This week’s Alpha Trader podcast features hosts Aaron Task and Stephen Alpher talking cannabis investing with Todd Harrison, founding partner and CIO of CB1 Capital.
“2021 will be remembered as the year [cannabis] emerged as a legitimate and powerful asset class,” wrote Harrison recently. The bull case for U.S. cannabis, he says, rests with the legalization wave - not just in the states, but at the federal level where the Blue Wave means a far more favorable regulatory environment. 
If Cannabis 1.0 was the Canadian cultivation boom (think [[APHA]], [[CGC]], [[TLRY]]), and Cannabis 2.0 is the jump in U.S. retail operations thanks to state-by-state legalization (think of the multi-state operators), then Cannabis 3.0 - cannabis as medicine - will come thanks to the Blue Wave that just hit D.C.
That friendlier national regulatory environment also likely means U.S. operators as able to list their stocks on the major exchanges, thus opening them up to institutional investment.
Late last summer, Harrison wrote about the FANGificiation of U.S. cannabis - a group of Cannabis 2.0 stocks similar to the four horsemen of the late 90s (Intel, Dell, Microsoft, Cisco) and then the more recent Facebook, Amazon, Netflix, Google. In no particular order: Curaleaf (CURLF), Green Thumb Industries (GTBIF), Trulieve (TCNNF), and Cresco (CRLBF). A big rally since means these are no longer growth names at value multiples, but Harrison remains a fan.
That doesn’t mean there aren’t other quality U.S. operators, and Harrison notes ones like Terrascend (TRSSF), Columbia Care (CCHWF), and 4Front Ventures (FFNTF). An estimated total addressable market of $85B by 2030 means there’s plenty of room for all to succeed. As for the Cannabis 1.0 names, Harrison will trade them, but he prefers to own the 2.0 players.
There’s plenty more, including why Cannabis 3.0 could mean treatment for a wide range or serious diseases and thus a market opportunity far in excess of Cannabis 2.0.
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