Eric Moore | JP Morgan Private Bank

Michaela Petrone  0:05  
Welcome to joint ventures, a podcast where we delve into the cannabis investment landscape through the lens of investors and operators who helped fuel the growth of the cannabis industry. Today, we're joined by Eric Moore. Eric is a Vice President with JP Morgan private bank, where he advises successful business owners, executives and affluent families through the complexity of their wealth. He provides a unique lens into the cannabis investment landscape. Thanks for coming on the show. Eric. Here's your host, Jordan Tripp.

Jordan Tritt  0:36  
Eric, thanks for joining us today. How's it going?

Eric Moore  0:40  
It's going great. Thanks for having me.

Jordan Tritt  0:42  
All right, awesome. Well, we'll go ahead and get started. So Eric, tell our listeners, what's your background? And how did you get into the investment industry?

Eric Moore  0:51  
Yeah, sure. So I'm a wealth management advisor. And so my specialty is helping investors, business owners and their families with complex finances and planning. And so what that means is, you know, oftentimes, they come to me when they are in a period of transition in their lives, maybe they're selling a business, or they're receiving an inheritance or going through a divorce. Or maybe they're just looking for, you know, some type of change, and some new thoughts and ideas and capabilities, until I kind of help them find meaning and purpose for their wealth, I got into the industry in kind of a non traditional way, I actually had military backgrounds. Prior to getting into the industry, I went to the Naval Academy for college and studied economics. And then I had a seven year Navy career as an officer and got to travel the world and have, you know, just tremendous experiences, but decided to hang it up and get into the private sector. And I went back to business school, got really interested in wealth management. And so I was fortunate to get picked up for a program through Bank of America at the time, where they were looking for people that they could teach the banking and the investments, the wealth management, but had, you know, strong networks of people. And so I built my practice from the ground up. And I've really enjoyed doing so. And I spent a little bit of time at alliancebernstein, most recently, and I'm in the process of transitioning my practice to JP Morgan's private bank.

Jordan Tritt  2:20  
Very fascinating background, just curious, you know, when you look back at the military experience, and then the transition into wealth management, what's one or two things that, that you, really, that you have set you up for success, or that you lean on regularly, based on your military background, I think I'm always amazed and appreciative of people who devote themselves to our country in our defense like that. So I'd love to hear your take on what you've taken from that experience, and how it's allowed you to be so successful in the wealth management side.

Eric Moore  2:57  
Yeah, sure, thank you for saying that, you know, the two things come to mind, you know, just generally, you know, caring for people, you know, in the military, and particularly, as an officer and being in a leadership role, you know, just, you know, putting your people first and going above and beyond for them, and not having them do anything that you wouldn't do yourself has really carried over from me into, into business. And I like to think that, you know, I go above and beyond for my clients and for my network and other professionals that I work alongside. So that's, you know, that's the primary thing, and also just kind of a tenacity and, you know, the grit that it takes to overcome obstacles, I think, is really something that I learned early and often when I was in the military, and you know, that perseverance, just, you know, pushing through, and I had been in uncomfortable situations. And so when I, when I'm in my, in my role as a, as an advisor, you know, I think back to my time in the military, you know, whatever challenges I'm facing at the time, and, you know, let them not getting shot at can't be too bad. But that's that's really helped me in my career.

Jordan Tritt  4:06  
Eric, how do you discuss alternative investments with your clients? And, you know, that's whether they bring it up or you bring it up? Because I know, we initially connected around the discussion about the alternative investment strategies.

Eric Moore  4:22  
Yeah, absolutely. So, you know, alternatives have been such a major part of the asset allocation conversation, particularly in this current market environment, you know, for investors that qualify and have the risk profile to incorporate alternatives that can really be a game changer for their portfolio. And, you know, we've we've seen some, some recent changes in capital markets right in and we've had this amazing, you know, 12 to 15 year run up, and people's portfolios have done very well. But that may or may not necessarily be the case, you know, so A for the next 10 years, right? So we may be in a muted return environment is, you know, that's kind of the, the Wall Street consensus is that we're going to be in that type of environment where you're not going to have quite the return structure on, you know, equities and fixed income. And so, you know, using alternatives are a great way to continue to do the returns that people have come to expect, while reducing volatility and continuing to build a strong portfolio, as long as you can deal with having, you know, some illiquidity, you know, this oftentimes lockup periods and different structures in place. So they're, they're obviously very important that the traditional kind of 6040 equity bond portfolio has has been under a lot of scrutiny lately. And so now we're seeing people using, you know, kind of non traditional investment opportunities, you know, all different types of things, which I'm sure we'll discuss, but to, to kind of break up that 6040. And maybe it's, you know, 40 2040 portfolio, it's now so that's kind of what we're seeing, you know, it's included in every, you know, major conversation that we're having with our clients, and certainly leads to interesting opportunities.

Jordan Tritt  6:16  
So, along the those lines, what is a good entry point into alternative investments? How do you, let's say it's a client that's, you know, familiar with, in general, but you're looking at recommending a certain strategy or just in general, you know, how do you usually get clients comfortable? Or how do you?

Eric Moore  6:36  
Yeah, yeah, sure. So, you know, every client is different, right? So everyone has kind of a different profile. So it really varies, but a lot of times we're seeing, you know, entry points into to private markets. So private equity, private debt, are really opportunities to build a strong foundation for a long term long term investment portfolio, obviously, including that is venture, right, so having conversations around venture capital opportunities, really, you know, set a strong foundation real estate, you know, it's the largest asset class there is, it's certainly a major part of most of the stock portfolios that we see having some interesting conversations around ways to incorporate that a lot of clients like having, you know, tangible assets, revenue, income producing assets in their portfolio. So that's oftentimes what we're seeing. Other things include, you know, hedge funds, that can be a good way to de risk a portfolio, or even now, something interesting is people want to have conversations about collectibles.

Jordan Tritt  7:41  
So how is the cannabis investment opportunity, different or similar to other times in the history of investing? You know, some similarities you see, with the timing now, versus some other alternative asset classes that you've been exposed to in the past?

Eric Moore  7:59  
Yeah, that's a great question. You know, I think you've kind of seen different periods throughout the history of markets, you know, the first one that comes to mind is kind of, you know, prohibition back in the, in the 20s, and 30s, and how the market came out on the other side of that, and I think, you know, the, particularly the alcohol companies, the way they were able to adapt in that environment during the probationary period, I think, you know, a lot of them changed kind of their, they had to change their business structure, so they wouldn't survive. Right. But, you know, ended up doing very well on the other side, once once it was repealed. But I think probably the better comparison, you know, more recently is kind of the.com era, right? We had a lot of interest and a lot of capital flowing into the industry. And there were winners and losers, right. Some of them were really strong companies, but you also had a lot of money flowing into the different firms and investment pools and Penny stocks that were going to survive, right. And that ended up playing out because of this kind of like the Wild West, no one had ever experienced that before. So I think there's lessons to be learned by that, you know, you kind of have to, you know, do your research and understand the fundamentals and make sure it's not just kind of fly by night operators that are looking to make a quick profit, right. So you have to be careful in your in your investments. And I guess the more you know, more recently, it just kind of the crypto industry, we've seen it kind of play out, you know, there's been, there's good actors and bad actors, and a lot of people come left kind of holding the bag here recently because there wasn't due diligence and regulation around it. Right. So I think there's a lot to be learned from that. You know, cannabis obviously has been making a push lately. It's it's gone through some Ball States of regulation, you know, on on the federal level, but you know, there's I think there's a lot of optimism to come out positively on the other side.

Jordan Tritt  9:55  
Absolutely. So given the reality that you have currently at Cannabis is federally regulated. And you know, a schedule one drug, where our opportunities, you know, given your financial positioning, you know, how are you able to, you know, position clients to get access to the cannabis industry without necessarily, you know, touching the plant or being too close to operators that are from a federal perspective? Don't

Eric Moore  10:23  
Yeah. So you might sometimes in conversation with clients, that they really want to take advantage of opportunities in cannabis, right, there's there's a lot of discussion, a lot of research being done, and they feel that they can get in at a great entry point, right. But there's not always opportunities with, you know, larger investment firms and banks to access those opportunities. But, you know, I think that as things continue to evolve, and you know, we're seeing lawmakers and lobbyists pushing to pass legislation to free up capital and allow these types of firms to gain access to banking systems, right, there's going to be a ton of opportunity. And just, you know, in, in current environments, there's a number of blue chip stocks that either directly tied in with with the cannabis industry, or will be or, you know, have a piece that, you know, we're telling clients to look towards and incorporate into their portfolios. There's a lot of volatility and inflationary pressures in the current market environment. And that creates opportunity, but it also creates pullbacks, we we're kind of seeing that volatility play out right now, even this week, you know, with with the news on regulation about the safe Banking Act, right, the hope was that a lot of the cannabis comm companies were going to benefit from passing that and it was going to get tied into the National Defense Authorization Act. But now, you know, as of, as of as early as this week, it's gotten a lot of resistance from certain lawmakers. And so we're seeing that volatility play out, you know, kind of heavy swings back and forth in this in the stock market. You know, because of but, you know, I think there's certainly going to be additional capital flowing into the industry here, as soon as the regulation comes on board. And, you know, smart investors will be there to get in that smart entry points.

Jordan Tritt  12:24  
So shifting gears, again, Eric, we are in a time period in history, where there's massive generational wealth being transferred from the Baby Boomers to the next generation, you talk a little bit about, you know, the transfer of generational wealth, you know, what's happening, and, you know, how this changes your interaction with clients, and how you position yourself to be, you know, in the mix moving forward, and how you navigate those changes?

Eric Moore  12:56  
Yeah, it's really interesting, you know, it's, it's a time like any other, you know, the estimates on the amount of wealth being transferred from the Baby Boomers to the next generation is upwards of $30 trillion. You know, it's, it's pretty remarkable when you think about it. And so with that, comes a lot of opportunity and a lot of work that needs to be done, you know, as far as education and facilitating transactions to help those individuals and the families that are going to need support to sustain and create legacies and ensure that that wealth doesn't disappear through the generations. And so we do a lot of work, having conversations of how we can support families to do that. And a lot of times we're seeing the next generation is really stepping up and wanting to talk about how they can play a part in making decisions for the family and, you know, making an impact with their investments, right, I think more so than ever, it's for maybe for some time, it was a little taboo to talk about wealth in particularly in between family members. But you know, the, I think the younger generations really want to hone in and focus and have conversations around doing, you know, well, but also doing good, right as what we say and push putting their values into the portfolio so that they can make a difference. And this kind of ties in with ESG investing as we call in the industry, environmental, social and governance investing and, you know, that's thinking through the impact that companies are making and holding up the higher standards and being more diverse in a number of ways. And so there's a whole movement within the financial service industry to facilitate those conversations and building that into portfolios.

Jordan Tritt  14:50  
You mentioned impact investing, I think about a conversation I just had recently with a with a member of a family office and what he mentioned was, you know, historically, this family wasn't interested in the cannabis industry. But they had a situation where the mother of the patriarch ended up getting sick and having to deal with cancer. And one of the places she got relief was from cannabis. And now it's become a an impact investment for the family. And the challenge that in this case that the investment professional shared with me is, okay, you've got this directive to go and get more exposure to cannabis, because it's an impact investment, we want to, you know, the patriarch wants to support the industry, but they don't have the, like you mentioned, it's not set up in a way where they're familiar with executing their strategy, because it's such an unknown, highly regulated industry. And a lot of times, you know, they don't have the setup for this. So, you know, do you see similarities like in this where you have an impact investment, and then some sort of disconnect between, you know, how that actually gets played out from an investment perspective? And, you know, where do you see that intersection, potentially, between the ESG impact investing in cannabis. And,

Eric Moore  16:14  
yeah, I think it's gonna be really interesting to see how it plays out, right, because we're going to see this dynamic shift from cannabis maybe being included in what has previously been known as a sin stock. So things like alcohol, firearms, oil, just you know, things that maybe are bad for the environment. So the you had this category since the accident, but it's going to, I think, completely change, the narrative is going to change around that because of the medicinal purposes, right, and all the benefits to society that cannabis is going to have. And so you have a completely dynamic shift from from the previous thinking two to one that is making an impact on communities in a number of ways. And so there's so much opportunity in that. And conversations are only going to play out as the industry grows, you know, I think enough statistics, over the next 10 years, it could be upwards of you know, 150 to $100 billion industry, right. And so there's a number of ways to capitalize on that. But as far as, you know, just building out impact portfolios, and, and including cannabis in the conversation, it's gonna be really interesting to see play out,

Jordan Tritt  17:27  
Eric, given what you just mentioned about the evolution of federal regulation and how large the market is going to become over time. How are you interfacing with clients? And what are you recommending them to do right now to be in a position to capitalize on the opportunities in the future as federal regulations within cannabis change?

Eric Moore  17:48  
Yeah, so you know, there's obviously certain restrictions currently with larger banks and investment firms that have kind of hindered the opportunity. But I think there's a lot of growth potential in having relationships between investment advisors and professionals and venture capital firms, you know, making introductions to people like new Jordan to open up a suite of capabilities and investment opportunities is really going to be impactful. And I think there's plenty of room for drug for people like us to work together in order to support common clients, right, and showing them what is out there and how we can support them together.

Jordan Tritt  18:29  
Absolutely. And that's why we created this, this forum and want it to be broad in terms of the guests that we have on, because we know that, you know, we are at a point in time right now, where capital looks a certain way, but there's gonna be this evolution over time. And this will become like any other industry and big opportunity that we know about a lot of ways bigger than than other industries. And, you know, between now and that future, this is the ideal time, like we talked about, this is a opportunity for, for capital that isn't restrained by you know, you know, their own kind of, you know, regulations and rules to be able to deploy. And you know, we just want to be a part of that conversation and continue to be a resource for those individuals as well as their professional advisors like you. So, again, thank you for joining us. They're great having the conversation know, the audience will enjoy it and look forward to continuing our relationship together in the future.

Eric Moore  19:29  
I really enjoyed it. Jordan, thank you for having me.

Michaela Petrone  19:33  
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