This week, Colin Ferrian, co-founder and analyst at MJResearchCo, discusses why, as an investment analyst, he is working to generate more empathy for the cannabis industry.
Empathy in the cannabis industry is rare, especially among the investment community. According to Ferrian, the industry has two types of people: those with money — investment capital — and those with experience. Ferrian works as a hybrid that can steer capital investment in the right direction while understanding of how systems and other capital projects should be run in the cannabis industry.
With a background that includes work as both an investment analyst and in cannabis operations roles, Ferrian is uniquely suited to help investors predict the sustainability of larger companies and gain a better understanding of what's under than hood, rather than just gleaming information off filings and press releases.
Ferrian founded MJResearchCO to provide institutional analysis for cap allocators in the investment industry. Typically, these are smaller, family offices and institutional funds that want to put money to work in the cannabis industry.
Ferrian was drawn to the industry because he saw it as the secular growth industry for his generation. Secular growth happens when something fundamentally changes within an industry to create a wave of new demand. Ferrian says cannabis is a "generational opportunity" with demand proven by the illicit market for centuries. Last year's market conditions also proved that cannabis is recession-resistant.
Ferrian founded MJResearchCo about seven months ago, and he offers deep quantatative research paired with detailed operational evaluationfor those looking to invest millions of dollars in the industry. To paint a full picture of operators in hyper-growth mode, he looks at everything from unit economics to turnover and organizational structure.
Cannabis investment remains a relatively small market with a need for deeper research into the industry. However, the market will grow with the de-scheduling of cannabis.
Cannabis businesses require an extensive amount of capital. Since there are less institutional folks in the industry, it makes it difficult to find the right dance partner — investor — with similar goals. Ferrian hopes to accomplish just that.
