Merrill Lynch, the investment arm of Bank of America and a powerhouse in the fields of financial and investment advising, has circulated a detailed analysis of the cannabis industry.
The report is 45 pages long and includes intensive research into a number of different financial metrics and business predictions relating to the cannabis industry.
Although it has not yet been published publicly, Chris Goldstein of Philly420 has reported a leaked version of the document.
According to Goldstein, the document explores a variety of cannabis-related products, markets, and fields. It also talks about the current legal status of cannabis, since this plays an obviously central role in the overall profitability of cannabis as a legal product.
Eventually, the report settles into a long exploration of the investment possibilities of what Merrill Lynch advisors termed the “Life Science Tools” sector of the cannabis industry.
This sector has to do with the lab analyses required by states where marijuana is legal.
These analyses screen for a variety of safety factors, and pot must first be tested and approved by these labs before being sold in dispensaries.
As concern over the dangers of pesticides has become a hot topic this year, many states have begun drafting stricter laws to regulate the types of pesticides that can be used on cannabis crops.
Complying with these new and stricter regulations is likely to become an increasingly important—and increasingly costly—component of the overall cannabis industry.
For Merrill Lynch, this represents a potentially profitable place for cannabis investors to focus their money, which is why their analysts concluded that the company is “bullish on the cannabis testing market.”
The report also highlighted a number of “major players” involved in manufacturing the tools required to conduct cannabis lab tests.
These include: “Agilent Technologies, a $4 billion dollar company based in Santa Clara, California; Waters Corporation a $2 billion dollar company based in Massachusetts; and Thermo Fisher Scientific a $17 billion dollar company that keeps two offices in Philadelphia.”
The report also “estimates that the market for this equipment could grow to between $50 million and $100 million by 2020.”
The burgeoning cannabis industry has already attracted the attention of a wide range of wealthy investors.
A report like this, coming from an investment powerhouse like Merrill Lynch, could indicate even bigger business opportunities in the future—especially as cannabis becomes legal in more states throughout the country.