I recently attended a meeting of business owners and scientists who are interested in the imminent legalisation of cannabis here in New Zealand.
In my mind, I felt like I was walking into a secret gathering of rebels planning their revolution. George Washington and Ben Franklin would bust through the doors at any point, unholstering their pistols and spreading out schematics of the local red-coat watering hole.
But, alas, there were no pistols or schematics present…nor were there any joints or bongs…or dreadlocks or ratty hoodies.
Instead, I found a circle of bright-eyed forward-thinkers who wanted to play a part in the birth of a new industry here in New Zealand.
Many of them owned businesses — successful business — some of which you would recognise.
Others were software developers and genetic scientists who discussed the technical issues that could arise after the referendum…
And trust me…there’s a lot to think about.
For one, there’s the issue of innovation protections. As people are figuring out new and clever ways to establish themselves in a growing market, they’re going to have great ideas and inventions.
For example, software to control CO2 levels…new genetically-engineered strains of the plant…chemical testing tools…nutrient compounds…etc.
All of that stuff will be created as part of this new wave of businesses…and the inventors will want their creations protected.
But as it stands, there’s very little official structure for these inventors to rely on…
They’re basically rogues acting outside of established regulation.
Eventually the state will get something out, but it’s going to be very late in the game, after the referendum. Much of the creation is happening now.
So folks like those at the meeting have to sort out their own framework by themselves (a joint effort, if you will).
Self-regulated progress…for now.
There was also a lot of talk about the science of cannabis.
It was mostly over my head…and it brought me back to every single winery I’ve ever visited with my wife.
You see, she’s a real wine connoisseur. She’s been to dozens and dozens of wineries here in the North Island, a whole bunch down in the Marlborough area (on our way to the food and wine festival, of course), and heaps more on both the East and West Coast of the States.
And while I’ve joined her for most…I’ve never picked up a single bit of the tasting science.
I’ll swirl it around…maybe sniff it if I’m feeling posh…then claim it has notes of concrete and old cucumbers. I have no idea what I’m doing…
But my wife will go on and on about hints of apple or a touch of plum. How it has a full body. Strong tannins…whatever that is.
That’s kind of how the scientists and geneticists at this meeting talked about strains of cannabis. Terpenes and trichomes…calyxes and diploids.
They described a wide range of scientific characteristics for the plant, many of which will become part of the categorisation system in the future (similar to what we have the in US.)
And on that note, one thing became very clear to me — regardless of the degree of legalisation in 2020, the days of ‘tinnies’ and ‘hundy bags’ are almost over. Before long, cannabis will exclusively be sold in pharmaceutical-grade bottles and covered with the various data identifying the product inside.
Because it will no longer be the product of dreadlocked, ratty, hoodied basement dwellers. Soon this product will be farmed by robotic arms and scientists in clean white hazmat suits.
And I quickly became aware that everyone else at this meeting already knew that…
They were scientists and professionals who intended on treating cannabis like any other regulated product.
To me, that was reassuring for the future of this industry.
Because the absolute worst thing for cannabis legalisation would be to make the industry an extension of the underground scene. Unreliable products. Unlicensed growers. Inefficient cultivation methods. No data. No trackability.
Instead, it needs to be completely new. Built from the ground up.
And that’s exactly what’s happening as we speak…
The last gem that I got from that meeting was a big one — that the wheels are already spinning on this thing…and that progress is already being made…and that anyone who waits until the referendum to get started will be too late to the show.
That’s important from an investment perspective.
In general, you’re looking for leaders, not laggards, right? Innovators, not copycats…
And throughout history, it’s been early investments in leaders that have returned mega-gains.
If you’re eyeing the cannabis sector now, in lieu of the impending legalisation next year, you’re already a step ahead of everyone else. You already appreciate the potential that could flood the country in the near future…and you understand that many people could get very wealthy from it.
I’d encourage you to focus your hunt to the companies already preparing for what’s to come.
They’ll enjoy the early mover advantage when the wall comes down.
Editor, Money Morning New Zealand
PS: Wondering which companies are already arming up? Check out my findings here.