Benzinga Chicago Cannabis Capital Conference Highlights Women, Minorities

Social equity, preferably known as equity empowerment, was the name of the game at the 15th iteration of the Benzinga Cannabis Capital Conference (BCCC), which took place at the Palmer House Hilton in Chicago on September 13 and 14.  Adult-use cannabis consumption, possession and sales of cannabis products are legal in the State of Illinois.

Through the BCCC series, Benzinga “strives to put a spotlight on the conversation surrounding social equity via panel discussions with organizations that are combating inequality in the cannabis industry, individuals who have been adversely affected by the War on Drugs, and policymakers who are leading the charge on writing legislation to undo the impacts of prohibition,” according to the company event’s website.

​Keeping in line with that mission, Benzinga offer​ed​ discounted conference tickets to owners of marijuana businesses​ that​ have received state certification for their social equity initiatives.

Women + Minorities

Additionally, Benzinga offers scholarships for women and minority-owned businesses. To that end, the company partnered with organizations, including WomenGrow, and Minorities for Medical Marijuana, to showcase their associates on Benzinga’s conference stages and in the exhibit hall.

One of those presenters included Amber Senter of Supernova Women. Despite suffering from Lupus, Senter leads the charge via her 501(c)3 nonprofit organization to empower BIWOC to become self-sufficient shareholders in the cannabis and natural plant medicine space through education, advocacy, and network building.

In the expo hall, female-represented brands were out in full force, including Chicago Norml’s Edi Moore, My Bud Vase’s Doreen Sullivan, MtoM’s Christine Wilson, Illinois Equity Staffing’s Shawnee Williams, HerHighness’ Allison Krongard and Laura Eisman, Budwell’s Sara Hussain, and CannaBellaLux’s Tiffany Woodman, among others.

Women-led brands who pitched from the stage included House of Puff’s Kristina Lopez Adduci, Black Buddah’s Roz McCarthy and 40Tons’s Loriel Alegrete.

In The Ring

Apart from the strong representation of female brands, Benzinga also welcomed more than 150 speakers from top-performing cannabis companies. Three executives of Tyson 2.0, including the legendary heavyweight boxing champion himself, landed on the roster. While retired from the sport, Mike Tyson is now a regular on the cannabis conference tour. During his press conference in the expo hall with former iconic WWE superstar Rick Flair, the latter said, “I love being relevant; and being in marijuana keeps you relevant.”

Mike Tyson, Rick Flair at Benzinga Cannabis Capital Conference

Benzinga’s VP of Events, Elliot Lane, is pleased with the level of participation from all avenues.

“Chicago was our 15th iteration of the Cannabis Capital Conference and second this year,” he said. “The turnout of industry executives, investors and media was overwhelmingly positive, and the response from our attendees has been glowing.”

The Envelope Please…

Of special note were the first annual Benzinga Awards. “Finding the best of the best in cannabis is no easy feat, but someone has to do it. So, we assembled a panel of high-level judges to help us determine who are the people and organizations driving the cannabis industry forward,” said Chief Zinger Jason Raznick.

According to Benzinga, the awards celebrate new, creative, innovative and outstanding people, solutions and companies in the cannabis industry.

Benzinga Cannabis Awards

The winners of this year’s Benzinga Awards are as follows:

  • MOST IMPACTFUL CANNABIS EXECUTIVE OF THE YEAR: Ben Kovler, CEO, founder and chairman of Green Thumb Industries 
  • “BRETT ROPER AWARD” FOR LIFETIME ACHIEVEMENT: Nancy Whiteman, founder and CEO of Wana Brands
  • FRIEND OF THE INDUSTRY AWARD: Rep. David Joyce (R) of Ohio told the audience: “God bless you all for taking on this fight. I am going to keep doing my best to help you.”
  • CANNABIS ADVOCATE OF THE YEAR: Mary Bailey of the Last Prisoner Project
  • SOCIAL EQUITY AWARD: Desiree Perez of the The Parent Company
  • BEST CANNABIS LEADER UNDER 40: Luke Anderson, co-founder of Cann
  • ACHIEVEMENT IN BUILDING TRUST: Emily Paxhia, co-founder of Poseidon Investment
  • MOST EFFECTIVE CELEBRITY CANNABIS BRAND: Cookies, founded by Berner
  • CANNABIS INDUSTRY ASSOCIATION OF THE YEAR: US Cannabis Council
  • CANNABIS LIFESTYLE REPORTER OF THE YEAR: Jon Cappetta, High Times Magazine
  • CANNABIS POLICY REPORTER OF THE YEAR: Kyle Jaeger, Marijuana Moment
  • CANNABIS FINANCE REPORTER OF THE YEAR: Tim Seymour, CNBC
  • CANNABIS BUSINESS REPORTER OF THE YEAR: Jeremy Berke, Insider
  • BEST EUROPEAN CANNABIS COMPANY: TILRAY Brands
  • BEST LATIN AMERICAN CANNABIS COMPANY: Khiron Life Sciences
  • BEST CANADIAN CANNABIS COMPANY: Village Farms
  • HOTTEST CANNABIS TECHNOLOGY: Weedmaps
  • BEST CANNABIS LAW FIRM: Foley Hoag, LLP
  • BEST CANNABIS ACCOUNTING FIRM: Crowe LLP
  • BEST INVESTMENT RESEARCH: Scott Greiper, Viridian Capital
  • BEST CANNABIS INDUSTRY ANALYST: Matt Bottomley, Cannacord
  • BEST USE OF CAPITAL: Jushi Holdings
  • MOST INNOVATIVE CANNABIS LENDER: Pelorus Equity Group
  • MOST INNOVATIVE CANNABIS ETF: YOLO – AdvisorShares
  • CANNABIS INVESTORS AWARD – INSTITUTIONAL: Ricky Sandler, Eminence Capital
  • CANNABIS INVESTORS AWARD – PRIVATE EQUITY / VC: Mitch Baruchowitz, Merida Capital
  • BEST CANNABIS RETAIL EXPANSION STRATEGY: Trulieve
  • BEST CANNABIS PARTNERSHIP: TILT, which brought a true social equity partnership to the Shinnecock Indian Nation
  • BEST USE OF CAPITAL: Jushi Holdings
  • BEST M&A DEAL: Flora Growth
  • MOST ENVIRONMENTALLY FRIENDLY OPERATOR: Geomat Patented Water Recovery Systems
  • MOST INNOVATIVE CANNABIS BRAND: Miss Grass
  • MOST INNOVATIVE CANNABIS SMALL BUSINESS: House of Saka – Cannabis-infused wines from Napa Valley

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Benzinga Chicago Cannabis Capital Conference Wows Participants

Social equity, preferably known as equity empowerment, was the name of the game at the 15th iteration of the Benzinga Cannabis Capital Conference (BCCC), which took place at the Palmer House Hilton in Chicago on September 13 and 14.  Adult-use cannabis consumption, possession and sales of cannabis products are legal in the State of Illinois.

Through the BCCC series, Benzinga “strives to put a spotlight on the conversation surrounding social equity via panel discussions with organizations that are combating inequality in the cannabis industry, individuals who have been adversely affected by the War on Drugs, and policymakers who are leading the charge on writing legislation to undo the impacts of prohibition,” according to the company event’s website.

​Keeping in line with that mission, Benzinga offer​ed​ discounted conference tickets to owners of marijuana businesses​ that​ have received state certification for their social equity initiatives.

Women, Minorities, More

Additionally, Benzinga offers scholarships for women and minority-owned businesses. To that end, the company partnered with organizations, including WomenGrow, and Minorities for Medical Marijuana, to showcase their associates on Benzinga’s conference stages and in the exhibit hall.

One of those presenters included Amber Senter of Supernova Women. Despite suffering from Lupus, Senter leads the charge via her 501(c)3 nonprofit organization to empower BIWOC to become self-sufficient shareholders in the cannabis and natural plant medicine space through education, advocacy, and network building.

In the expo hall, female-represented brands were out in full force, including Chicago Norml’s Edi Moore, My Bud Vase’s Doreen Sullivan, MtoM’s Christine Wilson, Illinois Equity Staffing’s Shawnee Williams, HerHighness’ Allison Krongard and Laura Eisman, Budwell’s Sara Hussain, and CannaBellaLux’s Tiffany Woodman, among others.

Women-led brands who pitched from the stage included House of Puff’s Kristina Lopez Adduci, Black Buddah’s Roz McCarthy and 40Tons’s Loriel Alegrete.

Another Tyson KO

Apart from the strong representation of female brands, Benzinga also welcomed more than 150 speakers from top-performing cannabis companies. Three executives of Tyson 2.0, including the legendary heavyweight boxing champion himself, landed on the roster. While retired from the sport, Tyson is now a regular on the cannabis conference tour. During his press conference in the expo hall with former iconic WWE superstar Rick Flair, the latter said, “I love being relevant; and being in marijuana keeps you relevant.”

Benzinga’s VP of Events, Elliot Lane, is pleased with the level of participation from all avenues.

“Chicago was our 15th iteration of the Cannabis Capital Conference and second this year,” he said. “The turnout of industry executives, investors and media was overwhelmingly positive, and the response from our attendees has been glowing.”

The Envelope Please…

Of special note were the first annual Benzinga Awards. “Finding the best of the best in cannabis is no easy feat, but someone has to do it. So, we assembled a panel of high-level judges to help us determine who are the people and organizations driving the cannabis industry forward,” said Chief Zinger Jason Raznick.

According to Benzinga, the awards celebrate new, creative, innovative and outstanding people, solutions and companies in the cannabis industry.

The winners of this year’s Benzinga Awards are as follows:

  • MOST IMPACTFUL CANNABIS EXECUTIVE OF THE YEAR: Ben Kovler, CEO, founder and chairman of Green Thumb Industries 
  • “BRETT ROPER AWARD” FOR LIFETIME ACHIEVEMENT: Nancy Whiteman, founder and CEO of Wana Brands
  • FRIEND OF THE INDUSTRY AWARD: Rep. David Joyce (R) of Ohio told the audience: “God bless you all for taking on this fight. I am going to keep doing my best to help you.”
  • CANNABIS ADVOCATE OF THE YEAR: Mary Bailey of the Last Prisoner Project
  • SOCIAL EQUITY AWARD: Desiree Perez of the The Parent Company
  • BEST CANNABIS LEADER UNDER 40: Luke Anderson, co-founder of Cann
  • ACHIEVEMENT IN BUILDING TRUST: Emily Paxhia, co-founder of Poseidon Investment
  • MOST EFFECTIVE CELEBRITY CANNABIS BRAND: Cookies, founded by Berner
  • CANNABIS INDUSTRY ASSOCIATION OF THE YEAR: US Cannabis Council
  • CANNABIS LIFESTYLE REPORTER OF THE YEAR: Jon Cappetta, High Times Magazine
  • CANNABIS POLICY REPORTER OF THE YEAR: Kyle Jaeger, Marijuana Moment
  • CANNABIS FINANCE REPORTER OF THE YEAR: Tim Seymour, CNBC
  • CANNABIS BUSINESS REPORTER OF THE YEAR: Jeremy Berke, Insider
  • BEST EUROPEAN CANNABIS COMPANY: TILRAY Brands
  • BEST LATIN AMERICAN CANNABIS COMPANY: Khiron Life Sciences
  • BEST CANADIAN CANNABIS COMPANY: Village Farms
  • HOTTEST CANNABIS TECHNOLOGY: Weedmaps
  • BEST CANNABIS LAW FIRM: Foley Hoag, LLP
  • BEST CANNABIS ACCOUNTING FIRM: Crowe LLP
  • BEST INVESTMENT RESEARCH: Scott Greiper, Viridian Capital
  • BEST CANNABIS INDUSTRY ANALYST: Matt Bottomley, Cannacord
  • BEST USE OF CAPITAL: Jushi Holdings
  • MOST INNOVATIVE CANNABIS LENDER: Pelorus Equity Group
  • MOST INNOVATIVE CANNABIS ETF: YOLO – AdvisorShares
  • CANNABIS INVESTORS AWARD – INSTITUTIONAL: Ricky Sandler, Eminence Capital
  • CANNABIS INVESTORS AWARD – PRIVATE EQUITY / VC: Mitch Baruchowitz, Merida Capital
  • BEST CANNABIS RETAIL EXPANSION STRATEGY: Trulieve
  • BEST CANNABIS PARTNERSHIP: TILT, which brought a true social equity partnership to the Shinnecock Indian Nation
  • MOST INNOVATIVE CANNABIS SMALL BUSINESS: House of Saka – Cannabis-infused wines from Napa Valley

The post Benzinga Chicago Cannabis Capital Conference Wows Participants appeared first on Cannabis Now.

Wall Street High

CANNABIS STOCKS ARE FAST BECOMING A FIXTURE IN investor portfolios, but is now the right time to get involved as so much uncertainty swirls? The past two years have been volatile for every market sector, thanks to COVID-19 above all else. The emerging pot market has admirably contended with the circumstances, federal legalization and other factors unique to this industry. Despite the substantial hurdles, cannabis is thriving. In 2021, global sales topped $37.4 billion, according to Prohibition Partners. 

The growing sector’s strong performances netted savvy early investors worthwhile returns. However, some sources caution that the climate of today’s market may not allow for such returns and that those investing today should be prepared for the long haul if they want to see a profit.

Publicly traded cannabis brands are growing in presence on various global exchanges. For multiple reasons, cannabis companies often list on international stock markets, such as the Canadian Securities Exchange. Another popular choice is over the counter (OTC) trading, which uses a broker network rather than a traditional central exchange. 

Leading causes for shying away from the US giants—New York Stock Exchange and NASDAQ—often include worries over American federal cannabis regulations and mandatory share minimum criteria that companies may struggle to meet at this time. However, plant-touching and ancillary brands have found some success in this country.

The array of listing options leaves brands and investors with various options. Going off market cap, Green Chip Stocks founder Jeff Siegel said investors have eight billion-dollar-plus companies to choose from as of January 2022: Curaleaf, Green Thumb Industries, Trulieve, Canopy Growth, Tilray, Cronos Group, Sundial and Aurora.

Siegel said investors might want to look beyond the market cap when considering stocks. Sources listed dozens of smaller cap options that may prove beneficial to an investor’s portfolio, with share prices often in single-digit sums. 

Jumping into cannabis with singular stocks may not be ideal for those just learning about the market or those who don’t have the time to keep up with the constant fluctuations of the market. Javier Hasse, the managing director for Benzinga Cannabis and co-founder of Spanish language cannabis site El Planteo, discussed how exchange-traded funds (ETFs) could be a viable investment that requires less sweat equity. When?

Tilray Inc., a major Canadian cannabis grower, celebrates the company’s IPO at the Nasdaq stock exchange.

“Investing in stocks is already hard on its own,” Hasse said. “Investing in a market that’s still nascent and as volatile as cannabis is particularly hard.”

Poseidon Asset Management co-founder and managing director Morgan Paxhia also touched on ETFs, noting their often-correlated activity, allowing investors to choose depending on their underlying investment strategies and other holdings. Some current industry-leading ETFs include AdvisorShares Pure US Cannabis ETF (MSOS), The Cannabis ETF (THCX), AdvisorShares Pure Cannabis ETF (YOLO) and Amplify Seymour Cannabis ETF (CNBS).

“We do believe over time that performance among the ETFs could meaningfully separate as we believe that the cannabis rising tide will lift seaworthy boats,” Paxhia said. 

In late 2021, Poseidon launched their ETF with AdvisorShares under the name AdvisorShares Poseidon Dynamic Cannabis ETF. 

Cannabis saw a boom in 2019 and 2020 as much of the US market remained open after receiving essential status, leading to continued sales success. The spike helped the industry recover from a bear market that had dampened previous high expectations and canceled many previously announced mergers and acquisitions.

Some entities didn’t perform well, especially those based in tourist locations, or medical ventures that saw intake numbers shrivel. That said, most US-based companies did perform admirably against the circumstances.

The pandemic and the market’s ongoing maturity left Hasse torn on market movements. “It’s still pretty early to tell how cannabis stocks as a group move in relation to markets,” he said, adding that he hasn’t seen direct correlations to economic cycles.

Others were more certain about market movements. Debra Borchardt, co-founder and executive editor of online cannabis stock publication, Green Market Report, noted that cannabis stocks typically “tend to trade as a group despite some companies performing better than others.” 

Jacqueline Bennett, managing partner at Highlands Venture Partners, offered a similar take. “Maybe during earnings there’ll be some type of reaction that’s aligned with the performance of the underlying operation, but most of the time you’re seeing the entire index moving in the same direction,” she said. Bennett noted that the movement is indicative of economic and other macro conditions affecting the cannabis market. 

The circumstances can make share price valuations frustrating for investors. “The company may be reporting record sales numbers, but then experience a sell-off as other poorly performing companies bring the group down,” Borchardt said. She added that “stock jocks,” or investors that trade for profit rather than underlying company ownership, can also harm stocks.

Like the pandemic, US regulations loom overhead, stunting the market’s true potential for growth and return on investment. Under Presidents Trump and Biden, reform made little progress, save for the advancement of the MORE and SAFE Banking Acts in Congress. While their progress is symbolic of reform’s rise, it won’t do anything to improve banking or investment opportunities at this time. Analysts don’t expect reform to occur under the current Congress or President Biden.

“Despite this being a somewhat bipartisan effort and having constituent approval, Congress just hasn’t been able to make headway and possibly won’t in the near future, as other more pressing issues have had priority,” Borchardt said. 

She said the ongoing regulations hurt businesses and companies struggle to find eCommerce vendors and secure banking accounts. “Plus, if cannabis companies had access to the big banks, they could also have access to the major US stock exchanges,” he said. 

The issues extend to trading as well. In November 2021, JPMorgan restricted brokerage clients from buying certain cannabis stocks, noting potential bank losses from private fund collapses. Despite ongoing industry restrictions and federal regulations, optimism remains high for the long-term.

“While it’s difficult to quantify the momentum—or lack thereof—with any particular piece of legislation, we fundamentally believe that cannabis legalization efforts, license issuance and consumption itself will continue to increase and support the industry overall as cannabis markets grow and scale,” said Arden Lee, CFO of WM Technology, the operator of Weedmaps, a cannabis stock trading on the NASDAQ as a non-plant touching venture. 

All things considered; Bennett may have summed up the growth sector best when she said cannabis stocks are “anything but stable” at this time. 

Investments are all about timing. Some early investors have already seen returns. Siegel took pride in his clients scoring big on early investments in Canopy Growth, Organigram and Aphria. However, he said those days are now gone and that investors may have to hang around to see positive results.

“If you got in at the top, you’ll be licking your wounds for a while,” he said, adding that safer players such as Curaleaf may produce some gains in 2022 for investors.

Paxhia believes the market is facing a difficult period where capital isn’t flowing in like it was just a few years ago. The setback is coupled with substantial valuation compression. Today, cannabis companies compete for investor attention against other intriguing sectors ranging from tech to crypto and meta. Still, he notes that market prospects look bright. 

“Long term, we still see a lot of opportunity, but this is coming from a firm that has been investing in the space for more than eight years,” Paxhia said.

WM Technology’s Lee offered a similar opinion on the market’s future, noting that few if any “truly high-functioning cannabis markets” exist in the US. “For example, there are more licensed cannabis businesses in Oklahoma than in California, yet California has four times the population and has legal cannabis,” Lee said. He also sees a bright future down the line. “This opportunity will be unlocked with continued license issuance and new market openings—which are questions of when, not if.”

With the market struggling, now may be a smart time to get in. For now, “The prices have fallen so low, this might be a good time to invest,” Borchardt said. She also noted ETFs as a potential pick.

Even with one’s financial ducks in a row, the ever-evolving cannabis market can still trip up investors while it evolves and solidifies into the giant market we know is coming. 

“Be mindful of how much capital you feel comfortable putting at risk here, as it is risky and volatile,” Paxhia said.

This story was originally published in the print edition of Cannabis Now.

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How Did ScottsMiracle-Gro Become a Cannabis Power Player?

Cannabis legalization continues to make headway in the US and beyond, creating economic opportunities for companies in a host of industries. Much of the investment in the cannabis economy has been put into new companies that do the bulk of marijuana cultivation, processing and sales—some of which have grown into large operations spanning numerous states. But increasingly, more mature companies are taking the dive into cannabis, often through ancillary businesses that serve the needs of plant-touching operations. An early adopter of this business strategy is ScottsMiracle-Gro, a 154-year-old firm that is a staple of American garden centers.

Targeting the Pot Market

PHOTO Courtesy of ScottsMiracle-Gro

ScottsMiracle-Gro is probably best known for the fertilizer and weed killer combo found in the lawn spreaders of millions of suburban dads and the plant food in the watering cans owned by a similar number of grandmothers across the country. But over the past decade, the company has been taking a deep dive into cannabis, with its subsidiary Hawthorne Gardening Company picking up leaders in marijuana grow lights, nutrients, hydroponic supplies and more. And recently, Scotts has been lobbying for the legalization of marijuana at the federal level. This is a prospect that Chris Hagedorn, executive vice president of ScottsMiracle-Gro and president of the Hawthorne division, says is inevitable.

“It’s our belief, and this isn’t a grand revelation by any stretch: Federal legalization is obviously going to happen; the question is when and how,” Hagedorn told CNN in a recent interview. “When it does, what are the most valuable assets going to be in a post-legalization world? I think anybody who thinks about it for a while says consumer-facing brands [that make and sell cannabis products] will be the most valuable.”

Back in 2011, ScottsMiracle-Gro CEO Jim Hagedorn, Chris Hagedorn’s father, told the Wall Street Journal that he saw opportunities for the company in the emerging legal cannabis sector.

“I want to target the pot market,” he said. “There’s no good reason we haven’t.”

As a publicly traded company, ScottsMiracle-Gro wasn’t able to delve into the heart of legal cannabis with operations in marijuana cultivation, processing or sales because of the federal illegality of the plant. Instead, the company went shopping for companies serving the burgeoning market. In 2013, the company began its new venture with a $4.5 million investment in the Colorado-based indoor gardening products company AeroGrow.

“We see long-term opportunity in using AeroGrow’s technology to grow the indoor gardening category, as well as in expanding the ‘seed pod’ technology outdoors,” Jim Gimeson, then senior vice president and general manager of gardens at ScottsMiracle-Gro, said in a statement. “In addition, we see an opportunity for these products to perform well in international markets where indoor plants are very popular with consumers.”

Since then, ScottsMiracle-Gro’s jump into the cannabis industry has continued with notable ancillary companies, including nutrient and indoor gardening supply firm General Hydroponics, grow light manufacture Gavita and nutrients maker Botanicare all becoming part of the Hawthorne family of brands. Scotts’ focus on companies that offer products attractive to commercial cultivators and home growers positioned it well to survive the pandemic, a time when garden centers and home improvement retailers saw strong sales.

“If people are stuck at home, what are they going to do? They smoke a joint and go garden,” Chris Hagedorn said. “And that’s pretty much what happened, so the consumer business [of Scotts] saw a huge boost; we did as well.”

In it for the Long Haul

Last year, the Hawthorne division’s sales amounted to $1.4 billion, 30% of Scotts’ total sales. In 2019, Hawthorne was responsible for a fifth of ScottsMiracle-Gro’s sales, rising to a 25% share of the company’s revenue in 2020. But supply chain issues and other economic factors have led to a slump at Hawthorne, with sales dropping 44% to $202.6 million during the second quarter of this year.

“The current slowdown is really the result of a perfect storm that’s hitting growers hard,” Chris Hagedorn said. “There is oversupply in key markets such as California and Oklahoma, and inflation is causing increases in the cost of raw materials and services. We expect the industry to bounce back as these key markets work through the excess supply and as new markets come online in the Northeast over the next 12 to 18 months.”

The drop in sales has led ScottsMiracle-Gro to cut its guidance for full-year revenue and adjusted earnings. The company said it expected US consumer sales to decline between 4% and 6%, with Hawthorne sales expected to drop 40% to 45% for the year ending Sept. 30.

“The revised guidance we’re providing is our best estimate of where things currently stand in a fluid and rapidly evolving market,” Jim Hagedorn said last week. “While we are striving to deliver the best outcome for fiscal 2022, our focus is shifting toward the future.”

ScottsMiracle-Gro is also now testing the waters for an eventual plunge into the plant-touching side of the cannabis industry. In March, RIV Capital Inc, a cannabis investment firm backed in part by Scotts’ subsidiary The Hawthorne Collective, had entered an agreement to acquire New York-based licensed cannabis cultivator and retailer Etain.

Andrew Carter, an investment analyst who follows ScottsMiracle-Gro for Stifel, said he believes the company is well-positioned for the long term.

“Absent some kind of change at the company, I’d argue that they’re going to be a big player in cannabis, somehow, some way,” Carter said.

Chris Hagedorn says Hawthorne will continue its expansion into the cannabis industry.

“I hope we’ll be among the leaders,” he said. “If not, I’ll be disappointed in myself.”

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Benzinga Cannabis Conference in Miami Draws Big Investors 

Last week’s Benzinga Cannabis Capital Markets Conference in Miami kicked off on 4/20 bringing together a venerable cornucopia of the cannabis industry. Cannabis Now was on hand to connect with some of the industry’s most illustrious power players to discover where the market is heading. Two such thought leaders, Mitch Baruchowitz of Merida Capital Holdings and Troy Datcher of The Parent Company, shared some insights on what makes their successful companies tick, and why they chose to attend the Benzinga conference.  

Baruchowitz’s slide presentation at the iconic Fontainebleau Miami Beach described using data to create a disruptive thesis. He elucidated Merida’s investment thesis as picking regions rather than companies. For 20 minutes, Baruchowitz went on to discuss data and disruption, explaining that the firm’s prediction model has helped them solidify their place as one of the cannabis industry’s leading investment groups.

“We find companies that we believe fit the areas that we think are disproportionately large, and I think that’s resonated in the last few years with people who want to hear how we keep ending up in the right place,” he said. 

Mitchell Baruchowitz of Merida Capital Partners gives a presentation at Benzinga, North America’s leading cannabis investment conference. PHOTO by Cannabis Now

Baruchowitz says Merida Capital uses its Twitter account as a prediction engine, and that the data he’s talking about isn’t that data. Rather, he refers to predictive economic data as “the future that is going to arrive.” 

“That’s on a trajectory,” Baruchowitz said. “We did make predictions four years ago about the projections. We said, ‘Projections were people being revised upwards based on state adoption.’ So, we nailed that because I think most people are projecting $28 billion for 2025. We’re now at approximately $40-$42 billion. Every year its applications keep going up. The data we’re using primarily is more like thin-sliced, precise data that tells us something notable about something, and then we do the work.” 

Baruchowitz isn’t a big fan of the “predictors.” He says he believes that they’ve been wildly wrong because of cannabis’ newness; and it’s impossible to be correct. 

“Merida doesn’t use that type of forward-looking projection,” Baruchowitz said. “I think that it’s effortless for people to project the blank slate of Colombia, for example. There’s been a new blank slate every year, such as in Lesotho. There’s always a shiny new object. Being in the cannabis space for a long time and having many employees means that you don’t have to go down that road and run into a brick wall when you find out the projections are off.

Baruchowitz insists that Merida is more about discrete data packets. He believes the company analyzes things that no one else does. Most of his investors are high net-worth individuals or entrepreneurs who want sophisticated exposure to cannabis on the investment side. 

California-based, consumer-focused cannabis business, The Parent Company (TPC), potentially represents such an investment. TPC’s company portfolio includes trusted consumer packaged goods (CPG) brands, such as Caliva and Jay-Z’s more recent Monogram. The company’s newly minted CEO, Troy Datcher, believes the brands will be the basis of the cannabis industry’s future.

Datcher attended the Benzinga conference to network with investors as well as regulators. He believes the conference presents an excellent opportunity for him to meet other industry entrepreneurs. 

“I’d been in the cannabis industry for 150 days as of the beginning of Benzinga last week. So, attending the conference was a great opportunity for me to mix and mingle with the folks that are a part of the industry and can provide some insight on the challenges they’re facing and how they’re tackling some of those challenges,” Datcher said, adding that the Benzinga conference provides TPC with a platform for sharing their own story.

“Hopefully that story resonates with either someone who wants to be a member of our team, or to analysts who are there covering companies like ours, as well as investors,” he said. 

Datcher also credits Benzinga for being in the right place at the right time to spend some quality face time with lawmakers, including Ohio Congressman Joyce and South Carolina’s Nancy Mace

“It was great and informative to hear where our latest legislators are in terms of supporting the industry,” he said.  

Datcher cites the variety and diversity of the speakers as another draw of the Benzinga conference. 

“I think the content and the types of folks who showcased were incredibly diverse and impressive. From a single-state operator (SSO) to multi-state operators (MSO) to folks on the front end of innovation for the industry, Benzinga creates an atmosphere where everyone wants to participate in the conversation,” Datcher said. “That’s great for someone like me, who again, is looking to absorb as much as possible and create a great curve for learning.”

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Cannabis Investor Sees Strength in Numbers

In 2016, the NFL Players’ Association reported that the average career lasts 3.3 years. Of those players, 78% would lose all their career earnings within three years of leaving the league. Matthew Nordgren would play just two years as a backup quarterback, but he wouldn’t go broke post-retirement. Instead, as the founder of venture capital (VC) cannabis investing firm Arcadian Capital, Nordgren and his team are helping grow the industry’s ancillary, or non-plant touching side, of the market.

Since launching in December 2017, Arcadian Capital has amassed a range of significant cannabis industry investments. The firm’s investment process is billed as being “predictable, scalable and profitable.” The company has had activity in numerous ancillary marijuana sectors, including tech services, media, e-commerce, consumer product platforms, agricultural tech (agtech), life sciences and supply chain, among others.

“We’ve had a lot of success, and there’s more work to do,” Nordgren said, adding that Arcadian’s leadership, comprised of professionals with institutional and family office investor backgrounds, is “desperately looking for quality” and often aligns with plant medicine and innovators advancing the space.

Nordgren says his unique experience performing at a high level as both an athlete and investor has given him a valuable perspective for overseeing Arcadian Capital’s growth.

With previous success in sports and entertainment VC firms, Nordgren may have the pedigree to do the same in cannabis. While possible, the firm’s founder doesn’t seem to harbor a desire to be seen as the best. Instead, his focus is on building up the emerging market in a communal fashion.

Going From Gridiron to Cannabis Investing

Since his college days, Nordgren knew he wasn’t destined for a Tom Brady-esque career in the NFL. He always focused on a future away from football, earning his bachelor’s in government and business from the University of Texas at Austin in 2006. While at UT, Nordgren spent five years watching and managing the game from the sidelines. He’d dabble in the pros afterward, playing stints with the Detroit Lions in 2006 and the Philadelphia Eagles in 2006 and 2007. Never starting a college or pro career game helped shape his perspective and business acumen. 

“You learn servant leadership when that happens,” he said of his career, laughing. “I think that makes for a great investor.”

From 2006 to 2017, Nordgren worked with several management funds, consulting firms and capital partners, as well as with other offices in Texas and California. He honed his investing expertise along the way, focusing his attention on sports and media assets. His first cannabis investment opportunity was with the cannabis publication High Times. With a foot in the industry, he began attending cannabis events to conduct due diligence. The research revealed just how ample an opportunity cannabis could be, all without ever handling pot.

“We started to see if there was an opportunity to invest in the growth of this industry by not touching the plant,” he said.

Ancillary Solutions Providers Can Sustain

Nordgren’s findings proved vital in convincing investor bases to join the then-new cannabis industry. By investing in ancillary companies, investors could see potential gains from the nascent cannabis market without the risks attached to cultivators, dispensaries, processors or other pipeline components.

This discovery led to early investments in companies the firm saw as the market’s solutions providers. Arcadian Capital’s early investments included data firm BDS Analytics (now BDSA) and cannabis software developer Baker Technology (now part of Tilt Holdings Inc.).

State-by-state regulations are another concern for plant-touching ventures. With each state allowed to make its own rules, cannabis-handling companies are subject to various regulations. US brands also need to obtain licenses to operate in each state. With ancillary products, companies don’t face the same level of regulatory scrutiny, or the need for multiple state permits. The lessened risk appeals to investors like Nordgren, who prefer companies that serve the market on a national level.

“They’re not dependent on one state or another,” he said.

In addition to providing national solutions, Arcadian sought out qualified leaders when choosing its initial early-stage investments. An emphasis was placed on companies led by passionate, high-character entrepreneurs with a history of creating solutions in other industries.

“I think character and passion are a big piece of that success because when you’re investing early, you don’t know as much,” Nordgren said.

Those intangible assets would prove critical in the cannabis space, where regulations are constantly changing. Companies had to provide solutions and show that they could do so for the long, winding haul of cannabis reform. According to Arcadian Capital’s website, companies must meet the following five-point criteria to qualify for their portfolio”

  • An ancillary cannabis brand with a proven business model
  • At or near the breakeven with plans to achieve profitability
  • A proven management team with equity leadership
  • A commitment to environmental, social and governance responsibilities
  • A proven market leader within a specific vertical

The criteria remain the same, but investments now often go to companies in later rounds of fundraising, a natural step as the market matures.

“Now that we’re late stage, it’s a little bit more of a science than an art, but the early stage, there’s still some art to it,” Nordgren said of the firm’s slightly changing methodology.

Since launching in 2017, Arcadian Capital has continued to use its criteria to find various emerging market leaders. Standout investments include the now-Nasdaq-listed enterprise software Akerna; dispensary tech Enlighten; and supply chain brand KushCo.

The firm’s ancillary market focus means that, unlike plant-touching ventures, Arcadian isn’t as invested in the plant’s legalization from a business standpoint. National legalization isn’t critical to the firm’s future growth, but instead, seeing annual revenue continuing to grow 25% to 30% is. Nordgren was adamant in his support for improved plant-based medicine access through federal reform. When it comes to cannabis reform regulations, Nordgren says he’d rather see the correct parameters implemented than have legalization rushed across the finish line.

“I think we’re more in favor of it being done right than a rushed job,” he said, noting the importance of diverse representation and environmental parameters being part of reform.

All Hands On Deck

Seeking out emerging sectors and their solutions providers may seem like a strategy to gain a competitive edge. While undoubtedly true, Nordgren says Arcadian Capital’s approach isn’t about becoming the top firm. Rather, the goal is about collective market success for investment firms and the companies involved.

Rather than viewing other firms as “the competition,” Nordgren said Arcadian considers each participant a member of the cannabis community. Together, they can achieve a more prosperous industry.

“With strength in numbers, we accomplish the goal, and that’s to have these products available to more people,” he said.

Accessibility includes access to athletes, a well-known segment of the medical cannabis community. Medical cannabis has shown the potential to help athletes address a range of grueling mental and physical injuries. Nordgren is a board director for the group Athletes for Care (A4C), a non-profit advocating for further research, education and compassion around athlete health issues.

Cannabis serves as a central component in A4C discussions. In January 2022, Nordgren sat down with retired NFL athlete, advocate and cannabis entrepreneur Ricky Williams to discuss natural wellness and their forays into cannabis.

Nordgren added that while he does fit into the organization as an athlete, he believes his value at A4C comes as an investor hoping to help grow companies and plant access. He cited Arcadian’s “influence as a firm, as an investor in having the ability to create impact in that way” as his primary contribution.

The post Cannabis Investor Sees Strength in Numbers appeared first on Cannabis Now.

Breaking: The Arcview Group Welcomes New CEO

The Arcview Group has a new leader at the helm. The influential provider of consulting services, market research and networking opportunities in the cannabis and hemp industries today announced the appointment of Jeffrey Finkle to the position of Chief Executive Officer. He succeeds Kim Kovacs, who held the position of CEO since the beginning of 2019. 

Finkle has far-reaching experience in investment management, as well as business development and operations. He co-founded The Arcview Collective Fund in 2018 and most recently acted as CEO of Arcview Ventures. His transition plan will allow his work with both entities to continue.

Finkle was chosen to lead The Arcview Group through their next phase of growth thanks to his “proven track record of developing diverse and high-performing teams” according to the announcement. Kovacs, the firm’s first female CEO, will remain on the Board of Directors. She will be joining Santa Fe Farms, a current Arcview client, as Chief Strategy Officer.

Kim Kovacs and Jason White in Los Angeles in February 2020.

“I’m thrilled and proud with the work I was able to lead and be part of during a truly pivotal time in Arcview’s history and the world’s,” Kovacs told Cannabis Now. “Arcview is well poised for more decades of service and support of the cannabis and hemp industries. I look forward to continuing our work together on the Arcview Board of Directors and as a client at my new post with Santa Fe Farms.” 

As CEO of Arcview, Finkle will oversee high-level operations related to marketing, finance and corporate development, as well as key programs such as Arcview Access. He will also supervise primary service subsidiaries Arcview Capital, Arcview Ventures, and Arcview Management Consulting, which includes Arcview Market Research. Finkle credited Kovacs with helping the firm grow to a one-stop-shop for rapidly expanding industries and setting the stage for the period of expansion.

“The Arcview Group sits at the forefront of the most exciting new industry opportunities in our lifetime,” Finkle said in the press release. “Thanks to the efforts of Kim Kovacs and the entire team at The Arcview Group, our company has evolved its business to lead the emerging cannabis, industrial hemp and psychedelics markets as a turnkey services firm. I look forward to working with our industry-leading team to build on the great foundation that has been created over the last decade through events, investor memberships, consulting, research, and industry advocacy.” 

The announcement comes as The Arcview Group prepares for explosive growth within cannabis and psychedelics, as well as a return to in-person events— a cornerstone of the firm’s success. Arcview is promising much to come in the months ahead, including more ways for entrepreneurs and investors to connect, learn and thrive.

The post Breaking: The Arcview Group Welcomes New CEO appeared first on Cannabis Now.

Chinese Cultivation, U.K. Medical Cannabis, Canada 2.0, and more – The CBD Business Weekly

In case you missed this week’s newsletter, here’s a quick look at what happened. 

In this week’s edition, we’re taking a look at what country is poised to be a global leader in cannabis cultivation… spoiler alert: it’s China. Also, why was the U.K.’s medical cannabis program such an epic failure? And will a surge of new Canadian cannabis products help boost the bearish market? All that and more in this week’s CBD Business Weekly Newsletter.

Enjoy!

FEATURED STORY: Future Low-Cost Cannabis Cultivation Leader Will Be China

cannabis china

China will emerge as the cannabis cultivating super power producing flower for as little a 10 cents a gram, a leading producer believes. Speaking at the Cannabis Investor Forum in the City of London Oliver Zugel, Executive Chairman and co-founder of Colombian producer Foliumed, elaborated on how he sees the cultivation industry developing in China.

“Hemp outdoor cultivation in the U.K. is a short-lived business with just one crop a year, in Colombia we can get up to five harvests a year but the Chinese will be beating us on price within a few years. Cultivating under lights is not sustainable, the carbon footprint of such operations is horrible, something like three per cent of all California’s electricity is taken by the cannabis industry.”

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One Year On And U.K. Medical Cannabis Regime Is Failing

medical cannabis u.k.

One year on from the introduction of medical cannabis in the U.K., the overwhelming consensus is that it has been a massive failure in need of a complete overhaul. As things stand there is little chance of this coming from within the U.K. medical establishment so the change will need to come from elsewhere. 

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Will Canada 2.0 Help Stop The Cannabis Rot?

recreational canada

It’s one year since recreational cannabis was legalized in Canada and the anniversary has been marked by introduction of a new range of cannabis products including; edibles, drinks and vapes. It will be a while before any go on sale – early December is predicted as they have to be individually approved by Health Canada. The market could be worth almost $3 billion a year, reports Health Europa.

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“Avoid Investing In Cannabis Cultivation Companies,” Experts Say

cannabis investors

Alexej Pikovsky, of London firm Augmentum Partners, says there is 47 times more flower in inventory, or in the ground, than there are sales. Speaking at the Cannabis Investors Forum in London he went on to say that, “We have seen some 150 licenses approved in Portugal and there is going to be massive drop in flower prices – so, for investors it’s not really the place to be.”

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