Drones brought down to Earth
But the financial side of the industry remains stunted. Banks typically will not lend money to marijuana sellers and investors are leery of the penny stocks tied to cannabis because of pump-and-dump scams. Still, there is a large appetite for ways to wager on the marijuana boom. Investors sent shares of Scotts Miracle-Gro up 48% in 2016 because they saw the lawn-care company as a relatively safe way to capitalise on the trend. It sells fertilisers, lighting and other supplies for hydroponics, the indoor method of growing cannabis.
The big question is whether a federal crackdown is looming.
While President Barack Obama’s administration indicated it would not interfere with stateapproved programmes, that policy may change.
President-elect Donald Trump’s pick for attorney-general, Jeff Sessions, has made it known he is no fan of marijuana. If his nomination is approved, he could enforce federal law.
No matter what happens politically, Cowen analyst Vivien Azer thinks it is impossible to ignore the industry.
She joined the firm from Citigroup, partly so she could cover cannabis. Her video announcing Cowen’s foray into the pot was the company’s most-viewed of the year. The 39-year-old wore a green checked shirt for the occasion and had her nails painted a similar shade.
LIQUOR RISKS
The rise of marijuana is affecting many large companies in the alcohol industry, making it critical to study the topic, she said.
“Even though there is not a tonne of investable assets in cannabis, per se, I do cover Molson Coors and Constellation Brands and Brown-Forman and those are names institutional investors really care about,” she said. In 2014, Google and Facebook vied to acquire Titan Aerospace, a maker of high-altitude, solarpowered drones. Google won the bidding, so Facebook purchased its own company, which was building a huge glider, Aquila. The idea was to beam internet access from the sky to get more people logging on from remote places to access information and probably use both companies’ web services. That soaring vision has come down to Earth with a bump.
On Wednesday, a spokeswoman from Google parent Alphabet’s X research lab said it had shut down Titan. This happened in early 2016, she said, although confirmation did not come until Thursday, when technology blog 9to5Google reported the move.
The team from Titan was brought into X in late 2015, and the research lab ended its exploration of high-altitude drones for internet access shortly thereafter, the X spokeswoman said.
Facebook has also struggled. Its Aquila drone crashed during a test flight in June, sparking an investigation by the National Transportation Safety Board. That was the latest hiccup in Facebook’s plans to connect the world wirelessly, following an explosion earlier in 2016 that destroyed one of its satellites and political resistance to its free services in India.
Alphabet cancelled Titan due to economic and technical challenges. Project Loon, another X project to beam internet from high-altitude balloons, is still going. So is Project Wing, an effort to use drones for deliveries, rather than internet service.
“By comparison, at this stage the economics and technical feasibility of Project Loon present a much more promising way to connect rural and remote parts of the world,” the X spokeswoman said.