Should you “Secure $1 Shares in This Private Vegas Cannabis Deal?”

What's the pre-IPO story about a "$2 Billion Cannabis Deal About to Go Down on the Las Vegas Strip" being teased by Cannabis Venture Syndicate?

By Travis Johnson, Stock Gumshoe, September 23, 2020

This ad has generated some discussion and a few questions on the site, so I thought I’d help to go through it for you and check on the company being teased — even though it’s not actually a publicly traded stock at the moment. I first covered this ad on June 3, 2020, and it was an odd story back then… but it has actually changed substantially in the past few months (though the Cannabis Venture Syndicate ad hasn’t), and we’re getting lots of questions about a big new push for subscriptions for this one, promising a last chance here to get in on the “most valuable property on earth” before its developed, so I’ve gone through and updated this story to incorporate those new developments and the changing story the company is peddling.

The ad is from the National Institute of Cannabis Investors, which is a Money Map Press service focused on marijuana stocks… and what they’re selling is their “higher end” service that they call Cannabis Venture Syndicate, which seems to deal largely with microcaps or private placements. It’s a huge commitment to an extremely risky kind of investing (the subscription is $1,950/yr, nonrefundable), so I thought I’d walk through it for you and hopefully provide a little context before you throw money at the subscription or the investments they’re promoting. Then if you want to subscribe or invest, by all means, it’s your money — but don’t punch in your credit card number just to learn about a “secret” idea.

And yes, as with all ads, this one sounds tantalizing… it’s about a company that wants to build a huge cannabis superstore/wellness center facility for marijuana sales and experiences near the Las Vegas Convention Center. Here’s a taste from the order form to give you the summary:

“Secure $1 Shares in This Private Vegas Cannabis Deal

“And Potentially Turn a Ground-Floor Stake into a $5.5 Million Windfall…

“Michael Robinson here. I want to thank you for joining me and John today to hear about the unique opportunity opening up in Las Vegas….

“… this company has three critical contracts locked and loaded. Once they put pen to paper, it’s off to the races.

“Deal #1 provides the opportunity to multiply revenue six times over – to $25 million – almost overnight.
“When Deal #2 closes, production capacity will triple almost instantly, putting another $35 million in reach.
“Deal #3 – the planned cannabis resort on the Strip with seven million customers on its doorstep – sets this firm up to be the number-one player in Vegas. Once it gets the green light, total revenue could hit $165 million.”

So that’s what’s getting everyone hot and bothered about the “get rich” opportunity… but what are they actually talking about?

Well, it is a private placement — which means it’s a company selling shares in itself, but directly to investors rather than through an exchange (like the Toronto Stock Exchange or the NYSE). And this newsletter/service is essentially setting itself up as a “matchmaker” to connect investors to the company — I don’t know if NICI has a formal marketing relationship with the company or are directly involved, or if they’re just reviewing the offering materials and passing them along to subscribers with a recommendation, but they’re definitely using that “private company” and “pre-IPO” allure to entice subscribers.

And it’s a company that apparently has dispensaries in place, and some deals to expand, but the real focus of the promotion here is that they’re going to build a huge marijuana facility on the Las Vegas Strip…

“This 70,000-Square-Foot Resort Should Have a Virtual Monopoly on the Strip.

“In fact, according to the company…

“This will be the only place to get, experience, or enjoy cannabis on the Strip for years – even decades – to come.

“And right here, right now…

“You Can Own a Piece of This Cannabis Resort Before It’s Developed!”

With some big projections for the sales numbers that might be generated:

“In fact, the Vegas cannabis market could hit $770 million this year alone.

“By 2021, it’s expected to reach $840 million.

“Soon after, $1.6 billion a year.

“And up to $100 million of those sales could happen at this location.

“Making this, perhaps, the largest retail cannabis outlet in the world.”

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I’d say that it’s not technically “on the Strip,” but the location they pitch is across the street from the new expansion wing of the Las Vegas Convention Center, so it’s more or less between the Strip (Las Vegas Boulevard) and the Convention Center, you’d have to walk about half a mile before you were “on the Strip,” near the downtown end between Circus Circus and Wynn.

Casinos are not allowed to have anything to do with the cannabis business in Las Vegas, the marijuana dispensaries are not even allowed to make deliveries to casino hotels, so that might be about as close as a big dispensary could get to the center of the action. The biggest existing dispensary in Las Vegas is Planet 13, which has its “superstore” location on the other side of the strip, fairly nearby (about the same distance away — half a a mile off the Strip in the other direction, near the Trump International Hotel and the Fashion Show mall).

And they make some hugely bold predictions about the company…

“This Little Company Is Set to Take Over the Entire Cannabis Market in Nevada Before It Goes Public.

“Today, we value this company at about $26 million.

“But soon after this company goes public, I expect the market cap to go up to $2.4 billion.”

And while there’s some strain to the logic here, the assertion that they’re going to “take over the cannabis market” but, at the same time, that the optimistic projection from Michael Robinson is that they’ll account for only 6% of the marijuana sales in Las Vegas in a few years ($100 million out of 2025’s projected $1.6 billion), at least the company really exists and already has revenues — they’re apparently supplying “high end” product to other dispensaries in Las Vegas…