A commercial real estate investment can provide many benefits including income, capital gains, favorable tax treatment, portfolio diversification, and inflation protection. Most of these benefits are fairly straightforward, but the last one—a hedge against inflation—is commonly misunderstood and often overlooked. In order to understand what it is and why it can be powerful, it is first important to understand the concept of inflation itself.

First, What is Inflation?

Inflation is the general rise in the price of goods and services over time, resulting in a sustained drop in the purchasing power of money. In other words, a dollar today is worth more than a dollar in the future due to its loss of purchasing power.  

With any type of investment, inflation is an important concept because returns need to be measured both in absolute terms and in relative terms. For example, an individual could allocate money to an investment that pays an interest rate of 3% annually (the absolute return), but if inflation causes consumer prices to rise by 3% in that same year, the relative return on the investment is 0% because the purchasing power of that capital remains unchanged. In that way, it is important for an investment to earn a return, but it is more important that the return outpaces inflation to ensure that purchasing power increases over time.

While inflation can seem scary, many experts and economists actually consider a small amount of it to be a sign of a healthy economy. This is because it encourages consumers to spend money today rather than save it and watch its purchasing power erode over time. In fact, the United States Federal Reserve (as well as other central banks around the world) monitors inflation closely using the “Consumer Price Index” or “CPI” to ensure that it stays within a desired range of 2% – 3% annually. If the economy heats up with prices rising too quickly, the Fed will raise interest rates to slow it down. Conversely, if economic growth is contracting, the Fed will  decrease interest rates to encourage economic activity.

Given the known effects of inflation, it is only natural for investors to ask which asset classes or investment types perform well in an inflationary environment. In other words, which investments can best serve as an inflation hedge?

Continue reading at First National Realty Partners

States across the country now consider pot shops “essential” services and anxious Americans are flocking to them.

Cannabis is turning out to be the one thing the coronavirus can’t destroy.

Marijuana sales are booming, with some states seeing 20 percent spikes in sales as anxious Americans prepare to be hunkered down in their homes potentially for months. Weed sellers are staffing up too, hiring laid-off workers from other industries to meet demand. And in the midst of a historic market meltdown, stock prices for cannabis companies have surged, in some cases doubling since the public health crisis began.

“We are hiring because we are having to shift our business a bit,” said Kim Rivers, CEO of Trulieve, which is valued at $1 billion. The company is staffing up its delivery fleet, retail workers, and people to handle increased inventory shipments. “Now is a great time [to apply], particularly if you’re in a business that has seen layoffs.”

Nearly all of the 33 states with legal medical or recreational markets have classified marijuana businesses as an essential service, allowing them to remain open even as vast swaths of the retail economy are shuttered. San Francisco and Denver initially announced plans to shut down dispensaries, but immediately backpedaled after a public furor.

Weed shops are essentially being treated the same as pharmacies, reflecting a dramatic shift in cultural perceptions about the drug over the last decade.

“It is a recognition that it has taken on much greater significance around the country,” said Rep. Earl Blumenauer (D-Ore.), a longtime Capitol Hill champion for cannabis. “This is something that makes a huge difference to the lives of hundreds of thousands of people every day. I do think that this might be part of a turning point.“

Continue Reading at Politico.com

(Bloomberg) — Illinois per-capita recreational pot sales topped every state but one in its debut month.

The state logged $39.2 million of adult-use recreational marijuana sales in January, or $3.07 in sales per resident, according to New Frontier Data, a cannabis research company. Those are the second-highest sales per capita during the first full month of legalization among eight other states where adults can buy pot for recreational use. Nevada was the highest at $8.88 per capita in July 2017, a figure bolstered by tourism, according to Kacey Morrissey, New Frontier’s director of industry analytics.

Illinois’s performance is “typical for first month’s sales,” Beau Whitney, executive vice president and senior economist at New Frontier, said in an email. “Illinois is fairly strong out of the gate.”

On Jan. 1, Illinois became the 11th state to legalize recreational use of the drug. The fervor around the industry’s prospects has been strong especially as Illinois, which has the lowest-credit rating of all 50 states, needs revenue. With nearly 13 million residents and more than 100 million tourists a year, Illinois is expected to be the largest adult-use market in the Midwest and annual sales could reach $4 billion when the market matures, according to Cresco Labs Inc., the state’s largest cannabis operator by capacity.

Illinois “had the most successful roll out in the industry,” Boris Jordan, executive chairman of Curaleaf Holdings Inc., said in an interview. Curaleaf is the largest U.S. cannabis company and its pending purchase of Chicago-based GR Companies Inc., better known as Grassroots, is expected to close in the second quarter, giving it a foothold in the Illinois market.

Sales during the first full month of legalization in other states were impacted by a combination of factors, including a limited number of retail locations, according to spokesmen from Oregon, Washington and Michigan.

Given Vermont does not have recreational dispensaries and Maine has not officially begun adult-use cannabis sales, these two states were not included in the data, according to New Frontier’s Morrissey.

Companies are rushing to ramp up production in Illinois given demand is expected to exceed supply for at least another year, Curaleaf’s Jordan said. Products sold in Illinois must be from cultivators, growers or dispensaries in the state as marijuana is still illegal under federal law.

The first month, especially the early days, saw long lines and some shortage of flower, according to the Cannabis Business Association of Illinois. The state has deliberately tried to temper growth and manage expectations to balance social equity, criminal justice reform and revenue, said Toi Hutchinson, senior advisor for cannabis control to Governor J.B. Pritzker.

“I didn’t have a $40 million benchmark,” Hutchinson said in a telephone interview on Monday after the sales data was released. “The strong start is what we hoped for” but Hutchinson said the sales figure “is surprising to us.”

About a quarter of the state’s take will go toward community reinvestment partly to reverse some of the challenges from past drug policy, according to Hutchinson. Collections may also help chip away at Illinois’s $6.2 billion of unpaid bills and $137 billion of pension debt. Tax collections on legal pot are forecast to jump from $34 million in 2020 to $375.5 million in 2024, according to the Illinois Department of Revenue.

Revenue from the industry is hard to predict. First month sales aren’t necessarily indicators of the future, according to Alexandria Zhang, research officer for The Pew Charitable Trusts.

Some evidence also indicates growth and revenue collections “tend to slow as markets mature” even after strong initial performance, Zhang said in an interview. “Early revenue collections don’t mean the strong growth will continue in the long run.”

Illinois’s Pritzker will unveil his 2021 budget on Feb. 19 and the role marijuana tax collections will play remains to be seen. During his “State of the State” speech last week, he mentioned legalization as “a chance to collect tax revenue from the residents of Wisconsin, Missouri, Iowa and Indiana,” where recreational cannabis is illegal. He also highlighted the criminal justice reform that his administration also enacted, including 11,017 pardons for people with low-level cannabis convictions under the state’s new cannabis law.

Extrapolating from Colorado’s legalization experience, Illinois sales will amount to $3.7 billion in five years, Cantor Fitzgerald analyst Pablo Zuanic wrote in a note published Feb. 4.

The January data “support even the most bullish projections for recreational consumption in the state of Illinois,” Zuanic said.

Utah health officials plan to award pharmacy licenses to 10 companies to dispense medical marijuana at 14 sites across the state.

The issuance of licenses in Utah is considered a milestone development for the launch of the program later this year.At least three of the licenses were awarded to multistate marijuana operators – Bloom Medicinals of Florida, Columbia Care of Illinois and Curaleaf of Massachusetts.

The sites chosen by the state health department are largely in metro Salt Lake City or elsewhere in northern Utah. However, they also include two in southern Utah and one in rural eastern Utah.

Eight sites might open as early as March while others would open by July, the department said.

Dispensaries in Utah might face licensing fees of $50,000 to almost $70,000 in a market where medical marijuana sales could reach $25 million-$35 million by 2022, according to Marijuana Business Daily projections.

– Associated Press

The legal status of marijuana in a growing number of states poses new challenges for meeting planners.

When Illinois became the 11th state to legalize the recreational use and sale of cannabis this past June, the move was seen by many as a tipping point.

“It’s a major milestone,” said one supporter, predicting that, with the Prairie State on board, this once taboo activity could go mainstream. By January 2020, when the Illinois law goes into effect, 30 percent of the U.S. population will live in a place where it’s legal for adults to possess and consume marijuana for recreational use. It’s also legal in the District of Columbia, and another 22 states permit it for medical purposes only.

Meeting planners were also watching closely. In July, just weeks after Gov. J.B. Pritzker signed the Illinois law, 400 attendees flocked to the Fairmont Chicago Millennium Park for the Arcview Investor Forum, a conference designed to bring together aspiring cannabis entrepreneurs and potential investors. Exhibitors displayed everything from CBD “topicals” to cannabis-infused drinks, but no one was there to get high — unless you count the high that comes with nailing a million-dollar deal.

“It’s definitely getting legitimized,” said one attendee from the National Cannabis Industry Association. And when that happens, capital flows in: This nascent industry is already said to be worth more than $10 billion.

Read More at Northstar Meetings Group

Growing industry shows no signs of slowing

The marijuana industry could soon be worth more than the GDP of 9 U.S. states

Cannabis employs five times as many Americans as coal

The median marijuana salary is 10% higher than the U.S. median salary

Investors poured $10 billion into the North American marijuana industry in 2018

A Colorado county made $35 million off the marijuana industry in 2016

Marijuana policing cost Americans $3.6 billion in the first decade of the 2000s

The U.S.marijuana market is worth $52 billion — but 87% of sales were on the black market

But legal-marijuana sales alone topped sales of Oreos and organic produce

OAKLAND, CA  – The next evolution of drinking with friends has arrived in the Golden State! Keef Brands, a leading developer, producer and distributor of cannabis-infused beverages, edibles, concentrates and more, has launched its award-winning portfolio of cannabis-infused sodas, Keef Cola, in Northern California. Keef Cola reflects a revolutionary wave of social consumption, as the quality of taste-making sodas are poised to attract savvy cannabis consumers, while the approachable flavors reminiscent of soda fountain staples also welcome the canna-curious to pop the cap and take a sip.

First introduced nearly a decade ago in Boulder, CO, Keef Cola is made with high-quality CO2 cannabis extract and pure cane sugar. Each 12-fluid ounce bottle contains 10 milligrams of THC. Five bold and refreshing flavors will be available at select dispensaries throughout Northern California for responsible adult-use. What sets the product apart is its fast-acting effects and the ability to bring people together and make social connections while enjoying infused beverages. Keef Cola will also launch in Southern California later this summer.

Read More at Cannabis Business Executive

In 2017, no one knew what CBD oil was. In 2018, folks stumbled saying “cannabidiol” (that’s CBD oil) out loud. In 2019, it’s everywhere, and everyone wants in on it.

In flavors like “cucumber mint refresh” and “watermelon renew,” a new line of CBD-infused waters and teas is hitting major grocery stores in California and Colorado on Monday, each 16-ounce bottle containing 20 milligrams, or trace amounts, of “active hemp extract.”

These beverages by the Oki company are among the first wave of large-production, mainstream products that are taking CBD out of the neighborhood head shop, dispensary or hippie health food store and into mainstream commerce.

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People who are eligible for AARP memberships, teenagers, and even pets, make up the fastest growing demographics of those who are consuming cannabidiol or CBD.

Former New York resident Cory Gleichenhaus, 42, grew tired of the harsh winters, and relocated to Florida for the warmth and palm trees. Last week, he opened a CBD American Shaman store in Delray Beach.  Not surprisingly, many of his customers are senior citizens, who, like him, became full-time snowbirds, à la “Seinfeld migration.”

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