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Alternative Market Briefing

Navy Capital sees global opportunity set in cannabis

Wednesday, November 29, 2017

Bailey McCann, Opalesque New York for New Managers:

When spirits giant Constellation Brands announced that it was taking a ten percent stake in Canopy Growth, Canada's largest marijuana stock by market cap at the end of October, investors took notice. Deal activity in cannabis was already moving at a pretty steady clip, but to see interest from a major corporate brand signaled to many that cannabis is no longer a nascent industry. John Kaden, Manager and CIO of New York-based hedge fund Navy Capital says the deal will be transformational for the cannabis companies and investors.

"The transaction shows that Canadian cannabis LPs are the dominant companies in the space," Kaden tells New Managers. "We think these companies are well positioned to be acquisition targets for tobacco, alcohol and/or pharmaceutical companies."

For Kaden, the Constellation deal was also proof of concept for Navy Capital's investment strategy. In May, the firm launched its debut fund - the Navy Capital Green Fund - which invests in the cannabis industry worldwide. "Over the next five years, we expect to see a significant number of companies go public in this industry," he says. "We expect to see a broad institutional grade market emerge and some of the risk that have defined the industry to......................

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