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Cannabis in 2023: Here to Stay, but Major Challenges Remain

By Joshua Weiss, Osiris Morel
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2022 brought more change and visibility to the cannabis industry than nearly any year before. Two of five legalization ballot measures passed, bringing the total number of states with legal medical or medical and recreational laws to 39. President Biden issued an executive order pardoning nonviolent offenders and directing a review into rescheduling cannabis. The Medical Marijuana and Cannabidiol Research Expansion Act was enacted. Cannabis arose prominently in legislatures across the country, with over 50 federal bills and hundreds of state-level measures introduced.

We’ve yet to see the full impact from Biden’s October 6 announcement

But as 2022 came to a close, only a handful of actions are being carried into the new year, and the industry faces more hardship and turmoil than it has since the inception of legalization. Legal cannabis retailers and cultivators in markets across the country continue to struggle with onerous regulations and competition from the illicit market, and oversupply in these markets is driving down prices as West Coast growers and manufacturers anxiously await interstate commerce.

Looking ahead to the coming year, industry watchers can anticipate certain issues and legislation: further investigation into cannabis’ classification on the Controlled Substances Act (CSA) from federal agencies, federal cannabis pardons coming to fruition, a follow-up from the Department of Justice’s technical report, and the reintroduction of high-profile federal legislation, like the Cannabis Opportunity Act (CAOA), the States Reform Act, Marijuana Opportunity Reinvestment and Expungement (MORE) Act, Harnessing Opportunities by Pursuing Expungement (HOPE) Act and the Secure and Fair (SAFE) Banking Act.

Below, we recap some of the big moments of 2022 and what to expect in 2023.

A Presidential Pardon for Simple Possession

On Oct. 6, President Biden made a historic announcement to “grant a full, complete, and unconditional pardon to all current United States citizens and lawful permanent residents who committed the offense of simple possession of marijuana in violation of the Controlled Substances Act” and “all current United States citizens and lawful permanent residents who have been convicted of the offense of simple possession of marijuana in violation of the Controlled Substances Act.” His executive order also encouraged governors to follow suit for cases regarding state offenses and requested that the secretary of Health and Human Services and the attorney general “expeditiously” review how cannabis is scheduled under federal law.

Biden signing his executive order back in October of 2022

The president’s strategic plan attempts to at least partly address some of the adverse impacts of the United States’ war on drugs on certain populations like low-income and Black and Latinx Americans. While an admirable and important effort, certain portions of his executive order will take much longer than others to yield tangible impact. A federal pardoning can take anywhere between two to five years, and the laws and duration of state-level pardoning vary—depending on the state and its governing practices. Additionally, since governors are not required to pardon individuals following the president’s executive order, some convicted persons may never see or be able to seek justice. And the most uncertain timeline relates to the review of cannabis’ classification on the CSA. Rescheduling or descheduling a substance under the CSA can be tedious and grueling, and, as seen with other substances, the process can range from four to ten years. However, the exercise is ongoing, and although results may not be shared in time for the 118th Congress, it is to be expected that the issue will be discussed at length in 2023 and beyond.

Descheduling, Decriminalizing & Banking Legislative Efforts  

1. CAOA.

When it comes to legislation, there is no question that Majority Leader Chuck Schumer (D-NY) and Sens. Ron Wyden (D-OR) and Cory Booker (D-NJ) will reintroduce the CAOA in 2023. The comprehensive legislation aims to decriminalize cannabis by removing the drug from the CSA and tackles issues related to research, public safety, restorative justice and equity, taxation and regulation, public health and industry practices.

2. States Reform Act.

Sen. Schumer unveiling the Cannabis Administration and Opportunity Act

Another piece of legislation we anticipate seeing in the 118th Congress is Rep. Nancy Mace’s (R-SC) States Reform Act. Coming from a state without any cannabis laws, the freshman congresswoman introduced a measure that would federally decriminalize cannabis by fully deferring to state powers over prohibition and commercial regulation and regulate cannabis products like alcohol. In 2022, the bill received positive feedback from the industry and dominated the discussions during the Developments in State Cannabis Laws and Bipartisan Cannabis Reforms congressional hearing. With its bold cannabis sponsor, who will now serve as the House Oversight Subcommittee on Civil Rights and Civil Liberties chair, the States Reform Act will undoubtedly take center stage in 2023.

3. MORE Act.

Sponsored by Rep. Jerry Nadler (D-NY), the MORE Act will also be reintroduced in 2023; however, it remains to be seen how much attention the bill will receive. The MORE Act aims to decriminalize cannabis by removing the drug from the CSA and eliminating criminal penalties for anyone who manufactures, distributes or possesses cannabis. In the 117th Congress, Rep. Nadler served as the chair to the House Judiciary Committee and was able to advance his measure through the chamber with ease. But since the House majority has flipped, and Rep. Jim Jordan (R-OH) is likely to serve as the chair, getting the MORE Act to the floor for a vote may be challenging—especially given Rep. Jordan’s opposition to the cannabis sector.

The House passing the MORE Act back in 2020

4. HOPE Act.

The HOPE Act often flies under the radar, but this Republican-sponsored bill made headlines during the 117th Congress. Sponsored by Co-Chair of the Congressional Cannabis Caucus (CCC), Rep. Dave Joyce (OH), the bipartisan legislation aims to help states with expunging cannabis offenses by reducing the financial and administrative burden of such efforts through federal grants. Although it was not considered in the House, the language of the bill was heavily debated by the Senate, particularly toward the end of the year when the chamber was negotiating the final text for end-of-year must-pass packages, like the National Defense Authorization Act (NDAA), the Omnibus and the Continuing Resolution (CR). Alongside the SAFE Banking Act, the HOPE Act was one of the only cannabis bills that had a realistic chance of advancing as part of a larger legislative vehicle, so there is no question that the congressman will reintroduce the measure in the upcoming congressional session.

5. SAFE Banking Act.

And last, but certainly not least, is the most discussed cannabis bill this year: the SAFE Banking Act. The legislation aims to create a safe harbor for financial institutions to provide traditional banking services to cannabis businesses in states that have legalized the drug. It also allows cannabis businesses to access lines of credit, loans and wealth management. It has now passed in the House seven times, with bipartisan support. And although the SAFE Banking Act was debated by the House several times throughout the year, the Senate did not tackle the bill until November. By the time discussions for the bill’s language had taken off, Sen. Booker remained firm that he would only support a cannabis bill if it included criminal justice and social equity reform language. In an attempt to satisfy the senator’s demands, Majority Leader Schumer considered marrying the SAFE Banking Act and the HOPE Act as part of a larger package.

However, and much to the cannabis industry’s detriment, not only was the timeline for those bills a little too late, but Democrats were, unfortunately, unable to fix the money laundering and cash legacy concerns of Sen. Chuck Grassley (R-IA) and other Republicans.

Sen. Cory Booker (D-NJ)
Photo: Nick Fisher, Flickr

After attempting to attach the SAFE Banking Act to multiple vehicles, retiring Congressman Ed Perlmutter (D-CO), sponsor of the legislation, and Sen. Schumer were unsuccessful in getting the bill over the finish line. In a final Hail Mary, Sen. Schumer attempted to include the language to the Omnibus, but compounded with the technical assistance report from the Department of Justice (DOJ) and ongoing media flurry, he and the Democratic party yet again came up empty-handed.

The question now is: who will carry the SAFE Banking Act and Rep. Perlmutter’s legacy in 2023? Many will look toward cannabis industry champions like Reps. Joyce, Mace, Earl Blumenauer (D-OR) and Brian Mast (R-FL). However, it would be worth considering other members of the CCC and some of the incoming freshmen, particularly those from a state with legal cannabis laws. It is also entirely possible that Sen. Jeff Merkley (D-OR) finds his own sponsor to carry his companion bill in the House since he has already announced that he looks forward to working on the legislation in the upcoming year. Regardless, it is highly likely that the SAFE Banking Act will be reintroduced in 2023 and considered throughout the year.

6. Other Measures

Other measures that are likely to reappear in 2023 are the Capital Lending and Investment for Marijuana Businesses (CLIMB) Act, Veterans Equal Access Act, the GRAM Act, Common Sense Cannabis Reform for Veterans, Small Businesses and Medical Professionals Act, VA Medicinal Cannabis Research Act and the Homegrown Act. Additionally, the passage of the Medical Marijuana and Cannabidiol Research Expansion Act and the advancement of many of these federal bills have opened the gates for new legislation related to medical and recreational cannabis, research, veterans’ access, financial services, criminal justice reform and social equity, and public health and safety to emerge.

For states with legal cannabis laws, bills related to enhancing the state’s medical or medical and recreational programs, preventing industry oversaturation and price gouging, expanding licensing opportunities, criminal justice reform, youth and advertising protections and impaired driving are likely to be introduced. States where cannabis ballot measures failed will likely see those measures resurface.

The continued growth of legalization across the country is all but inevitable. In the nearer term, the industry will focus on how to remain viable in the face of high taxes and oversupply in 2023. New Congressional leadership could lead to bipartisan cannabis legalization if enough members are willing to rally behind their colleagues who are pushing for cannabis legislation. While the road is long before we will see the full impact from President Biden’s Oct. 6 announcement, the action proves those in power cannot ignore the ever-growing numbers of Americans across party lines and demographics who agree that cannabis use should be legal and regulated.

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Investment Strategies for Entering the European Cannabis Market

By Niklas Kouparanis
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For U.S. venture capitalists (VCs), the burgeoning European cannabis market provides opportunities to break into the industry on the heels of adult-use legalization. Germany has set its sights on implementing a recreational market by 2024, and the country, along with several other European Union (EU) countries–Malta and Luxembourg–came together in September 2022 to draft a joint statement on why the EU needs a new approach to cannabis use for adult-use production, sale and consumption.

german flag
Photo: Ian McWilliams

In October 2022, Germany took further steps to solidify its plans for legalization further when its Health Minister Karl Lauterbach presented a cornerstone paper on planned legislation to regulate the controlled distribution and consumption of cannabis among adults. Such actions have signaled to both the EU and the world at large that cannabis legalization in Germany is imminent, and the country is championing the new age of cannabis policy.

With the new German cannabis market soon to be on the horizon, both foreign and domestic VCs are considering how to best leverage investment opportunities into existing cannabis companies within the current medical-only market that will transcend into adult use. For U.S. investors, it’s important to do their due diligence to find the company that will transcend into the next progression of cannabis policy. In addition, European cannabis companies must do their own meticulous research when it comes to aligning with investors to meet both their financial and business goals.

How U.S. VCs Can Evaluate Investment-Worthy European Cannabis Companies

As with any investment, VCs benefit from researching the company and market they are planning to invest in. Regarding the company of interest, it’s important to examine which part of the cannabis market the company is serving: growers, retailers, ancillary products, service providers and biotechnology companies all exist as potential investment options within the space. An investor should look into a company’s annual revenue, evaluating whether it has increased, remained steady or decreased over time. Revenue growth is often provided on a company’s income statement.

In addition to making sure they have a thorough understanding of the business model and its value proposition, investors should also familiarize themselves with the company’s management team to make sure that they are knowledgeable and experienced in both running a company and the cannabis industry. For those interested in entering the German market, VCs should consider the businesses that are currently key players in the country’s medical cannabis industry and that plan to expand their services into the adult-use sector once legalization comes into play.

For example, Tilray, founded in 2014, was one of Canada’s first licensed medical producers. When Canada legalized adult-use cannabis several years later, in 2018, Tilray was one of the companies that successfully transitioned to expand its market share in Canada’s medical to the adult-use cannabis industry.

Another consideration for VCs is the reputation of the business and its leaders. Investors should seek out those who have become authorities within the industry and the movers and shakers who are providing key insights into the market. These business leaders should be front and center, discussing everything from current operations and compliance to cannabis policy and legislation to new endeavors and growing their businesses. With recreational cannabis legalization being a completely new endeavor for the EU, it is important for leaders within today’s European medical space to be visionaries for the next phase of cannabis legalization and be guides for creating regulations for this new market to be safe, sustainable and scalable.

In addition to executive teams, VCs should check if the business is meeting the current marketplace’s expectations and is ready to adapt and evolve as needed. This means that the company has access to a steady supply of high-quality cannabis at an affordable price and access to consumers (medical patients) and potential consumers. With adult-use legalization soon to be a reality in Germany, investors must consider which players in the medical-only market will be able to not only survive the transition but grow to become leaders in Germany’s new recreational market and within the EU as a whole. 

What Do European Companies Look For in Terms of U.S. VCs

Just as VCs must find the right fit for them in terms of investments, cannabis companies must also align with investors that help them meet their financial and business goals. For cannabis companies, many seek to align themselves with VCs experienced in consumer, technology, and healthcare investments. While there are benefits to working with a VC with a cannabis background, companies should not deter investors who do not meet those specific criteria, as the cannabis market is still a fairly new and ever-transforming industry. In light of this, it’s important that investors approach opportunities with an open mind for both the industry’s current state and its potential.

european union states
The European Union

As with most investments, both VCs and companies should be prepared to agree to a term sheet, a document that outlines the relationship between the investor and the business. An ideal investor would need to be supportive, well-connected, and add value by providing relevant business knowledge. While some investors seek a more hands-on role, in most cases, the VC’s support will not be equal to the business’s micromanagement or control of its day-to-day operations. Generally, those responsibilities would remain with the company’s executive team.

As an investor, it’s important to be supportive of the business; be a cheerleader for the company when things go well, and lift up the business when challenges occur. In addition, offering a network of referrals and strategies to excel is key to being a good asset to the business. Also, having a diverse portfolio of companies with synergistic opportunities can be very beneficial to growing cannabis businesses.

A question many investors ask before entering the space is how much in assets they should have on hand to be considered an eligible investment size. Typically, this depends on the business and its financial needs. Small profitable cannabis businesses that want additional financing may be able to secure a bank loan, if possible, in their home countries or seek a seed investment-focused VC for some capital. Leaders in Germany’s current medical-only market are seeking investors, both from the U.S. and abroad, to partake in Series A/B funding, seeking financial partners that can help them reach a goal of $20-80M USD.

European cannabis companies are within a high-growth market, so U.S. VCs looking to enter through investment do not have to go through a private equity firm. An investor can approach companies through networking or direct outreach. It is also important to note that investors do not have to convert their assets from USD to EUR, as it is done automatically when making investments. For the first time in 20 years, the USD and EUR are about equal, so now is a great time for U.S. investors to consider making the leap into European cannabis.

2023 Dispensary Design Trends

By Melanie Coddington
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This year we have seen some awesome evolution in the design industry. Retail cannabis design is leading the way. Here are some trends to keep an eye out for as we approach the new year and look at the artistic elements that are elevating the cannabis retail experience.

Bold Color

House of Jayne dispensary interior

Goodbye all white Apple store. Hello bright colors of the rainbow. Design pioneers are tired of the safety of neutrals. Pattern mixing, bold use of colors, lights and art that blur the lines between ‘wildly tacky and holy cow that’s amazing.’ We’re not talking about a few fun pops of color; we’re talking full walls of color, bold displays and fixtures. Cannabis isn’t for the meek and it’s so exciting to finally see it reflected in design.

Experiential Retail & Sensory Immersion

The new vision for cannabis dispensaries (specifically in adult use locations) is one that absolutely combines multiple sense-touching points within the space and flexes the space to include adjacent hybrid areas. This is mostly driven by the Gen Z consumer. A quick example would be if the dispensary has florals or greenery, the shopper will want to feel like they’ve been transported to the great outdoors. Feel the wind, smell the grass, hear the birds. You get the idea, a full immersion into whatever theme or vibe the brand is putting out there. Customers love being transported to a new place and interior retail design is absolutely the coolest way to do it. This ties into the recent social media trend, ASMR (autonomous sensory meridian response), where you can experience a tingly euphoric feeling triggered by a carefully created clip. We love the way our environment can sway the senses away from the everyday and into somewhere extraordinary.

Ounce of Hope dispensary interior

The goal here is to pull customers into the store and offer them something far more than a quick and dirty sale. Experiential spaces will also have those hybrid areas that merge the brand with something other than cannabis. This is tricky due to compliance, but we are loving the mixture of yoga, spa, lounge, arcades, art gallery and even bowling within a dispensary. If you’ve shopped at Sheels, you know all about this. A full ferris wheel, restaurant, aquarium and spa inside the sporting goods store. This is definitely a trend that reshapes the standard shopping model and is unique to cannabis.

Digital Forward

Are we being bombarded with digital, phygital and AI in our everyday lives? Maybe. And cannabis customers love every drop of it. More and more we are seeing interactive, digital, full-on wall displays that make you feel like you’re at a museum exhibit. The initial investment can be spendy, but the ultimate flexibility and control (and shopper ooh’s and aah’s) make it all worth it. Imagine an incredible wall showing farm footage, where you can touch the image of the plant and an info bubble pops up describing the terpene and showing it being distilled into a tincture. Bored? Flip it to footage of your latest social event. Whatever you want your customers to see and interact with is completely up to you. More and more we are seeing the digital arts incorporated into dispensary design.

Addressing Cannabis Price Compression With Science

By Mark Doherty
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Cannabis cultivators across the U.S. are confronting plummeting wholesale prices and tighter profit margins. Operators in Pennsylvania say flower prices have fallen from around $4,000 a pound to around $3,000, on average, and prices in the more mature markets of California, Oregon and Colorado have experienced extreme volatility. Prices in those states are averaging around $700 per pound but of course, that’s an average. There are whispers that prices are as low as $150, revealing how bad the situation really is.

Oversaturation of legal cannabis affects commercial growers everywhere. For example, when Oklahoma opened its free-wheeling medical cannabis program with unlimited business licenses, the pipeline of cannabis from legacy markets in California was disrupted and a glut of flower from the gray market began to influence pricing within the state’s legal market. Although cannabis is not federally legal and interstate commerce is banned, what happens in one state definitely affects what happens in another.

Competition in legal markets has also increased dramatically in recent years as multistate operators expand their footprint and consolidation proliferates. Vertically integrated cultivation, manufacturing and retail is becoming unsustainable for many mom-and-pop businesses, while MSOs can leverage their cash and resources to weather the current storm.

Economic Viability Meets High Quality Production

All of this news is not necessarily negative, but it’s a definite cautionary tale: Being complacent opens opportunities for others. Growing cannabis is complex. It is working with a living and breathing machine. Some businesses fail because operators are not able to find the perfect blend of horticulture, plant science and manufacturing efficiency necessary for success. Some see it simply as a manufacturing concern, others a scientific endeavor, and still others as an artform. An understanding of growing cannabis as a blend of all three is paramount.

Just like the LED evolution, other new cultivation technology is here to stay and should not be brushed off as just experimental

Squeezing more high-quality product out of existing facilities is essential. Costs for labor and electricity are relatively fixed, so operators must turn to technology to improve yield, quality, consistency and plant health without increasing operating expenses.

Over the years, growers have often resisted change surrounding what they view as “the way” or “the best,” but with the industry in such distress, the time is now to address facility inefficiencies.

Much like the evolution of LED use, there might be an initial skepticism at the cost and real value of new cultivation technology, but the economics are too compelling to ignore. The majority of all indoor grows now use LED. The progression from single-ended bulbs, to double-ended HPS, to LED is analogous to plants on the floor of a grow facility, to rolltop benches, and now to vertical farming using racks.

Vertical Cultivation Science

Crop steering applies plant science directly to commercial production. The methodology is based on the idea that plants can be manipulated to grow and perform a certain way. For cannabis plants, the science really comes into play with inter-canopy airflow.

When airflow occurs under the surface of the leaf of the plant, the stomata opens and gas exchange increases as water vapor and oxygen are released and carbon dioxide is absorbed. The micro-barrier of air trapped against the leaves is broken and the exchange of gasses and energy in the cultivation environment is improved, enabling the entire grow to increase its yield. And while CO2 supplementation is widely used and has been for years with positive effect, the under-canopy airflow provides greater efficiency relative to the operating expense of pumping CO2 into the grow room. Money can be saved by applying science to encourage the plant to uptake the extra CO2 that has been naturally released.

Proper Drainage Is Also Key

Controlling the space with proper drainage will keep a host of problems at bay

Drainage issues like the puddling of water in vertical farming are detrimental to the efficiency of a cultivation facility. Even when growers use precision irrigation techniques to give the plants pinpointed irrigation volumes over different time periods, rack systems can still suffer from drainage issues. That means that affected plants are not receiving the precision irrigation strategy and the entire purpose of the scientific application is defeated.

Precise drainage is critical because standing water opens the door to root born disease, pests, and microbial issues. Spray regimes can address this problem, but they cost money. The key is to reduce dependency on mitigation efforts by better controlling the agricultural space and improving outcomes with a scientifically approached plan.

Greenhouses, warehouses and vertical farming facilities all have potential environmental issues that reduce their economic viability, but with proper vertical air movement, drainage equipment and an understanding of microclimates and how to address them scientifically, efficiency and product quality are enhanced.

Time to Embrace Change

As with any industry, there is resistance to adopting new technology in cannabis cultivation. The original and legacy players will always claim they know how to best grow their plants, but the reality is that the business needs must be addressed.

As canopies increase within a facility, advancements like robotics, LEDs and advanced airflow technology define how the industry operates and continues to improve. Efficiency keeps business alive—cannabis growers must continually assess their operations and make the capital investments that will pay off as wholesale prices continue to decline.

2022 Cannabis Supply Chain Virtual Conference

By Cannabis Industry Journal Staff
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2022 Cannabis Supply Chain Virtual Conference

Sponsored by CannaSpyGlass

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Click here to see all available CIJ events and webinars

Agenda

A Smarter Cannabis Beverage Distribution Model

  • Jason Vegotsky, Chief Executive Officer, Petalfast

Current cannabis distribution models make it hard for emerging cannabis beverage brands to launch and scale their businesses successfully. Instead, the wine & beverage sector could provide a model that would allow these brands to build relationships with retailers, foster competition, and improve brand diversity for consumers. In this presentation, Jason Vegotsky will delve into the cannabis sales and distribution model, examine how current models hurt emerging brands and products, and analyze how other CPG models, specifically in food & beverage industries, can be applied to cannabis to build relationships and improve sales.

Track-and-Trace Technology: Building Resilience in the Cannabis Supply Chain

  • Michael Johnson, CEO, Metrc

Building resilience in supply chains is a goal for all parties involved in a given market. Governments have an interest in protecting the health of consumers while safeguarding the flow of goods; businesses want to stay compliant while efficiently moving products; and consumers want and should expect that the products they buy are safe and effective. With heightened awareness around transparency and consumer safety in the cannabis industry, track-and-trace technologies have been central to building broad trust by ensuring more secure supply chains. In this presentation, Michael Johnson will discuss how these tools will continue to be deeply transformational in the sector.

Improve Your Operations through Cannabis Industry Analytics – CannaSpyGlass Sponsored Tech Talk

  • Adam Hutchinson, Co-Founder, CannaSupplyGlass

As new markets legalize and additional business licenses are distributed, competition between cannabis operators is intensifying in every stage of the supply chain from seed-to-sale. It is now tougher than ever to carve out a piece of this increasingly saturated market and cannabis operators aiming to succeed must incorporate industry analytics into their decision-making process. With data analytics, cannabis is no longer an industry of trial and error, and in this session, cannabis operators will learn how to obtain and utilize data analytics to improve their businesses and sustain long-term growth.

Quality and Safety and the Edibles Supply Chain

  • Steven Gendel, Ph.D., Principal, Gendel Food Safety

As the number and variety of cannabis and hemp-containing edibles continues to increase, the supply chains for these products have become complex and diverse. This means that manufacturers must understand how to develop and apply supply chain controls that protect consumers and ensure product quality and safety.  For example, a simple cannabis-infused baked product might contain more than 20 non-cannabis ingredients sourced from multiple suppliers.  The manufacturer of this product must ensure that each of these ingredients meets specifications every time a new batch or lot is received and used.  Unfortunately, there is little guidance available to the cannabis industry (especially those who are not familiar with food manufacturing) on how to identify and evaluate supply chain risks or on what controls will be most effective in mitigating these risks.  This talk will look at the steps that cannabis manufacturers can take to evaluate their supply chain, monitor and control identified risks, and respond to changes in the industry landscape.

Managing Cash Flow in the Cannabis Supply Chain

  • Nohtal Partansky, Co-Founder & CEO, Sorting Robotics

The cannabis supply chain has pitfalls and landmines that can severely hurt a business if navigated improperly. The balance between branding, packaging, growing, distribution, testing, and quality is difficult to achieve. If one of aforementioned topics fails to deliver, it can mean huge financial losses or the death of a brand. In this presentation, we will cover how managing cash flow throughout the supply chain is critical to running a successful operation. There will be several case studies in improperly managed supply chains and their consequences on the balance sheet. There will also be an exploration of what the ideal supply chain would look like in the California market, how that correlates to other adjacent industries, and how it manifests into liquidity.

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Financing the Cannabis Industry Part 2: A Q&A with Pelorus Equity Group Managing Partner, Travis Goad

By Aaron Green
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Businesses often require outside capital to finance operating activities and to enable scaling and growth. Financing in the cannabis industry is notoriously challenging with regulatory obstacles at the local, state and federal levels. Recent market dynamics pose additional challenges for both financiers and cannabis operators.

We sat down with Travis Goad, Managing Partner of Pelorus Equity Group to learn more about Pelorus and to get his perspective on recent market trends.

Aaron Green: In a nutshell, what is your investment/lending philosophy?

Travis Goad: Our investment and lending philosophy is focused on being honest, upfront and doing what we say we’re going to do for both our borrowers and our investors. At Pelorus, we lend against cannabis-use real estate assets.

Every lender in this space is a hybrid between real estate and corporate lending. However, if you think about it as a political spectrum, with one side being pure real estate lending and the other pure corporate lending, Pelorus is as close as you can be to pure real estate lending in this sector while also being properly collateralized. What sets us apart from our recently launched lending peers is that we lend against the real estate asset value only, even though we’re collateralized by the real estate and license.

We lend between 60% to 75% of the value of the real estate, which means sponsors need to raise equity for the 25% to 40% remainder of the project cost. This allows us to be covenant-lite for our borrowers while giving them the flexibility to grow their business as they see fit.

Travis Goad, Managing Partner at Pelorus Equity Group

The other lending options in the space are much different. While our lending peers may call themselves mortgage REITs, they really are based on a business development company (BDC) lending model. While they may lend borrowers as much as 150% to 180% of the real estate value, they will require significant financial covenants, require control of major decisions and most often want a board seat. We’ve seen this model severely hamstring growth of companies.

The third option available to sponsors is a sale-leaseback. In this structure, lenders will buy your real estate for 100% of the value, but require you to enter into a 15-to-20-year lease that increases 3% each year. There is a temporary benefit to this model from a federal tax perspective, but that will go away when 280E is addressed, either by descheduling cannabis or amending the tax code.

While this structure means you don’t have to raise equity, it gives up the most valuable asset cannabis companies have in the early stages of the industry. Once you sell this asset, it hampers optionality for sponsors – and in a fast-growing industry like cannabis – optionality is the most critical thing a company has. Pelorus’ structure allows maximum optionality, as well as the ability to lower your cost of capital as the industry matures.

From an investor standpoint, they should know that the BDC and sale-leaseback models are a lot riskier than our model. While we’ve seen those models work well in mature industries, we think the cannabis industry is too early-stage and too volatile to go that far out on the risk spectrum. We have the longest history in the space of deploying capital successfully and seeing it returned. Prior to making any loans, we spend a lot of time underwriting the company we’re working with, the real estate and the projections. We look for strong sponsors, great projects and attractive markets.

Before we entered the cannabis lending space, our team at Pelorus had more than 5,000 transactions under our belt, worth $5B, and we leveraged our decades of underwriting experience when starting the Pelorus Fund. As the first dedicated lender in the cannabis space, we have more data and experience than anyone in terms of transactional volume – we’ve looked at more than 2,000 deals and have made 71 deals, worth $468M. We know the intricacies of every market, the particular ordinances, what the costs should be, and utilize the data to help our borrowers succeed. Through our deals and sustained success, we’ve made a name for ourselves as the most trusted and efficient lender in the cannabis space.

Green: What types of companies are you primarily financing? 

Goad: We finance construction and stabilized loans for a range of clients including MSOs, SSOs and ancillary companies. We don’t lend on outdoor cultivation, but are open to working with any cannabis-related business that has commercial real estate, strong financials and experience in the cannabis space. Today, our sweet spot is closing loans in the $10M to $30M per transaction range, but we can fund loans $100M+ and as low as $5M. Since 2016, we’ve financed 4.2M feet of cannabis-use properties for a total of $468M in loans – roughly 15% to 20% of the entire US market.

Green: What qualities do you look for in a cannabis industry operator or operating group?

Goad: We are meticulous in our underwriting process and underwrite the company, the real estate and the market. We’re one of the few lenders today that has capital to deploy, which has given us the opportunity to continue to take market share while also increasing the quality of our borrowers. Whether you’re an MSO, smaller state operator or ancillary business, we recognize quality across the sector. Brand affinity and shelf space are critical in this market, and we like working with companies that have a competitive edge in getting their branded product to customers. We try to target companies that offer a unique product, or have a unique position within the state they are located.

To qualify for our lending program, borrowers need to own their real estate. If the sponsors own the real estate or intend to own the real estate, we offer two main lending products: we provide construction loans that range between 60% to 75% of the project that are typically 18-month terms; and more recently implemented, we also lend on fully stabilized assets that are cash flowing and operational up to 75% of the value and up to a 5-year term.

By the time a borrower comes to us, they should already have a license (or be acquiring a license at closing), have their required equity raised to completely fund the project and have all local approvals to begin construction.

Green: Capital market dynamics have led to significant public cannabis company revaluations in 2022. How has this affected your business? 

Goad: As far as how market dynamics have impacted our fund, we’ve been pretty insulated because we are a privately held company. From our inception, we’ve worked hard to create an innovative model, and have had many firsts. We were: the first dedicated lender in the cannabis sector; the first lender to become a private mortgage REIT; the first to be issued an FDIC warehouse line of credit; the first to get an investment grade rating; the first to issue an unsecured bond with institutional investors; the first to update our fund to a billion dollars. Amid all these firsts, we made a conscious decision not to go public. This has been one of the best decisions we’ve made and has shielded us from much of the market volatility we are seeing.

As for the broader market, we’ve seen our sponsors that are publicly traded impacted pretty significantly by the recent market dynamics. We’ve also seen flow-on effects for non-publicly traded firms. Our loan book is performing excellently, but we’re in a very challenging market for marijuana-related businesses to raise equity, making debt even more attractive. For most of our competitors, who chose to go public, they’ve been unable to raise much capital to deploy, whereas our market share is increasing and we continue to grow in this tough environment. We remain bullish on the sector in the medium/long term and are finding excellent opportunities to lend in this challenging environment.

Green: Debt on cannabis companies balance sheets have increased significantly in recent years. What is your perspective on that?

Goad: Increased access to debt capital markets is a sign of a maturing market. The U.S. cannabis sector has a great tailwind with growth of new markets, but it’s facing some significant headwinds tied to tax inefficiencies and inadequate state-level enforcement. All of these issues can be solved with political action, but so far that hasn’t happened and it’s causing pain in the industry. These industry dynamics are set against a broader macro backdrop of risk-asset repricing and increased volatility, which leads to outsized volatility in cannabis due to limited liquidity. That increased volatility has made it very challenging to raise equity in this market.

For companies that have strong assets on their balance sheet, they’re still able to access capital via the debt markets. This is creating clear winners and losers, as companies that choose to sell their real estate have significantly fewer capital raising options than those that choose to keep real estate assets on their balance sheets. Overall, this increased debt trend has been great for our business – our pipeline has increased rapidly and we’re able to lend to strong operators with solid assets at attractive rates for investors. Our fund continues to have inflows, and since we’re one of the few lenders with capital to deploy, we’re still open for business and deploying capital in this challenging environment.

Green: How does the lack of institutional investor participation in the cannabis industry affect your business? 

Goad: The current regulatory environment impacts the type of investor that comes into this space. Rather than being dominated by institutions, this sector has largely been funded by retail investors and family offices. This has created challenges in aggregating large amounts of capital, both on the operator and the debt-fund side of the business. It can lead to delays in loan closings, as it takes borrowers a longer amount of time to raise the required equity to close their transaction. As we’re seeing with our publicly traded peer group, it can also lead to lenders having trouble raising capital to deploy. As for Pelorus, we’ve been very fortunate that our length of time in the industry and track record of successfully making loans and having them repaid has set us apart in fundraising. Our decision to stay private has been a critical factor in our fundraising success as well. Overall, the lack of institutional investor participation is a double-edged sword: the lack of liquidity has caused challenges broadly, but since we’ve had significant capital to deploy, it’s created great opportunities for us to make loans with attractive risk/returns in this challenging market.

Green: What would you like to see in either state or federal legalization?

Goad: Given the stalemate in the Senate and the sharp bipartisan divide, I don’t think federal legalization will happen during this administration. That said, there are incremental actions that the government should take to strengthen the cannabis sector. First of all, the Cole Memo needs to be reinstated to add additional protections for cannabis and cannabis-related businesses. As 280E has clearly been detrimental to the overall health of the cannabis industry, we also believe the tax code should be amended, or better yet, we should address the conflict between state and federal policy. We also need to get SAFE Banking approved in order to open up the cannabis sector to credit cards and potentially open up banking to the sector in a more material way. Unfortunately, there’s a choke point in the Senate to get SAFE Banking approved, since there needs to be 60 votes to be filibuster proof. And while there is some talk of SAFE Banking passing during the lame duck session, we are not holding our breath.

Green: What trends are you following closely as we head towards the end of 2022?

Goad: The biggest trends we’re following are on the legislative front (both federally and at state level), which heavily impact revenue and net cash flow growth for the industry. We’re following emerging state markets, such as Alabama and Mississippi, as well as current medical markets poised to transition to adult use in the near term, such as Missouri. The more addressable the population, the faster the industry can grow.

We’d also like to see current legal states address the often-heavy tax burdens that have led to additional challenges for legal businesses and kept illicit markets thriving. No state got everything right at the beginning, but we’re starting to see states address some of the inequities and harmful policies now. California has made some progress in this area, however there are many issues that still need to be addressed.

Federally, 280E is the other major headwind that needs to be addressed as extremely high tax rates are one of the biggest problems for the industry. We’d really like to see that addressed, as cannabis is the only new industry, I’m aware of in the U.S. that has had such disadvantages out of the gate.

Bad Actors in CBD: How to Distinguish Quality Products From the Rest

By Joseph Dowling
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The success of reputable cannabis and CBD brands has inspired an influx of inexperienced and disreputable competitors in the market. These so-called “bad actors” in CBD advertise products that are not manufactured under current Good Manufacturing Practices (cGMP), which help to ensure that all products are consistently produced and controlled according to specified quality standards. cGMP helps guard against risks of adulteration, cross-contamination and mislabeling to guarantee product quality, safety and efficacy.

Joseph Dowling, Author & CEO of CV Sciences

CBD products without cGMP regulations are often inaccurately labeled and deceiving to consumers. In fact, in a test of over 100 CBD products available online and at retail locations, Johns Hopkins Medicine found significant evidence of inaccurate, misleading labeling of CBD content. The prevalence of such brands not only reduces consumer confidence in CBD but also limits the growth of the sector as a whole. Fortunately, CBD consumers and retailers can easily discriminate between a well-tested, reputable brand and inferior bad actors with a few straightforward, minimum requirements to look out for when selecting a product.

Why are “bad actors” a problem for consumers and the industry?

Bad actors in CBD sell products that are not produced under cGMP conditions and are typically not tested by third-party laboratories to ensure identity, purity, quality, strength and composition. This means they are not verified for contaminants, impurities, label claims and product specifications. This frequently results in misleading advertising with inaccurate levels of cannabinoids or traces of compounds not found on the label, like THC. To combat this, the FDA issues warning letters to actors that market products allegedly containing CBD—many of which are found not to contain the claimed levels of CBD and are not approved for the treatment of any medical condition. Still, bad actors manage to slip through the cracks and deceive consumers.

The structure of cannabidiol (CBD), one of 400 active compounds found in cannabis.

Bad actors that put anything in a bottle and make unsubstantiated medical claims hurt the reputable operators that strive to create safe and high-quality products. It is easy for consumers to be drawn to CBD products with big medical claims and lower prices, only to be disappointed when the product does not produce the advertised results. Inaccurately labeled products may contain unexpected levels of cannabinoids, including ingredients that consumers may not intend to ingest, like Delta-9 or Delta-8 THC. Along with unexpected levels of THC, many CBD products available now are not as pure as advertised, with one in four products going untested for contaminants like microbial content, pesticides, or heavy metals.

Further, inaccurate labeling of products and their compounds also prevents consumers from establishing a baseline impact of CBD on their bodies, leaving them vulnerable to inconsistent future experiences. Such a poor experience can turn consumers off to the category as a whole, drawing their trust away from not only the bad actors but also the reliable, reputable brands on the market. The saturation of the market with these disreputable brands delegitimizes a category that has only just begun to break down the stigmas, creating stagnation rather than growth as consumers remain wary of low-quality products.

How can consumers identify bad actors in CBD?

There are several simple ways to identify a bad actor among CBD products and make certain that both consumers and retailers purchase quality, reliable and safe brands in legitimate sales channels. To start, consumers should avoid all CBD products that are marketed with unsubstantiated medical claims. This is a significant area of abuse, as brands that relate any form of CBD product to a disease state, like cancer, should not be trusted. The science to support such medical claims has not been completed, yet, product marketing is years ahead of the evidence to support such claims. Unsupported medical claims could also mislead consumers that may need more serious medical intervention.

Just some of the many CBD products on the market today.

Additionally, consumers must review the packaging, which should include nutrition information in the form of a supplement fact label. The label should include the serving size, number of servings per container, a list of all dietary ingredients in the product and the amount per serving of each ingredient. All labels should include a net quantity of contents, lot number or batch ID, the name and address of the manufacturer, and an expiration or manufacturing date. These signs of a reputable brand are easy to look for and can save consumers from the trouble of selecting the wrong CBD product.

What to look for when selecting a CBD product

With this in mind, products from reputable, tested brands can be identified by a few key factors. Reputable CBD companies are already compliant with the FDA regulations on nutritional supplements, including a nutritional or supplement fact panel on the packaging—just like vitamins. The information in this panel should include all the active cannabinoids in the product, both per serving and package. Clear potency labeling allows consumers to confidently select products that suit their needs and understand the baseline impact of CBD concentration on their bodies, thus helping them to tailor their experience with thoughtful product selection.

Reputable brands also include a convenient QR code on the packaging, linking the product to a certificate of analysis that details the testing results to demonstrate compliance with product standards and label claims. In terms of specific ingredients, consumers should be skeptical of high concentration levels of “flavor of the month” minor cannabinoids, which are often associated with unsubstantiated medical claims. Current scientific research has set its focus on major cannabinoids like CBD and Delta-9 THC, leaving additional research necessary for understanding minor cannabinoids. Minor cannabinoids are typically included in full spectrum products at concentrations found naturally in the cannabis plant, which is a safer approach to consuming CBD until more research is completed.

Consumers should not let the existence of unreliable, untrustworthy brands curtail their confidence in the CBD sector—there are many high-quality, safe and trusted brands on the market. With a knowledgeable and discerning eye, consumers and retailers can easily select top-quality CBD products that millions of consumers have found to improve many aspects of their health and well-being. Looking ahead, clear federal regulations for CBD products that require mandatory product registration, compliance with product labeling, packaging and cGMP will be crucial in weeding out bad actors and will allow compliant companies to gain consumer trust and responsibly grow the CBD category.

Financing the Cannabis Industry Part 1: A Q&A with AFC Gamma CEO & Partner Len Tannenbaum

By Aaron Green
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Business often require outside capital to finance operating activities and to enable scaling and growth. Financing in the cannabis industry is notoriously challenging with regulatory obstacles at the local, state and federal levels. Recent market dynamics pose additional challenges for both financiers and cannabis operators.

We sat down with Len Tannenbaum, CEO & Partner of Advanced Flower Capital Gamma (AFC Gamma, NASDAQ: AFCG) to learn more about AFC Gamma and to get his perspective on recent market trends.

Aaron Green: In a nutshell, what is your investment/lending philosophy?

Len Tannenbaum: AFC Gamma is one of the largest providers of institutional loans to cannabis companies nationwide in all aspects of production: cultivation, processing, and distribution. Cannabis companies, no matter the size, traditionally lack the lending opportunities that other enterprises have available, and that’s where AFC Gamma comes in. As an institutional lender, we provide financial solutions to the cannabis industry.

AFC Gamma is a commercial mortgage REIT that provides loans to companies secured by three pillars: cash flows, licenses, and real estate. We provide term loans, draw facilities, and construction loans. Each loan is unique and tailored specifically to meet the needs of our borrowers. This unique partnership approach with our clients allows us to find solutions to help them expand and grow alongside them.

Since starting AFC Gamma, we have completed almost $500 million of transactions. We provide capital to an industry that others do not and, in turn, allow these operators to build cultivation facilities, production facilities, and dispensaries.

Green: What types of companies are you primarily financing?

Len Tannenbaum, CEO & Partner of Advanced Flower Capital Gamma

Tannenbaum: AFC Gamma seeks to work with operators, ideally in limited license states. We make loans to companies secured by three pillars: cash flows, licenses, and real estate. We tend to lend to operators in regulatory-friendly states, such as: Ohio, Pennsylvania, New York, New Jersey, Maryland, Massachusetts, Arizona, New Mexico, Missouri, Illinois, Michigan, and Nevada. Traditionally, we shy away from states like California, Washington and Oregon given our approach to lending. We have 16 borrowers in 17 states, and what we look for are companies that we can grow with over the long term.

Green: What qualities do you look for in a cannabis industry operator or operating group?

Tannenbaum: We tend to work with three different buckets of operators. You have the large publicly traded multi-state operators (MSOs) we have lent to, such as Verano. Then you have the tier right below the top tier MSOs, where you have some public enterprises like Acreage, who is one of our borrowers, and then some private companies such as Nature’s Medicine and Justice Grown. The third tier are smaller operators. They’re single or two-state operators, and we’re typically coming in to help them build out licenses that they want or help them expand within that state. That’s why state-by-state dynamics are so important to us and why we typically only lend to limited license states.

We look at portfolio diversity on a step-by-step basis rather than a borrower-by-borrower basis. We tend to focus on deals in limited license states and also deals that have real estate as collateral. We have found that REIT loans give our clients the most flexibility, and we are able to finance more companies this way.

Green: Capital market dynamics have led to significant public cannabis company revaluations in 2022. How has this affected your business?

Tannenbaum: Although capital market dynamics have made an impact on a significant number of public cannabis companies’ revaluations this year, our overall business hasn’t been affected too much and that’s because the other lending options available right now are not ideal choices for most borrowers. One of the ways a lender can achieve credit enhancements or securities is by raising capital in the public markets. When the markets are more challenging, those companies have a harder time accessing capital when they may need it most. In turn, this could cause slow growth overall, more cash conservation and it removes one of the benefits to lenders. We’d like everyone to have more robust equity from that standpoint, but the flip side is, if equity gets too high in price, those borrowers won’t come to us lenders and they’ll raise capital in the equity markets since the equity is cheap. We’re definitely conducting a lot of business because the equity market is not available to cannabis companies. If that were to change, while our loans would be theoretically safer, they would choose equity instead of debt.

Green: Debt on cannabis companies balance sheets have increased significantly in recent years. What is your perspective on that?

Tannenbaum: When equity markets were free and the valuations were high, cannabis companies raised money in the equity markets rather than take on debt. Now that the equity markets have been somewhat closed and valuations are much lower, we see their debt has increased over the past two years.

Green: How does the lack of institutional investor participation in the cannabis industry affect your business?

Tannenbaum: Right now, we are one of the biggest lenders in cannabis. Looking to the future, though, if the SAFE Banking Act passes, we could see an influx of institutional capital that would increase competition amongst cannabis-specific and mainstream lenders. From the outset, most of the competition will come from hedge funds, not big banks. This competition will drive down interest rates and attract borrowers like MSOs.

Green: What would you like to see in either state or federal legalization?

Tannenbaum: The Senate passing the SAFE Banking Act. Should this happen, lenders, including AFC Gamma, will be able to borrow cheaper, which will, in turn, allow lenders to lend cheaper. It will be a net positive for all operators. It could also be positive for lenders assuming they have the infrastructure and capabilities to scale and decrease the cost of capital once the money starts flowing and more deals are being made.

Green: What trends are you following closely as we head towards the end of 2022?

Tannenbaum: The most important trend we’re following is state by state trends. We’re excited to see new states getting their act together like New York. We’re excited about Georgia. We’re also looking forward to Missouri going rec. On the flip side, we’re also watching Virginia issue more than 400 licenses, diluting down the limited license states into basically an unlimited license state, which personally doesn’t make sense.

The other trend we’re watching across the country is cannabis prices. There is definitely a gray and legacy market that goes across border that should be enforced. That flow of cannabis product is depressing prices, especially in the unlimited license states. I believe there is a chance that trend starts reversing as many grows are now inefficient. The low end of inefficient grows are going to start closing, which may increase prices going into next year.

The Cannabis Quality Conference & Expo Brings Education, Networking to New Jersey

By Cannabis Industry Journal Staff
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PARSIPPANY, NJ, October 17-19, 2022 – The Cannabis Quality Conference & Expo (CQC) heads to New Jersey October 17-19 this year. The agenda features three tracks of educational talks, panel discussions, keynotes and breakout sessions.

At this year’s event, the conference will debut two new features of the program: Lunch & Learn sessions and Happy Hour Roundtables. Matthew Anderson, CEO of Vanguard Scientific, will sit down with two experts in cannabis law for interviews during the lunch hour:

Investigations & Enforcement: A Former Federal Prosecutor’s Perspective

  • Matthew Anderson will interview Barak Cohen, Chair of the Cannabis Industry Group at Perkins Coie, to discuss federal investigations, Justice Department prosecutions and white-collar offenses. This Lunch & Learn will take place 12:00 to 12:25 PM on Tuesday, October 18.

Compliance is Key: Best Practices for Your New Jersey Cannabis Business

  • Matthew Anderson will interview Casey Leaver, Director of Regulatory Compliance at Vicente Sederberg, to discuss compliance culture, quality controls, New Jersey regulations and more. This Lunch & Learn will take place 12:35 to 1:00 PM on Tuesday, October 18.

Following the conference agenda on Monday, October 17 and Tuesday October 18, attendees are invited to join the cocktail reception for Happy Hour Roundtables. From 4:45 to 5:45 PM, subject matter experts will be available to chat, answer questions & offer guidance on the following topics:

  • Regulatory Compliance: Jason Thomas, Precision Quality & Compliance
  • Banking, Finance & Real Estate: Steve Schain, Esq., Smart-Counsel LLC
  • Licensing: Russ Hudson & Sumer Thomas, Canna Advisors
  • Certifications & Controls: Tyler Williams, CSQ
  • Compliance Solutions: Doug Plunkett & Zach Cicconi, ProCanna
  • Standards in Cannabis: David Vaillencourt, The GMP Collective
  • Social Equity & Justice: Ernest Toney, BIPOCANN

The conference will begin with a panel discussion on The Future of East Coast Cannabis: Social Equity, Justice & Legalization. Following that will be a panel on The Standardization State of the Union: Science-Based Resources for Driving Cannabis Safety with an overview of the New Jersey cannabis marketplace to end the first day.

The second day will kick off with a Keynote titled Centering Equity in Cannabis Policy, Quality & Business with Toi Hutchinson, President & CEO at Marijuana Policy Project. Other agenda highlights include:

  • The State of the State: An Update on New Jersey Legalization by Steven M. Schain, Esquire, Attorney at Smart-Counsel, LLC
  • Tri-State Cannabis: Pro Tips for Winning Applications by Sumer Thomas, Director of Regulatory Affairs and Russ Hudson, Project Manager at Canna Advisors
  • Navigating Cannabis Testing Regulations for Multi-State Operations by Michael Kahn, President & Founder of MCR Labs
  • Keynote by Edmund DeVeaux, President of the New Jersey Cannabusiness Association
  • A Guide to Infusion Technology | Design Experiences that Inspire and Innovate with Cannabis Ingredients by Austin Stevenson, Chief Innovation Officer at Vertosa
  • Valuable Analysis Ahead of Asset Acquisition by Matthew Anderson, CEO of Vanguard Scientific

Registration options are available for in-person, virtual and hybrid attendance.

Event Hours

  • Monday, October 17: 12 pm – 6:30 pm (ET)
  • Tuesday, October 18: 8 am – 5:45 pm (ET)
  • Wednesday, October 19: 8 am – 12 pm (ET)

Cannabis industry professionals also interested in the food industry can attend the Food Safety Consortium, which begins on Wednesday, October 19 – Friday, October 21.

About Cannabis Industry Journal

Cannabis Industry Journal is a digital media community for cannabis industry professionals. We inform, educate and connect cannabis growers, extractors, processors, infused products manufacturers, dispensaries, laboratories, suppliers, vendors and regulators with original, in-depth features and reports, curated industry news and user-contributed content, and live and virtual events that offer knowledge, perspectives, strategies and resources to facilitate an informed, legalized and safe cannabis marketplace.

About the Cannabis Quality Conference & ExpoCannabis Quality Conference & Expo logo

The Cannabis Quality Conference & Expo is an educational and networking event for the cannabis industry that has cannabis safety, quality and regulatory compliance as the foundation of the educational content of the program. With a unique focus on science, technology, safety and compliance, the “CQC” enables attendees to engage in conversations that are critical for advancing careers and organizations alike. Delegates visit with exhibitors to learn about cutting-edge solutions, explore three high-level educational tracks for learning valuable industry trends, and network with industry executives to find solutions to improve quality, efficiency and cost effectiveness in the evolving cannabis industry.