Billionaires and Cannabis
The first privately-established equity firm exclusively focused on the marijuana industry has produced three new billionaires.
Christian Groh, Michael Blue, and Brendan Kennedy founded Privateer Holdings Incorporated; a Seattle-based company launched in May 2010.
These three names are now synonymous with billionaires and cannabis discussions.
This trio-founded firm invested into Canadian marijuana firm Tilray Incorporated, who last year had a $21 billion dollar evaluation thanks to a 1,200%+ stock surge. Tilray is one of the country’s largest producers of premium- and medical-grade cannabis.
It’s safe to say, that for some investors in the cannabis space, marijuana is paying off.
Surges in pot-stock prices have turned millionaire investors into billionaire executives. Many refer to our times as the cannabis-stock boom, others label modern-day ages as the green rush.
Both are accurate descriptors considering that 2018 marijuana sales grew by $10.9 billion compared to 2014, and is expected to quintuple (5x) by 2025.
The most extreme pot-stock boom example is Tilray Incorporated, their shares soared 13-fold within just a few months of its IPO (initial public offering) in July 2018.
These marijuana visionaries are now worth billions, at least on paper anyway. Given the degree of volatility in the cannabis-stock sector, these fortunes may diminish with hype or grow with reform.
As you’re likely aware, marijuana quickly evolved into a huge, money-making industry.
According to reports from BDS Analytics and Arcview Market Research, global cannabis sales in 2018 amounted to nearly $11 billion. That is triple the global-made sales just four years prior. Many market forecasters and investors believe this unprecedented growth to be only the tip of the iceberg.
While global sales climb, there’s only one market leading the pack that’s responsible for producing the billionaires we’ve seen; the United States.
U.S. federal agencies remain steadfast on their position of cannabis being a Schedule 1 substance.
However, they have taken a hands-off approach when it comes to state-regulated marijuana laws.
This has allowed 33 states to legalize medical marijuana and eleven for both recreational and medical use.
Recent Pot-Stock Acquisition by Hedge-Fund Billionaire
Arguably speaking, Aurora Cannabis is the hottest pot stock currently on the market and has attracted billionaire investor interests.
Analysts say Aurora Cannabis is drawing interest from millennial investors wanting in on the pot-stock boom, and this includes billionaire-status visionaries.
Filings from the Securities & Exchange Commission (SEC) have shown Renaissance Technologies and Citadel Advisors to be two firms that have secured stock in Aurora Cannabis during 2019s first quarter. It’s worth noting that both of these firms are managed and by two multi-billionaires.
Ken Griffin, CEO of Citadel Advisors, has a reported net worth of nearly $12 billion. Likewise, James Simon, owner of Renaissance Technologies, has an accumulated wealth of over $21 billion.
This has lead others to wonder if they too should purchase shares in Aurora Cannabis. After all, if successful billionaires are putting hard-earned dollars on the line, it must be a worthwhile, high-return investment worthy of associated risks.
Large Bets on Cannabis by Billionaires
Ken Griffin of Citadel Advisors acquired over $11 million dollars worth of Aurora Cannabis stock during the first quarter of 2019. Adding to the investment, Griffin also executed a purchase for 1.4 million shares of call options, in addition, to put options for just a tad over a million shares.
Compared to the previous quarter, Citadel multiplied their investment significantly. Many investors reference to such purchases when making arguments for the future growth of the cannabis industry, stating that renowned investors making these acquisitions signifies security for future investors.
Furthermore, Renaissance Technologies acquired over $7 million in Aurora stock. At present, Aurora is the only marijuana stock in the firm’s investment portfolio, although, they do shares in Constellation Brands which owns 38% of Canopy Growth (a cannabis cultivator).
Billionaires are investing in cannabis, should I too?
Keep in mind; it’s not the smartest of ideas to invest in a stock simply because another investor is. Ideally, you will invest in stocks for markets and company’s you’re familiar with.
On the contrary, it’s not counterintuitive to review the stocks other big-time investors are making. They perhaps may be purchasing stocks you haven’t heard of in markets you’re passionate about, and this is a good way to find out.
Although, the investments made by Renaissance Technologies and Citadel Advisors may not be as temperamental as yours; they were aggressive in their acquisition. For safe-sided, preserved investors, Aurora stocks are not the best pot stock to purchase.
But, for those that enjoy the greater the risk, the great the reward approach, there are a few things you’ll appreciate about Aurora Cannabis. For one, global cannabis markets are growing considerably. Second, they are expected to continue growing for years to come.
In the end, Aurora is one of the top leaders in the cannabis market, and if a billionaire wants to invest in the industry, Aurora will likely be an investment contender.
Make no mistake, between the cannabis boom we’ve already seen, and the tell-all signs given by billionaire investments within the space, there is exponential growth on the horizon. Paragraph
After all, marijuana legalization is sweeping over the United States. Washington D.C. and ten other states have legalized recreational cannabis in the past few years alone, and in October 2018, Canada legalized medical and recreational marijuana as well.
These Canadian-based companies are capturing the attention of entrepreneurs and billionaires alike. Considering the already-seen explosive growth and rising consumer sales, cannabis may just be a safe bet after all.