These five businesses reflect the changing face of marijuana

THE PROFIT: MARIJUANA MILLIONS

When California passed Prop 64 last November, effectively legalizing recreational marijuana in the state, savvy small business owners began gearing up for 2018's oncoming gold or, in this case, 'green' rush. To understand the buzz, you have to first consider the numbers: By 2026, California's marijuana market is expected to be valued at around $6 billion; will generate around $1 billion in taxes; and create over 100,000 jobs.

So it's no surprise that The Profit's Marcus Lemonis, a newbie when it comes to pot, traveled to the Golden State to educate himself about an industry projected to generate $50 billion on the national level by 2026 and spend some face time with the entrepreneurs eager to dominate this impending marijuana boom.

Below, we take a look at five burgeoning businesses hoping to make their mark on California's newly minted recreational marijuana market.

CANNDESCENT

CANNDESCENT

A Harvard MBA goes to pot  

Founder: Adrian Sedlin

Adrian Sedlin and his company Canndescent represent the new face of legal marijuana in California. Canndescent is one of many indoor, industrial-sized pot growing operations in the works in Desert Hot Springs, California, a financially challenged community hoping to be saved by cannabis-generated tax revenue.

By mid-2019, Sedlin hopes his company will be earning between $70 and $75 million in gross revenue. He's also trying to rid marijuana of its stoner image, branding his product as the cannabis equivalent of premium wine, with corresponding prices. Canndescent is charging about $3k per pound for its product—from $1,000 to $1500 more than most competitors, hoping to appeal to Californians who might be trying pot for the first time once it becomes legal recreationally.

TREAT YOURSELF

Founders: Cindy Pinzon & Leone Posod

Cindy Pinzon and Leone Posod are best friends who run a pot edibles company, Treat Yourself. They're striving to market a new and uniquely California product: vegan, gluten-free, marijuana-infused tarts. Cindy used to be an actress and Leone was a police dispatcher – avoiding pot used to be part of her job.

Now they're both all in. They started Treat Yourself in 2015 and haven't looked back. Cindy and Leone are still working out of a tiny home kitchen and have put $15,000 into their business – everything they have – hoping to make their tarts the next big thing.

MEDMEN

Founder: Adam Bierman

With the coming legalization of recreational pot in California, many cannabis entrepreneurs typically focus on a single dimension of the marijuana world: growing it, making edibles, or getting a license to operate a dispensary. MedMen is different because it covers several bases at once. It has an investment fund, a cultivation facility, and an expanding chain of fashionable, high-tech dispensaries that look more like Apple stores than stereotypical headshops.

Out front, MedMen has patented display cases, gizmos to see and smell pot, and a whole "look" they will share with other dispensaries – for a price. The approach is aimed far beyond California – the company is positioning itself for the day recreational pot is legalized nationwide, when they want to be your go-to pot shop in every state. Behind the scenes, MedMen also grows its own weed, cutting out the middlemen where possible. While a pound costs roughly $1,000 to grow, it can eventually be sold retail for $8,000.

STASHTWIST

Founder: Andrea Unsworth

Stashtwist is a female-operated, delivery-only medicinal cannabis dispensary in the Bay Area. It's run and was founded in 2014 by Andrea Unsworth, a former financial analyst for Moody's. Most customers order products online and are able to get their cannabis within an hour. Stashtwist averages around 15 deliveries of medicinal pot, cannabis concentrates and cannabis edibles each day in and around Berkeley.

CLC BRAND LABS

Founder: Dan Osborne

Dan Osborne, a grandfather, former minister, and computer specialist, may be an unlikely marijuana mogul, but his company, CLC Brand Labs, is a rapidly expanding indoor marijuana production operation in Desert Hot Springs, California. In five years, Osborne expects his company will net $29 million a year on gross sales of $76 million.

Osborne has several deep-pocketed investors backing CLC Brand Labs and has sound reason to believe legalization will propel his company forward. He also knows it comes at a tremendous cost – Osborne says he can't see his grandkids because his disapproving son-in-law (a pharmacist) is opposed to his profession.

The Profit goes inside California’s exploding marijuana market from CNBC.

Source: https://goo.gl/9WqAYy

Nasdaq Cannabis Stocks Rally After Recreational and Medical Use Passes

Cannabis stocks listed on the Nasdaq continued to rally after voters ended prohibition and approved the recreational use of marijuana in California, Massachusetts, Maine and Nevada.

Cannabis stocks listed on the Nasdaq continued to rally on Wednesday after voters ended prohibition and approved the recreational use of marijuana in California, Massachusetts, Maine and Nevada while Arkansas, Florida and North Dakota adopted medical marijuana laws.

Arizona rejected its measure for recreational use while Montana voters approved a measure to improve access to medical marijuana providers.

"Whether they live in blue or red states, voters have spoken in an overwhelming majority that they want media and recreational marijuana," said Jason Spatafora, co-founder of Marijuanastocks.com and a Miami-based trader and investor known as @WolfofWeedST on Twitter. "One election night we witnessed not just a political shift, but a paradigm shift for cannabis where prohibition has become untenable."

Interest in cannabis-related stocks continues to increase from micro cap to Nasdaq-listed equities and will only continue its upward trend as investors should be poised for several decades of additional expansion as more states legalize either recreational or medical use and could emerge as acquisition targets.

"The legal cannabis movement scored its most significant victory yet," said Michael Berger, a former Raymond James energy analyst and founder of Technical420, a Miami-based company that conducts research on cannabis stocks. "Although the results of the election will be a turning point for the legal cannabis industry, we are only in the first inning of what will be a multi-decade growth cycle. As legalization measures continue to go into effect, market sentiment will improve for cannabis stocks and this should serve as a catalyst for many companies."

The economic impact for these states is immense - California is estimated to increase to $10 billion market by 2020, while Florida's medical market should be a $1 billion industry by 2020, he said.

"I expect the cannabis industry to be a $75 billion dollar industry by 2020," Berger said. "Although many people's estimates are below this, I take into account more than just the sale legal cannabis because the ancillary business will benefit significantly."

Several stocks have been undervalued as investors were skittish and the use of drugs produced by major cannabis-focused biopharmaceutical companies have not been widely adopted. The current options for mainstream investors in this budding sector are limited to a handful of companies listed on the Nasdaq, including GW Pharmaceuticals (GWPH) , a U.K.-based biotech company with a cannabis-based epilepsy drug; Insys Therapeutics (INSY) , a Phoenix company known for its cancer pain management drug but is developing a cannabis-based drug for the treatment of epilepsy; Cara Therapeutics (CARA) , a Shelton, Conn.-based clinical state biopharmaceutical company that develops and commercializes pain relief drugs and Zynerba Pharmaceuticals (ZYNE) , a Devon, Pa.-based company focused on developing and commercializing synthetic cannabinoid therapeutics.

Being undervalued means many of these companies such as Cara, Zynerba and GW Pharmaceuticals are also attractive acquisition targets, said Spatafora. All three companies are appealing candidates because of their intellectual property and their pipeline of current and upcoming drugs.

"The intellectual property for GW Pharmaceuticals is based on having cannabis plant-based drugs rather than synthetic alternatives and in my estimate is worth $6 billion or roughly $190 per share if bought out," he said.

Since GW Pharmaceuticals is the bellwether company of the cannabis industry and tends to benefit from positive developments in the sector, the stock could be poised for headwinds as a result from the increased market volatility.

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"We continue to view GW Pharmaceutical as the best long-term cannabis investment due to its deep pipeline of products, its successful FDA testing results, its Wall Street coverage and its valuation as its shares are trading well below the average Wall Street price target," said Berger. "We continue to view GWPH as a buy opportunity on weakness from today."

While there is less research available from analysts, some cannabis stocks listed on the OTC are also worth consideration, because they will benefit from the laws that passed in Florida, Nevada and California, Spatafora said.

Florida's adoption of medical marijuana use could be advantageous for Arcturus Growthstar Technologies (AGSTF) , which entered into a letter of intent to purchase a Florida farm that is zoned for cannabis. The state currently has six licensed producers and expansion will be needed to meet "massive demand," he said.

"They hedged on the LOI to wait and see if the law passed," Spatafora said. "The company was pretty wise in this potential acquisition because the farm already produces $2.6 million in revenue annually."

With Nevada voters approving adult use of cannabis, mCig Inc. (MCIG) , which used to specialize in lifestyle brands in the vaping and cannabinoid markets, could benefit. The company founded a construction division called Scalable Solutions geared toward the Nevada cannabis cultivation market.