[vc_row][vc_column width=”1\/4″ offset=”vc_hidden-xs”][vc_widget_sidebar sidebar_id=”sidebar-main”][\/vc_column][vc_column width=”3\/4″][vc_column_text]<\/p>\n
Has this ever happened to you? You think of what you would describe as a clever term or phrase only to take to the internet and find out you were beat to the punch (and by more than a day or two).\u00a0 Recently, I was looking through a long list of marijuana related stocks and it soon became clear that there were just a couple of established businesses scattered among acres of unproven, speculative companies that were more akin to a lottery ticket. Light bulb! I began to wonder which of these will be among the first to become a \u201cgreen chip\u201d stock. \u00a0Google results sadly returned the fact that \u201cgreen chip\u201d was used here and there for environmentally friendly stocks when they surged in popularity a decade ago. But given how nearly every corporation claims to be in the business of sustaining our environment in some way or the other, I would argue the green chip term should be reserved for those that ultimately gain establishment status as among the cannabis stocks. Plus, I think it\u2019s more amusing to apply to Mary Jane stocks anyhow – so move over First Solar.<\/span><\/p>\n The term blue chip stock has some latitude in its meaning, but generally refers to large, financially sound companies that pay steady dividends. With 19 states having legalized medical use and another 8 for legal recreational use, investor attention has been on the rise (at least anecdotally in my case). Many are eager to strike green gold by identifying one of these future green chips and investing in them now.\u00a0 I can\u2019t call this crazy thinking at all since it\u2019s only a matter of time for the great plains and southern states to catch up to the rest of the country.<\/span><\/p>\n Before a couple more thoughts on the investment aspect, I am curious about how the industry will fit within the notion of \u201csocially responsible investing\u201d or SRI.\u00a0 Maybe it\u2019s just in these southern and plains states that are dragging their feet on cannabis liberalization, but there will be undoubtedly investors who would prefer not to profit from marijuana.\u00a0 SRI has been one of the most difficult aspects to investing I\u2019ve encountered. Even with geographically clustered clients, you don\u2019t always find ubiquitous ideals or for how those ideals should be reflected in their investments. Furthermore, even if there were ubiquity, a fiduciary\u2019s responsibility is with all clients\u2019 money so how can one let the ideal of client A, B & C impact D\u2019s portfolio?<\/span><\/p>\n To make it even harder (for me anyhow), it\u2019s difficult enough finding the commonality within an issue, let alone having it boiled down to the exact common factors to be considered for an SRI portfolio. Here\u2019s an offbeat example that hopefully highlights the difficulty.<\/span><\/p>\n Company A: Peddles annuities onto unsuspecting school teachers, in turn smothering them unknowingly with 3-4% vehicles. Not stopping there, they then strand them to make their own investment selections.<\/span><\/p>\n Company B: Manufactures plant-based therapies to aid those with cancer from their pain and chemo nausea. That plant just happens to be socially taboo.<\/span><\/p>\n One is a financial cancer and the other one is fighting real cancer. One recently had it easier to do business in the U.S. and the other is still battled by half the country. Clearly some personal bias shines through this slant \u2013 but its particular striking to me because I could find company A in just about any investor portfolio, even if they have a \u201csocially responsible\u201d slant. Rarely, if ever, would you financial stocks in an SRI screen yet I would suspect you would find some resistance somewhere to benefiting from cannabis.<\/span><\/p>\n SRI is clearly on the rise but is well beyond my scope and I have more questions than answers. I do fully understand and respect those that wish to have their dollars invested in a way that aligns with their values.\u00a0 It\u2019s simply not in my personal jurisdiction \u2013 other than one last suggestion. Academic research has shown that SRI can lead to positive results, but in two ways. The first: Companies that \u201cdo good\u201d tend to \u201cdo well\u201d. The second: companies shunned as taboo also tends to do well (just take a quick look at cigarette stocks).\u00a0\u00a0 That goes right along with sage advice from one of my investing idols, Howard Marks, to \u201cconcentrate on the unloved, less-followed and therefore less-efficient sectors\u201d. If, for some reason, investors drag their feet to get on board \u2013 marijuana very well could be an area worthy of more focus. I\u2019m not saying this is the case right now but is certainly a possibility going forward.<\/span><\/p>\n Assuming the socially responsible bridge has been crossed, marijuana investments on the other side of that bridge range across many industries such as real estate, growing technologies, farms and of course health care. Health care seems like the obvious path for the first green chip, but we shall see. Please make special note that none of this is a recommendation to put money in that area. FEG\u2019s specialty centers on risk management in the pursuit of balancing risk, return and taxes. That isn\u2019t conducive to putting client dollars towards unproven, speculative plays. But, I would certainly encourage you to not dismiss it as the area isn\u2019t one that should be written off either. It does seem to me at least that there is a rather large disconnect between the fact that we are more than halfway home towards nationwide legality but still in the very early stages of investor interest. Those two will reconcile over time and some will be rewarded with healthy profits on their early investment. If you do somehow find motivation to go fishing for green chips yourself \u2013 do use caution and do not buy a stock just because it is in a certain business. A good company does not always make a good stock.\u00a0 But best of luck for turning your greenbacks into green chips.<\/span><\/p>\n Disclaimer: Do not construe anything written in this post or this blog in its entirety as a recommendation, research, or an offer to buy or sell any securities. Everything in this post is meant for educational and entertainment purposes only. I or my affiliates may hold positions in securities mentioned in the blog. Please see my Disclosure page for full disclaimer.<\/em>[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column offset=”vc_hidden-lg vc_hidden-md vc_hidden-sm”][vc_widget_sidebar sidebar_id=”sidebar-main”][\/vc_column][\/vc_row]<\/p>\n","protected":false},"excerpt":{"rendered":" [vc_row][vc_column width=”1\/4″ offset=”vc_hidden-xs”][vc_widget_sidebar sidebar_id=”sidebar-main”][\/vc_column][vc_column width=”3\/4″][vc_column_text] Has this ever happened to you? You think of what you would describe as a clever term or phrase only to take to the internet and find out you were beat to the punch (and by more than a day or two).\u00a0 Recently, I was looking through a long list […]<\/p>\n","protected":false},"author":6,"featured_media":2309,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","footnotes":""},"categories":[46],"tags":[],"acf":[],"yoast_head":"\n