My 5 New Year’s resolutions for the cannabis industry
“Change? Aren’t things bad enough as they are?” Lord Salisbury, 19th century British Prime Minister
Once a year, I take the liberty of lecturing our sector on what they need to get right in 2023. Here are 5 resolutions for creating a higher performing, more professional North American cannabis sector:
1. Accept reality
Established markets will see low growth, over supply, margin compression and expensive/scarce capital. New markets like New York will experience a bumpy first year. In this ‘new normal’, elite operational execution and financial management must be 2023 priorities. M&A should on the table but only in selected cases (buying cheap behind strong balance sheets) where you can quickly realize costs savings and revenue synergies.
2. Recognize that hope is not a strategy
The unkind reality is that SAFE, 280E and rescheduling will likely not happen in 2023. But, it never hurts to improve capabilities. Leaders should prioritize operational resilience & flexibility, leveraging data for better decision making and rebuilding battered cultures.
3. Get your governance and corporate hygiene act together, once and for all
It’s hard to attract serious money and talent when a company is run in an unprofessional manner with poor Board oversight and decision making. Its time to shun mendacious corporate behavior like embracing deceitful test results and issuing misleading investor messages.
4. Grow up
To some of you, stop with the tired ideological battles and narcissistic virtue signalling, pervasive at conferences, online and in meeting rooms. It’s distracting, corrosive and makes us all – especially the speaker – look bad.
5. Things will get better, however
Pubcos are down almost 90% from their February 2021 peak, but most sector fundamentals remain positive, and valuations eventually regress to the mean. When this happens, be wary of pump n dumping (and short selling) bankers & investors who will be looking to cash in during a market rebound or corporate up listings, if they are allowed.
A healthy, happy and prosperous 2023 to all.
#2023 #regulation #capitalmarkets #MSO #LP #growth #M&A #predictions