IgniteIt Chicago Recap: Ignition on High
Another IgniteIt Capital Conference is in the books. Kudos to Elliot Lane, Patrick Lane and team for putting on the best #cannabis event in the business.
The timing of the event was fortuitous: #Rescheduling is pending, #Trulieve recently uplisted to the NYSE and the #hemp THC ban looks like it will stick.
For once in a long time, there is reason to be optimistic about U.S. cannabis.
For those of you who did not attend or who sleepwalked through the 2 days, here are some of the noteworthy things I heard:
> The industry is turning the regulatory corner including some who think retroactive #280E relief is coming. Many #MSOs believe adult use will be included in #SIII. More clarity needs to come from the FDA, Treasury and DEA.
> Expect more #M&A (specifically small-medium firm roll ups, mergers and distressed sales) and firms to uplist to the NYSE and NASDAQ.
> U.S. #exports will commence.
> Equity #capital remains scarce while more private credit trickles in.
I also note what was not said or glossed over…
As Miles Davis said “The music is found between the notes”
> There are considerable roadblocks - #regulations, ego, cap tables & structures and valuation expectation - to deals getting done. The cannabis devil is always in the details.
> Trulieve’s less than impressive debut on NYSE. This was not unexpected but excuses still rained down from all corners.
> How tough and expensive it will be for many companies to comply legally and operationally with SIII while still putting up strong numbers.
> The poor business practices (e.g., non payment) that are clogging up commerce.
…And the strategic assumptions that drive individual thinking
Charles Dickens summed it up well 175 years ago “All other swindlers upon earth are nothing to the self-swindlers.”
> Institutional capital will flood in soon. Our version of irrational exuberance.
> There is a lot of cash and attractive stock splashing around to fuel the big deals. Vireo will be a litmus test of whether one can financially engineer big shareholder value in the face of tough operational and integration challenges.
> It will be easy and quick for U.S. producers to export THC-based flower and distillate. Reality check, it won’t be and the World’s not holding their breath waiting for most of your products.
> Some flippantly claim that 20-30% of hemp THC sales will migrate over to cannabis. We can hope but I wouldn’t bake these numbers into any forecasts.
> Post SIII, big strategics will jump back into cannabis. Not so fast. If it isn’t already in the works, you are looking at a year, minimum, for a big player.
It has been a long haul for much of this crowd. Despite the happy talk and brave faces, I detected fatigue even malaise among many of the veterans. Many will look to exit during this window of opportunity, even if does not meet their previous grandiose expectations.
Onward and upward friends.
#IgniteIt #capitalmarkets #Rescheduling #SIII #capital #Trulieve #hemp #M&A
