Q&A With Investment Banker Leslie Bocskor on Industry Trends, Cannabis Investing & Banking

By John Schroyer

When Leslie Bocskor speaks, people in the cannabis industry listen.

That’s because he has a well-known track record of success as an investment banker that dates back almost 20 years. And now, he’s playing dual roles as managing partner at the Las Vegas-based investment banking firm Electrum Partners and as chairman of the Nevada Cannabis Industry Association.

Marijuana Business Daily recently reached out to Bocskor – who will speak at the upcoming Marijuana Business Conference and Expo in Las Vegas this November – to get his thoughts on investing in cannabis companies and the marijuana industry in general.

What kind of trends are you seeing these days in the cannabis industry?

You’ll see personal products – vaporizers and other things – that will evolve as an industry in and of itself. Software solutions for cultivation, software solutions for security, software solutions for compliance – these are all going to be companies that are going to be springing up.

So the overall cannabis industry is going to end up being segmented much more broadly with much more specificity (than it is now).

What should potential investors be on the lookout for in cannabis-related companies?

Your primary focal point as an individual investor going to the cannabis industry should be your due diligence. That’s true of any industry, but it’s more true in an industry that has as much of a tailwind as this does, because it will pull out the bad actors.

So people who are just looking to get involved because they see how much money there is, they’re involved in the green rush.

For example, the (Securities and Exchange Comission) recently gave some warnings, saying, “Beware of investing in publicly traded cannabis companies.” They were saying it because there had been some bad actors who had taken advantage of the demand and the opportunity that the legal cannabis industry was providing, and had been using methods as regards to the trading of public stocks that were not looked at as completely within the guidelines that the SEC had set out.

So make sure that the team you’re investing in is what you’d invest in regardless of what business they’d be in.

How do you think the lack of banking services has affected the industry?

It has created additional risk and it has created additional opportunity. You have to deal with paying the IRS, you have to deal with paying local taxes, you have to deal with separating your cash from your bank account, and have the bank account doing business with a business that doesn’t have anything to do with cannabis directly.

As soon as the bank finds out that you have anything to do with cannabis, they might close the bank account. That presents the challenge, but it’s created tremendous opportunity.

First Security Bank of Nevada has probably gotten more press than it’s gotten in its entire history because the CEO got on (National Public Radio) and said publicly, “We will be doing business with legal cannabis businesses in the state of Nevada, period. If you’re in the industry, come to us. Our doors are open.” And they’re the only bank to do that in the country.

The other opportunity it’s created is it’s started a conversation about setting up cannabis-specific banks. I guarantee it’s a matter of time until we see banks opening up that are specifically there to do business with cannabis businesses.

You spoke in August about the need for the marijuana industry to self-regulate. Can you tell me more about that and why you think it should be a priority for industry leaders?

It may not be a priority. It may be the priority. And the reason for that is the cannabis industry is in its early stages.

Just like alcohol as an industry was reborn after the drop of Prohibition, one of the first things that the major operators of alcohol did after the end of Prohibition in 1933 is they all got together and created self-regulatory bodies by 1934.

The importance of that is if you self-regulate, you’re keeping the regulators and the government officials out of your industry, and they’re not industry experts, so they’re not going to be good at regulating you.

The best people to regulate an industry are the experts on an industry, and those experts come from within the industry.

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 4 Comments

  1. winston September 22, 2014
  2. Andrew September 23, 2014
  3. Steve September 23, 2014
  4. steve December 12, 2014

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