Funding Alternatives For Cannabis Companies Present Unique Opportunities For Investors

April 17, 2023 · Benzinga

The cannabis industry has been affected by disruptions in the banking industry and changes in funding sources.

Valley National‘s recent $72 million loan to Truly “is of particular interest, as it represents a significant move out of the shadows for banks in the cannabis industry,” Brennan Manna Diamond managing partner Stephen Lenn said at the recent Benzinga Cannabis Capital Conference.

On his part, Tyler Beuerlein, Chief Strategic Business Development Officer at Safe Harbor Financial 

SHFS-1.02%+ Free Alerts, noted that “larger financial institutions are entering the cannabis industry and this is a positive development.” Traditional banking products as crucial for the industry’s success, he says.

280E Tax Reform Is Also Essential

Travis Goad, the Managing Partner at Pelorus Equity Group, stated: “The last 12 months have been difficult, and some companies have been quick to adapt to the challenging market environment, while others have faced challenges due to their development and growth cycle.”

Additionally, Goad believes that 280e tax reform is necessary and is one of the biggest issues facing the cannabis industry. “The industry is still maturing, and as more supply comes on, the market becomes more competitive, and companies need to focus on becoming more efficient in order to turn a profit,” he said.

However, companies that outperform are those that focus on their expense lines and become efficient faster than others. Goad sees this as the next stage for the industry in order to achieve healthy cash flows.

Furthermore, Jack Mascone, Head of Debt Capital Markets at Seaport Global Securities LLC, noted that some borrowers may have difficulty navigating the legal and regulatory landscape, which could make it hard for them to overcome their financial difficulties. However, “there is a willingness among syndicated groups (groups of investors who pool their resources to invest in a single project or venture) to work with these borrowers,” he said.

Greenthumb Industries Inc 

GTBIF board member Wendy Berger discussed failures and business validations as opportunities for acquisition.

Although she noted that the acquisition’s decision should be based on careful consideration and due diligence, “this is a really good time to to be an investor in this industry.”

Berger also emphasized the importance of making traditional sources of capital available to small businesses, women, and minorities in the country, believing that the focus should be on entrepreneurship and small businesses.

Moreover, the panel focused on considering community banks for lending opportunities for small businesses, citing the case of New York’s recreational market.

Despite the difficulties, they showed optimism about the industry’s future and predict continued growth “as more states come online.” (Full Story)

In category:Finance
Next Post

Is There a Solution to the Cash Crunch?

While the past few years have been no picnic for companies struggling to turn a profit, it looks like 2023 could be the most challenging year yet. A triple threat of high-interest debts, inflation, and overdue taxes is looming over some entities,…
Previous Post

Cannabis retail sales to surpass $33.5B in 2023, topping chocolate, eggs and craft beer

Chris Morris Thu, April 13, 2023 at 12:08 AM GMT+7·2 min read Jeenah Moon/Bloomberg via Getty Images As more and more states make medical and recreational cannabis legal, the drug’s retail sales numbers are hitting new heights. More from Fortune: 5 side hustles where you…
Random Post

'They're not fairy tale magic shaman potions.' Meet the wounded warriors who want red state Republicans to let psilocybin mushrooms turn the tide on veteran suicides

Military veterans trying to overcome the horrors of war are increasingly finding themselves in an unlikely position — persuading Republican politicians to legalize the healing power of ancient psychedelic plants. spoke with former Marines, Navy Seals and others left traumatized by America's…
Random Post

Bill to Add Autism and PTSD to Arizona Medical Cannabis Program Passes Committee

A bill proposed in Arizona would allow patients with autism and post-traumatic stress disorder (PTSD) to access medical cannabis products in the state, the AZ Mirror reports. The measure passed the House Health and Human Services Committee 7-2 on Monday.  Earlier this month, the…
Random Post

Kansas Senators Shelve Medical Marijuana Legalization Bill After Hearing From Law Enforcement Opponents

Kansas senators have shelved a bill to legalize medical marijuana following a hearing that featured multiple opponents, including state law enforcement representatives. Members of the Senate Federal and State Affairs Committee voted on Thursday to table the legislation, which the panel itself…
Random Post

New York Sued Over Social Equity Cannabis Retail Licensing Plan

A group that includes some of New York’s medical cannabis companies is suing the state over its plan to issue adult-use retail cannabis licenses to social equity applicants before opening applications to all businesses, reports. The complaint alleges unconstitutional overreach and…