By Charles Roques
When I was a student one of the popular names for people who smoked pot was a “head.” It may still be, along with many others. Its connection is obvious since cannabis users experience many of the sensations inside their heads. Those same heads were often wary and suspicious of the corporate business world and openly rejected those values and the culture. It still may be difficult for some to imagine the world of cannabis and love merging with capitalism and lucre.
If you’re an investor on the OTC markets, don’t expect the cannabis sector to be different because bleak realities still exist. Cannabis utopia might exist in your head, but the dystopian reality of wheeling and dealing will bring you back down to earth. This is not totally the fault of the entrepreneurs because the current environment can create harsh conditions for survival. New investors will have to accustom themselves to this battleground while trying to learn the ropes of investing in this sector as cannabis moves toward legalization. They should also learn to differentiate figureheads, talking heads, heads with visions and rolling ones.
In the future, these early days of the cannabis sector might be remembered as the heady days of the industry for multiple reasons. We tend to accept the CEO as the brains or visionary of the company, but some CEOs may only be figureheads, with the real leaders in the background. Did the CEO come out of nowhere or build the company? Is there a vision there or just a dollar sign?
Vague or inexact statements representing the company’s progress could betray a lack of substance in the leadership when company-owned entities publish questionable statements, e.g., “None of these products are in development just yet, but having a relationship with a major legal grow is a great wild card asset for a company operating in the hemp and CBD space to have,” as well as “drastically diversifying their portfolio with a slew of successful products.”
Videos abound with CEO talking heads, some with valuable guidance about the companies and their products but others are just silly promos and promises. There are even foreheads. One CEO displayed his for five minutes on his computer cam, purportedly as evidence of facial recognition software. His head has since rolled.
But you don’t need to subjugate your vision to the dollar. When evaluating CEOs, consider what they bring to the company. Research their background. It is great for a CEO to have innovative ideas and a vision for the future of the company.
The company can also have strange bedfellows and partners. Because of these mismatches the sector also has rolling heads. The last few weeks has seen relationships severed and CEOs terminated like the one above.
Serious research is ongoing in cannabis but serious players are also intent on cashing in as well. Their time frames could be very different. Perhaps the background of some partners were hints of the impatience to come. The founding investors of recently imploded CannLabs (OTC Pink: CANL) were first incorporated for the purpose of designing and modifying motorsport race cars for its own use, providing race consulting services.
Two heads are not better than one if they belong to the same person. What may appear to be several companies in fact may be under one CEO. If companies establish alliances or partnerships, check out the other companies to see if the same people are running them. These can be more like several departments of the same company, shuffling money instead of genuine expansion, basically robbing Peter to pay Paul. In a worst-case scenario one company can sell convertible shares to the other as if to an outside investor, but the owner is really selling to himself.
Learn about the companies you are interested in. Follow them before investing. A true vision with strong financial support is better than just another head trip.