Cannabis. A highly controversial product trying to break out of its taboo and become a large-scale consumer good. This year might see a turn-around. On account of several countries passing or having passed initiatives to legalize the production of marijuana for medicinal and recreational use, the cannabis industry is diverse, disruptive and rapidly growing. Thus, new companies within the cannabis trade are appearing out of thin air.
The craze encompasses everything from start-ups buying supply stocks from large marijuana farms and importing the extracts into their target market for medicinal use, to scientists developing ways to recreate the extracts without having to grow and harvest the plant. Not only are start-ups and healthcare firms getting involved, but also food and beverage consumer giants want a piece, and even IT firms such as Nielsen are jumping on board. According to data from the Bank of Montreal (BMO), cannabis could evolve into a $200 billion industry over the next seven years. The cannabis industry is rapidly developing in terms of array of products and pricing, hence investors who are looking for their next investment opportunity shouldn’t wait for a green light for too much longer.
A wide variety of edible cannabis is sold every day, which accounts for a fair share of consumer spending, however, extracts for inhalation are becoming the larger market segment. Even though the marijuana industry has been highly competitive at the processing level and less so at the retail level, 2019 could reverse this trend. Considering the possible upcoming legalization in many countries of cannabis for medical use, this will likely imply a giant boom in its market share, at both levels.
With Canada federally legalizing marijuana in October 2018, the country pioneers the cannabis universe. The Royal Bank of Canada (RBC) announced at end of last year that it will be conducting large scale research within this field and its investment banking unit will take the lead on over-viewing and advising cannabis firms on takeovers and stock sales. Other banks, such as BMO, are joining the competition for a slice of this promising industry. The fact that first-tier investment banks are entering in this industry is a sign that they are getting comfortable with the cannabis trade, according to Business Insider.
An impressive expert from our Zebra Insights network who founded his own private cannabis firm recently spoke at one of our clients’ events. His company operates on a global level and focuses on the research, licensing, cultivation and processing of cannabis. He sketched the correlation between cannabis and big data solutions, involving a different spectrum of artificial intelligence than what is known to the market today. He also shared his exclusive insights on cannabis on a governmental level, regarding the endorsement, development and market share in China, plus its competition with the US from a trade war point of view. To top it off, he involved many other industries, such as textiles, biotech and investment management, and of course the scientific, medical and health industries.
As for the opportunities in the near future, it is essential to consider all the different types of products in which cannabis can be implemented making it advantageous for its psychoactive substances and stimulants, not just for it being known as a single drug. However, there are still many concerns regarding the risks of oversupply and the side-effects of the product. One of the most important factors in all types of investments, but especially for cannabis investments, is to be well-informed and to have access to the necessary data given this is a young disruptive industry.
Chloé de Salle
Consumer Stocks vs. Technology Stocks: what's your pick?
Perceptions and predictions about consumer behaviour are constantly popular subjects of debate. Only last year we saw consumer discretionary stocks nipping at technology’s heels. More recently tech stocks have fallen due to concerns around privacy, international trade and less than expected earnings.
This drives investors’ focus to consumer staples and discretionary. Retailers such as Estee Lauder and Ralph Lauren have led the gains on the S&P 500 with a 12% and 9% rise respectively while Alphabet was down 0.4% (Feb 2019), and very recently LVMH has hit record sales and earnings on Asian markets.
Given the dynamics of this market, our client invited the APAC head of commercial strategy from a leading cosmetics firm to speak. Our expert, with a wealth of experience in this field, shared his sharp views on global trends and China trends, and particularly on APAC’s competitive growth strategy.
Thereafter our client opened a frank discussion with our expert, leading to insights on:
The advancement from brick & mortar model to e-commerce to new retail
New marketing and the influence of KOLs on big brands in China
Alibaba's Luxury Pavilion club
The impact on sales through platforms such as Taobao and Tmall
The growth of splurging millennials in China
What is your point of view on the balance between technology and consumer? Or could you use some clearer insights about these robust sectors?
Chloé de Salle
An Expert Insight in the Global GPU Investment Landscape
With Chinese New Year upon us, we would like to nurture you with some food for thought to kick off the Year of the Pig. There have been recent developments in the GPU market and therefore we connected one of our investment banking clients with a Zebra Insights’ expert on GPU. Our client was excited to host the Director of Engineering from a leading artificial intelligence company based in California. He shared his deep expertise on computer vision with them.
Our expert covered topics ranging from comparison of neural network training to technical merits of various processors. Additionally, he shed a light on inter fencing platforms and developments in new platforms such as Graphcore, Cerebus and Nervana. To give you a grasp of the depth of expertise of our trusted expert, here are the key takeaways from the engagement.
Our client inquired about the following questions, which our expert was happy to answer and share his perspective on:
Can a particular platform sustain a lead or emerge as a new competitor?
What stage are the processors of the new platforms like Graphcore, Cerebus, Nervana and their required elements of success?
How often are engineers punching through the frameworks to the native language or libraries like CUDA/cuDNN?
Besides answering those questions, our expert was also able to give insights on the following topics:
Hardware comparisons: Nvidia GPUs vs Google TPUs vs FPGAs
Programmability/functionality and efficiency of various processors Google TPU vs Nvidia GPU vs AMD GPUs vs FPGAs
Tensorflow vs Caffe vs other deep learning frameworks
AWS vs Google Cloud vs Microsoft Azure: their positions with different types of users
As a result, our client obtained the insights they were seeking and acquired a perspective they had not explored previously. As such they determined what area of GPU they want to invest in to bring about a prosperous Year of the Pig. Have you figured out what your investment focus will be for the coming year?