannabis operators, as we expect companies who invest in or acquire proprietary technologies will differentiate themselves in a crowded field of competitors.


Most commercial crops have a long and rich scientific research history, leading to successful breeding programs. This is not the case for cannabis. For many years, efforts to criminalize cultivation of the plant and its extracts have stifled research on the various strains and the genomic traits that influence them. Today, with many governments legalizing cannabis growth and sale, a period of rapid advancement begins – an exciting time for the industry.

NRGene, a genomics company that provides turn-key solutions for the cannabis industry has designed a full set of tools to empower efficient cannabis breeding, enabling growers to analyze and compare full-genome sequences of multiple varieties. Access to this new genomic information is allowing growers to efficiently and precisely develop new cannabis strains with the desired characteristics, dramatically decreasing the number of plants required for a breeding program, and reducing the time and cost needed to develop successful new commercial varieties.

To learn more, join NRGene for the free “Growing it Smarter” webinar and discover the potential in cannabis genomics.


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View the Public Cannabis Company Revenue & Income Tracker, which ranks the top revenue producing cannabis stocks that generate industry sales of more than US$5M per quarter.

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Find your place in the cannabis industry by visiting our Careers and Jobs Page and learn which companies are hiring aggressively.

Sincerely,
Alan & Joel

Exclusive article by Alan Brochstein, CFA
Alan Brochstein, CFA
Based in Houston, Alan leverages his experience as founder of online communities 420 Investor, the first and still largest due diligence platform focused on the publicly-traded stocks in the cannabis industry. With his extensive network in the cannabis community, Alan continues to find new ways to connect the industry and facilitate its sustainable growth. At New Cannabis Ventures, he is responsible for content development and strategic alliances. Before shifting his focus to the cannabis industry in early 2013, Alan, who began his career on Wall Street in 1986, worked as an independent research analyst following over two decades in research and portfolio management. A prolific writer, with over 650 articles published since 2007 at Seeking Alpha, where he has 70,000 followers, Alan is a frequent speaker at industry conferences and a frequent source to the media, including the NY Times, the Wall Street Journal, Fox Business, and Bloomberg TV. Contact Alan: Twitter | Facebook | LinkedIn | Email

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