May 21 2021,


(Photo by Spencer Platt/Getty Images)

An analysis by Mitch Baruchowitz, managing partner at investment firm Merida Capital, argues Wall Street analysts drastically underestimate cannabis's total addressable market (TAM). He predicts the industry will have a $1T global economic impact by 2027.

Baruchowitz acknowledges this would be pretty remarkable for such a new industry, but here's his case:

"We can start by looking at the innumerable industrial applications of the hemp plant. We can also take a swing at predicting hemp-based CBD sales as nutraceutical, or medical formulations over the next 10 years.  We can reference the amount of total predicted cannabis sales for adult-use in 2027.  We can extrapolate ancillary spending from current levels and get a sense of what that will look like in 2027. We can also glance at the current state of medical markets and project what those look like in 2027.  We can then take a reasonable guess at what type of ancillary activity would have to occur to support the plants’ cultivation, manufacturing, productization and shipping...

"The conclusion we reached is that even the most intelligent and professional analysts are likely underestimating the full impact of cannabis/CBD over time by orders of magnitude and are failing to account accurately for how fast the global industry is evolving."

That's right, $1 TRILLION.

Not to be outdone, Bengal Capital calls the war on drugs a "lost $5.3T U.S. sovereign wealth fund."


Matt McGinn, talked to Business Insider about Spacestation the California white-label manufacturer of infused beverages. A co-founder of the company, McGinn argues drinks are the toughest cannabis subsector for operators:

"McGinn said that most bottling options on the market degrade cannabis potency, as the bottle eats into the beverage's cannabinoid content. Glass is the only container that won't eat the compounds. "If you see anything in plastic, it's suspect," he added — aluminum cans, meanwhile, can see degradation between 8% and 98%. 

"To find a solution, McGinn's team worked with custom emulsions system Vertosa to create can liners to cut down on degradation at the manufacturing level." 

Read the whole thing.

  • Spacestation holds a controlling share in Fly Beverage Co. which sells drinks by the 24 pack.
  • But McGinn's worried about potency caps, which have been proposed in several states.
  • I previously spoke to Novel Beverage Co. which is doing something similar in Maine.
    MJBrand Insights
  • Meanwhile, hot brand Cann, which Spacestation manufactures in California, released a line of non-infused beverages called Cann Unspiked.

Quick Hits

  1. Columbia Care CEO Nicholas Vita discussed how he quietly built a national footprint.
    Business Insider
  2. In another high-profile executive interview, Curaleaf chairman Boris Jordan discussed how "science and economics" will overcome prohibition in Europe.
    Business Cann
IN THE NEWS — 5/22/21

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