The ‘We Get Cannabis Email’ Post
I frequently get questions and topic suggestions from LinkedIn and my blog, the Cannabis Management Review (link below).
Here are 5 (paraphrased) questions with some pithy answers:
Q1: What is the number 1 competency every cannabis firm needs to master right now?
A1: I’ll give you two that drives efficiency, speed and strategic agility: i) a first-rate ability to execute on key projects and day-to-day activities and; ii) the will and capability to transform your business.
Q2: What do funders care most about when evaluating a cannabis investment?
A2: It depends on the investor and type of financing. Typically, equity funders care a lot about the team (and their track records), an ability to create IP or sustainable advantage and the size of the financial prize.
Debt funders pay attention to available cash flow to service their loan, reporting and securitizing their debt.
For every investor, I'll add: having solid governance mechanisms, a prudent ‘use of proceeds’ and acting trustworthy & professional.
Q3: What is the biggest cost savings and quality improvement opportunity for producers?
A3: The increased use of automation for post-harvest processing, material handling and production monitoring. Yes, many of these investments have not worked out. However, this was usually the result of poor forecasting and the lack of supporting talent.
I also see major cost savings come from the improved use of data analytics and better aligning demand and supply.
Q4: Will biosynthesis take over the production of cannabinoids?
A4: Yes, but over time and not totally. Lab produced compounds are very common in CPG and Pharma, for cost and product consistency reasons. There’s no reason why cannabis will be any different. No surprisingly, early weed adopters will be medical cannabis and edibles products.
Large-scale production of THC and other compounds will come once the cost of biosynthesis falls and volume increases. Fortunately, there will always be a market for naturally grown and organic cannabis.
Q5: When will Rescheduling and SAFER happen?
A5: I have no idea. At this point it’s a fool game to make any predictions given prior regulatory stops n’ starts and the current political climate. Once we get really close, the actual legislation can still change at the last minute due to Congressional horse trading and the impact of special interest lobbying.
Truth be told, the true financial impact of Rescheduling for MSOs is now debatable while the passing of SAFER may underwhelm in the short term due to bad economic conditions.
If you want to explore these issues further, please shoot me a message.
#MSOS #biosynthesis #SAFER #rescheduling #funding #operations #execution