Several members of SC&H Group’s Medical Cannabis Advisory Practice were in attendance for the Marijuana Business Conference & Expo in May. This national conference brought together 3,500 members of the industry, creating an environment for peers to learn more on the state of the states as medical and/or recreational legality is expanding at a rapid rate.
Several valuable and informative topics were discussed in sessions ranging from investor insights, financial planning, marketing guidelines, business risks, and software selection. Beyond the sessions the MJ Expo featured a robust exhibit floor allowing attendees to learn everything from quality of dirt, proper lighting, the genetic of seeds, and the seed to sale partners to have as your trusted advisors.
Essentially what would take months to research, was featured in a one week event. In this ever changing industry knowledge is power and vital in running your business. With so much content throughout the week we wanted to touch on some of the highlights from the conference.
- Structure of deals can take many forms so investors should be thorough in their due diligence allowing for several weeks for consideration.
- Five sectors that represent an adequate diversification strategy – retail and distribution, consumer, therapeutics, business solutions, and production.
- Investors need to try to be fully aware of the potential price collapse of cannabis when considering not only an individual company, but the groups of companies associated in one’s portfolio.
Operations and Technology
- Understand the state rules and environment. Regulations and laws can vary greatly from state to state.
- Operational efficiency is critical for success, cannabusinesses need to strategically determine software to leverage and ultimately rely on to run the business efficiently.
- Remember this is still a federally illegal industry. Business should be extremely cautious navigating state and federal laws. Beware of “creative ideas” to work around the hazards.
- Use legal and accounting professionals who are familiar with the industry and active in it.
- In addition to considerable risk there is also potential for considerable rewards. There are several parallels between the cannabis industry and the tech boom.
- Despite the scarcity of cannabis friendly banking and the dangers that typically accompany cash heavy businesses, robberies related to dispensary are relatively low.
- Dispensaries should consider cash management carefully and consider options such as time release safes.
- When cannabusinesses are navigating the tax savings space 280E is viewed as a roadblock, however there are ways around this to obtain savings.
As you know, the industry is moving rapidly – what may have applied year to year, or month to month may not apply now. The recent lawsuit threatening Maryland licenses is proof roadblocks can arise in a moment’s notice, and highlights the need for contingency planning.
Did you hear something at the conference that you would like further clarification on? Contact SC&H Group’s Medical Cannabis Advisory practice for assistance: https://www.scandh.com/contact-us/.