The mood was upbeat at the Benzinga Cannabis Capital Conference in Chicago as the industry’s power players converged on the Magnificent Mile Marriott Hotel for two days to reconnect and reflect on what felt like the lowest year legal cannabis has endured to date.
The industry’s optimism initially sprung from the Department of Health and Human Services’ August 30 recommendation that the DEA reschedule cannabis, igniting some hope that our latest bear run is behind us.
During the conference, the mood was buoyed further by positive news from Washington: For the first time, the Senate took action on cannabis banking reform.
“We were very fortunate because this year the conference started on the same day the Senate Banking Committee passed the SAFER Banking Act through markup,” said Elliot Lane, vice president of events and head of Benzinga’s cannabis division. “This really influenced the energy at the event.”
The publicly traded multistate operators (MSOs), several of which are based in Chicago, were the clearest benefactors of the federal movements. All saw their stocks rise precipitously, and the mood was a cautious jubilance as many felt that we may have lifted ourselves up from the bottom. And given the strong showing of MSOs at the conference, this optimism was palpable.
The conference has carved out an important niche as the place where money meets in cannabis. Many of the industry’s biggest lenders, investors, venture capitalists, and investment bankers were in attendance, and were taking meetings in anticipation of a potential windfall in fresh capital entering the sector.
Benzinga takes great care with its programming, and the conference’s well-attended panels typically tackle the industry’s biggest challenges and opportunities.
Alexa Alianiello of X (formerly Twitter) presented a keynote about how the platform is expanding its offerings to the cannabis industry.
Terry Stanley of Adweek was joined by Jesse Channon of the newly rebranded The Cannabist Company (formerly Columbia Care) to discuss the path forward for the company following a failed merger with Cresco.
Seth Yakatan, Laurie Holcomb of Gold Flora and Ed Schmults of StateHouse were part of an urgent panel titled “The State of California Retail.” Yakatan, an entrepreneur and financier who is one of the cannabis industry’s leading voices on LinkedIn, was transparent about the state’s retail debt problems but defiantly bullish about its long-term prospects.
“California is the biggest market in cannabis, and it will be the biggest market even after your children have children,” he told the audience. “There are so many great opportunities if you know where to look for them.”
TerrAscend’s Executive Chairman Jason Wild discussed the company’s uplisting to the Toronto Stock Exchange. This is a salient and timely subject, as Curaleaf recently announced that it, too, would be exploring uplisting, and you can be sure other public MSOs are eyeing the opportunity as well.
And mg Magazine hosted a lively and necessary panel about how retailers can avoid price compression. Panelists included Dutchie Chief Technology Officer Chris Ostrowski, Lilach Mazor Power of Mazor Collective, and Justin Elias of popular Michigan retailer PUFF.
Where the conference really shines is in facilitating dealmaking. The attendees, by and large, are decision-makers at their companies, and no other cannabis industry conference has managed to concentrate this influence as well as Benzinga.
“This was our first time here, and we got a lot from the experience,” said Andrew Leber, founder and chief executive officer at StrainBrain, which has developed an artificially intelligent virtual budtender. “We had a lot of face time with potential investors, partners and retailers, all of whom were very much in the mood to do business.”
It seems the consolidation frenzy that was touted late last year is beginning to materialize. The prolonged distress among the market’s smaller operators is creating a lot of opportunity for mergers and acquisitions as many start looking for the exit and larger players get back on the front foot.
“There are more than a handful of companies with cash on hand that are returning to acquisition mode,” said Spring Leaf Capital founder and principal David Kram. “This is potentially a sign that sentiment is indeed turning around and we are entering into the next bull market cycle in cannabis. Only time will tell, but I’m cautiously optimistic.” (Full Story)