The Greatest Story Never Told

By Todd Harrison |
January 15, 2018


I’ve been writing online since the turn of the century. It wasn’t a conscious decision at first but those who know the story will tell you it stuck. I wrote about the financial markets in real time before there was Twitter or blogs, for that matter. I enjoyed it; but all day, every day wore on me after fifteen years, as I suppose it would anyone.

I wasn’t planning a return to writing—or managing money, for that matter—but life is funny that way. I had been looking at investment opportunities in the cannabis space since 2010 because additional tax revenue, more jobs, lower crime rates and less-crowded prisons made intuitive sense to me. I had failed to anticipate how powerful the drug lobby was and the death-grip they had on lawmakers.

That’s all changed now. It’s an election year and the only thing politicians like more than policy money is getting re-elected. The people have spoken on multiple state levels and across congressional districts. According to recent polls, 91% of Americans support medical marijuana and 64% favor adult recreational use. Everyone knew Jeff Sessions had one card to turn and when it flipped, it galvanized the movement and, we think, expedited clarity.

My partners and I have been sharing our wellness thesis for a year now and we’ve had some odd encounters. We’ve been in meetings with medical doctors who laughed at us, biotech CEOs who thought we were ‘off’, biotech analysts who “simply don’t see it”, and sell-side pharma analysts who proclaimed, “We would know and there’s nothing there.”

We don’t view cannabis as a party drug and we understand we’re in the significant minority. I would estimate that 99% of the American population views cannabis as a vice, while very few have direct experience with its medical benefits, or the endocannabinoid system (ECS) as a whole. For the better part of the last century, it has been taboo when the life sciences should have embraced it.

I was at a Wall Street dinner last week and listened as the cannabis industry growth was calculated as a percentage of discretionary spend; even as a portion of the beer spend. We believe this is a healthcare story and a disruptive one at that; and we expect an efficacy-led secular bull market for the cannabinoid wellness space.

The rest of the world seemingly sees it too. Israel has been conducting scientific research for more than 50 years and is light years ahead of the pack, while Canada and Australia both recently set their sights on, and I quote, “global domination of the medicinal cannabis market.”

Why is the world so excited? The same reason we are; we believe that if we follow the science, it will lead to a bevy of medical breakthroughs that will ease suffering and save lives. Epilepsy should be the first indication to see FDA-approved medicine derived from the cannabis plant, and cancer, autism, Alzheimer’s, dementia, and others could follow.

There are more than 80 pre-clinical and clinical trials currently underway despite the regulatory ban on testing the cannabis plant. Epidiolex, the GW Pharmaceuticals treatment that has been shown to be effective in reducing epileptic seizures in children by 40-50%, should pass FDA review this summer. Other indications are on its heels; a fact that is somehow being ignored by Wall Street analysts.

The investment cycle has already begun, as evidenced by the parabolic price action across the spectrum of Canadian licensed producers. That’s phase one, in our view. The biopharmaceutical universe, where a handful of companies are doing exceptional work, is up next—and that should really tweak conventional wisdom. And as more supply comes online, and prices continue to decline, those on the ‘output’ side—cosmetics, consumer goods, nutraceutical products—should benefit in phase three.

We’re not here to sell you anything and we’re not here to give advice, we’re here to inform and educate! It’s become exceedingly clear through our interactions and conversations that most people don’t understand the potential efficacy profile and that they’ve been programmed to believe that cannabis is bad for you.

This is frontier science and we’re quite sure that by the time this becomes conventional wisdom, the stock market will have already priced it in.


Todd Harrison
Founding Partner and Chief Investment Officer

CB1 Capital holds GWPH. The mention of specific securities on this website is not a recommendation to buy or sell such securities. There is no guarantee that any of the securities mentioned on this website have been, currently are, or in the future will be, owned by CB1 Capital Management in its clients’ accounts nor that any of such securities have been, or will be, profitable.

2018-02-24T01:23:36+00:00