What is it like being one of the world’s leading cannabis financial analysts? We set to find out by interviewing Alan Brochstein of New Cannabis Ventures and 420 Investors. A leading financial guru in the cannabis space, Brochstein is a former blogger at Seeking Alpha. You can catch him at the Business Conference on May 26, 2017 at the Lift Cannabis Conference and Expo in Toronto.
What does the typical day of Alan Brochstein look like?
So, I’m up at usually 5 AM. I just dive right into it, I usually get 75 emails a night and I start digging through SEC filings at that time. In the morning, I’m looking through a lot of press releases that come out, so I try to separate what’s valuable and what’s not.
Every day during the week I do a 10 to 15 minute video review of cannabis stocks for my subscribers at 420 investors before the market opens.
Throughout the day I do a number of things. I run model portfolios at 420 Investor. I may make adjustments to those. I’m reporting news throughout the days on publicly traded cannabis stocks. I try to find content that is worthy of publishing at New Cannabis Ventures. If something is important for the cannabis industry, whether a private or public company, I’ll publish it. Typically it is 4 or 5 articles per day. I’m spending time during the day doing business development for New Cannabis Ventures.
Every day I have a smoothie, I use my Vitamix. That’s my lunch every single day.
In between the hours of 11AM and 2PM, that’s when I try to have calls with people. After the market closes I spend 30 minutes to an hour reviewing data for the day, and creating a summary for the day, as well as another video for my subscribers. After that, I generally work through the dinner break until 10 or 11 PM night time.
I think bigger picture; what I’m doing during the day is wearing a lot of different hats—trying to stay on top of the publicly traded sector, for both my subscribers at 420 Investor as well as for the really good companies on New Cannabis Ventures, and also just trying to stay on top of the whole cannabis industry. So it keeps me pretty busy.
Q: You live in Houston Texas. Does it sometimes feel like you are a bit far from the action so to speak?
Sometimes that’s good and sometimes that’s bad. Luckily I am able to travel, so I do get out a little bit, but it’s hard because I’m usually very busy. There’s also an advantage, I don’t get too caught up in the scene. Groupthink is something that can often happen when you’re hanging out with the same people. I think being far removed really lets me work hard without being distracted, and keeps me away from that groupthink.
Are there any innovations in the cannabis field you are particularly excited about?
The are two areas of innovation that I watch for: one's technological and one’s branding on the consumer side. I think a lot of people view the market through the historical lens of it being a flower market, and while I think flower will always have a role, there’s just so many new opportunities, especially for new consumers entering the space. The kind of innovation I’m looking for is creating new brands that will appeal to the new entrants on the market, and also technologies that will enable consumption beyond even vaporization.
What is one thing Canada can learn from American states that have legalized it, and vice versa... what can American states learn from Canada's medical marijuana program?
That’s a really good question. Because that’s one of the the things about all the different regimes. In the United States I feel disappointed with our federal policy, but at the same time we also have states that are way ahead of Canada. The people who were on the task force visited Colorado and Washington, which are our most mature state markets. I’d say what Canada can learn from the US is from the product side, we have a lot of products that are available that are not yet available in Canada: extraction technology, edibles, things like that. There’s been a lot of problems that have been addressed in the US that haven’t been needed to be addressed in Canada because of mail order.
And then flipping it, hopefully what we will be able to learn from Canada is that you have a very limited, highly regulated program at a federal level. I think we can use that to figure out how to implement something like that in US. I think in the United States the regulators are going to learn about federal regulations and companies will learn what works and doesn’t work in Canada.
Can you share something with Lift's readers they might not know about you?
I already told you one, I have a smoothie every day for lunch. And I don’t eat wheat. I’ll share that. I was going to a cannabis conference in Vancouver in 2014 and a friend of mine, who I met through 420 Investor, sent me a book called Wheat Belly. And on that flight I decided I’m never going to eat wheat again. And that was a great decision.
How did you get into the cannabis field, and what general advice would you give to a young investor?
I just happened to stumble in. I was a blogger at Seeking Alpha and independent financial analyst from 2007 and on, and in 2013 I read an article on Seeking Alpha and learned that there were cannabis stocks, and it blew me away. I looked into it and there wasn’t really someone with a good financial background following the space, so I started following the space and the rest is history.
If a young person were to come to me, if they don’t know anything about stocks, I would tell them to embrace their enthusiasm and use this as a learning opportunity to learn about investing, to make them aware that is a very high risk industry. I would tell them to be cautious. Consider it a learning process. It’s good to have this passion but careful, because some of these stocks can be risky. But it’s a good thing to start learning how to invest in general, but don’t spend your winnings yet is what I would tell them.
Hear Alan Brochstein speak about cannabis stocks and give investment advice at the Business Conference on Friday, May 26 on the Investing in Cannabis panel at the Lift Cannabis Conference and Expo. Get your tickets here.