Appraisals of legal marijuana firms continue to be challenging and risk is a major factor, say Ron Seigneur and Ryan Cram, who are both with Seigneur Gustafson LLP, a firm based in Colorado, one of the first states to legalize adult recreational marijuana. During a recent webinar, they cited an engagement in which an additional risk premium of 20% was added to the discount rate to account for specific company and industry risk, bringing the total discount rate to 45.8%. This is on a par with the cost of equity for first-stage or “early-development” companies, they pointed out. Seigneur and Cram recently co-wrote a BVR Briefing: “Cannabis and Hemp Valuations: A Market Analysis.”

Extra: Cannabis sales are getting a boost in California to “ease minds” over the coronavirus, according to a report in the Hollywood Reporter.