Interview: Cannabis 2.0 with Token Naturals CEO Keenan Pascal

  
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This week's episode of Reformed Millennials is a special “Pot Pod” as we interview Token Naturals CEO, Keenan Pascal. Keenan is an ex-banker turned Cannabis company founder who has built an exciting Cannabis supply chain business that helps Cannabis brands turn their product dreams into reality. If you’re at all interested in public or private Cannabis markets, we cannot recommend this episode enough.

Listen on Apple, Spotify, or Google Podcasts.

If you aren’t in the Reformed Millennials Facebook Group join us for daily updates, discussions, and deep dives into the investable trends Millennials should be paying attention to.

👉 For specific investment questions or advice contact Joel @ Gold Investment Management.

If you want to learn more about Keenan and Token, visit their website here!


📈📊Cannabis Market UPDATE💵📉

The U.S. elections were on November 3rd and the victories were decisive and absolute. The American people cleared their throats and spoke loudly: they want a legal and regulated cannabis marketplace, and they want it now.

The long and misguided War on Drugs is coming to an end.

The clean sweep across New Jersey (adult-use), Arizona (adult-use), Montana (adult-use), South Dakota (adult-use and medical), and Mississippi (medical) was as lopsided as it was decisive.

At the federal level, the specter of a friendlier and more pragmatic Biden administration helped to fuel sentiment that regulatory change is afoot.

Quick Hits:

  • 16 million new customers added to the total addressable market (TAM)

  • 109 million Americans will live in a state where adult use cannabis is legal

  • January runoff going blue could swing the senate from red to blue

  • Cowen analyst Vivien Azer raised her total cannabis market projection to $34 billion by 2025

  • The Governors of New York, Pennsylvania, Rhode Island, Connecticut, and Virginia have begun posturing for adult-use cannabis in 2021.

Let’s look at the current U.S. cannabis landscape through 2 unique lenses:

Fundamentals: FANGafication of the Cannabis Industry

Green Thumb Industries has already secured its standing as one of those four horsemen after crushing their third-quarter estimates; despite the pandemic and onerous tax treatment. The market seems to be considering Curaleaf, Cresco, and Trulieve to achieve similar successes.

U.S. multi-state operator (MSO) valuations are in the bottom-third of all industry groups while sporting the highest revenue growth of any industry.

Matt McGinley, the keen-eyed analyst at Needham & Co., summed up the opportunity perfectly in the nifty graphic below, which was part of his recent must-read primer on the space.

Psychology:

Nearly seven out of ten Americans now support legalizing cannabis according to a recent Gallup poll, and numerous state governors and politicians from both sides of the aisle—including the Vice-President-elect—have lobbied to unwind prohibition and embrace the benefits. While 2020 has been a tough year for many, the state budget shortfalls and structural unemployment triggered by the pandemic, coupled with the nationwide social justice initiatives, have created a perfect storm for U.S. cannabis.

After a wild few weeks for cannabis stocks on both sides of the border, one of the greatest disconnects that remain is education and awareness.  Professional investors are using Canadian companies listed on U.S. exchanges as proxies for the U.S. operators, which are listed on Canadian exchanges and dominated by retail traders.  Only those paying attention will separate themselves as Cannabis 2.0 takes shape.

U.S. cannabis stocks are growth stories at value multiples, their total addressable market is multiplying, and the perceptional off-sides is arbitrage in itself.  Long-term investors certainly have every reason to be excited as this bull market matures; it will be bumpy, but generational opportunities await those who choose wisely and are able to separate the winners from the sinners.

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