Oil and Gas Moguls Find Growth in Cannabis Companies
NEW YORK ( MainStreet) While the oil and gas industry is set up for big corporations, the cannabis industry is well suited for small corporations and entrepreneurs. But that's not preventing Chris Bunka and his business associate Robert McAllister from investing in cannabis companies.
"We have one oil and gas option in Pennsylvania and when that expires Enertopia will be 100% in medical cannabis," said McAllister who launched Enertopia (ENRT), a publicly traded company poised to invest in cannabis companies . "We liked the opportunities we found in the cannabis industry.
In fact, McAllister and Bunka's experience in the oil and gas industry has prepared them for investing in cannabis companies .
"We deal with the SEC and Canadian regulators and oil and gas regulators on a daily basis so we understand the budgeting, regulations and procedures required in highly regulated sectors such as cannabis companies," Bunka told MainStreet.
The synergy between the oil money and cannabis industry growth potential seems inevitable.
"There could potentially be a Lexaria cannabis field depending on when and if cannabis is legalized federally in the U.S," said Bunka, who is a co-owner of the Lexaria Corp's Belmont Lake Oil Field in Mississippi. "That's when we will make a big move but not in Canada because it's too cold outside to grow cannabis in the U.S. You can grow it outside in America. That's an advantage the U.S. has over Canada."
Enertopia is valued at $45 million dollars while Lexaria's oil field is worth $6 million based on SEC filings with a total market cap of $15 million.
Both Bunka and McAllister hail from Canada, and McAllister is drawing from his experience in the oil and gas mining business to launch his cannabis ventures.
"It's the same policies and procedures running a public company," said McAllister. "There's different regulations but both have regulations. In that way, the industries are similar."
McAllister, serves as the president and CEO of Enertopia Corporation, is looking to invest in cannabis companies.
"The ideal start up would be a company in one of the legal cannabis states but not California, because they are not for profit and its difficult to structure a joint venture or business deal under the current legislation," said McAllister.
Meanwhile, Bunka is having a hard time finding quality start ups to invest in even with several hundred thousand to several million dollars to plunk down.
"It's hard to make the transition from a two person privately-run small pop and mom to something that can scale up to hundreds of employees," Bunka told MainStreet. "It's a tough thing but we are experts at this."