Over the past 6 months, I received these 7 (paraphrased) questions:

1️⃣ Why don’t the articles mention the companies you work?

A good, trusted #consultant always maintain strict client confidentiality. Many clients generally don’t want their ‘secret sauce’ advertised nor should they - unless they want the publicity.

2️⃣ Do you use AI to write your articles?

No. My pieces are all formulated and hand crafted by me. I do employ #AI to edit a few words of content to meet LinkedIn’s character limits, and of course, for basic research.

3️⃣ Why don’t you charge for your helpful content?

Thank you for the compliment and belief that my content is worth paying for.

I agree. In fact, I have had several readers pledge money. In the future, I plan on charging a modest subscription fee, but there will still be free content.

4️⃣ Why isn’t more of your content related to issues of the day?

I am not a journalist, so I am not obliged to comment on every sector development or issue. My day job (fractional leadership, consulting) is the focus of my professional efforts. In a few cases, my knowledge of an issue (e.g., the Hemp THC ban) is insufficient to credibly comment. Finally, I sometimes have client conflicts which prevent me from expressing an opinion.

There are hundreds of articles in CMR’s free library: Here are some of the topics:

✔️ What is the best go-to-market #strategy by market?

✔️ Which statistical and mathematical tools can boost your decision making and financial modelling prowess?

✔️ How do you differentiate a #brand in a crowded marketplace?

✔️ What is the best way to execute painless #change?

✔️ Where does AI work well in cannabis?

5️⃣ Can you write more about the legacy market?

I would like to. That world is important and fascinating. However, it is also a blind spot in my industry and personal experience. My focus are the legal North American and global market and the companies that compete in them.

6️⃣ Do you use ‘fancy’ words on purpose?

Ouch, no. I write the way I write and am a big reader of what some would consider highbrow content. Luckily, I’ve cultivated a large vocabulary and been exposed to many great examples of the written word. Regardless of my reasons, learning new words never hurt anyone.

7️⃣ Why did you delete my comment?

I believe in a free exchange of ideas and humour, except where the comment is:

❌ Offensive or unprofessional

❌ A sales pitch for the commenter’s services

Not familiar with the best cannabis newsletter in the world, go to Substack and search: Cannabis Management Review

🚀 CMR is free to subscribe. Now go level up your cannabis #management game.

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#management #bestpractices #newsletter

💗 Many grizzled cannabis leaders are eagerly anticipating the arrival of investment funds with their badly needed affirmation and capital.

Thanks to #Rescheduling, improved financial results and #uplisting, some well-known #investment funds (e.g., Citadel, Nomura, Cantor Fitzgerald) have cautiously started to invest in cannabis firms.

🥂 This portends the arrival of more activist equity investors from Venture Capital and Private Equity. Our industry will embrace these developments.

⚠️ Managers and founders, however, should be under no illusions about what taking money from activist funds means for them and the company, especially when financial expectations are not met.

Unless the leaders are strong operators and can maintain control of the Board, change will come - it’s just a question of when.

🫡 Understand that the ‘Golden Rule’ is the modus operandi of the clubby PE and VC world.

Consider this fictitious but plausible scenario with some funds

🥗 The salad days

The investment is made.

Everyone is gung-ho and seemingly aligned

Cash is liberally deployed on aggressive growth strategies.

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🚧 Hiccups arrive

After 9-12 months, below expectation financial results come in, or the leadership and Board have not been in sync.

At the instigation of the fund, the Board quietly agrees the CEO must go. A recruiting process kicks off.

The founder/CEO is replaced with the ambitious NewGuy (CEO 2). He’s a friend of the PE or VC Managing Director or the leader of one of their portfolio companies. The cannabis founder gets a board seat or advisory role plus a golden parachute as a consolation prize. However, no one listens to him anymore.

📉 Fortunes do not improve

CEO 2 blames the talent pool in the business.

Key people leave or are replaced. CFO 2 from a Big Pharma/CPG pubco joins the firm.

After 12 months, the Board swaps the 2nd CEO for CEO 3, another ambitious guy.

He blames the market and regulations.

The core issues are not recognized or understood.

The Board and Management keeps doubling down on what always has been done.

The CEO, CFO and CMO do not spend much time at the facilities, listening to suppliers, or talking to consumers & budtenders.

Politicking is rampant. More people leave/replaced.

😱 Panic sets in

The Board installs the 4th CEO 7 months later.

Problems begin to spiral. Cash becomes scarce. Leadership hubris and lack of institutional knowledge preclude questioning assumptions. For example, is this really a CPG business?

A third, more operations-focused CFO is hired.

☠️ Denouement

After 9 months, the Board determines the problems are terminal.

Almost all the senior leaders are pushed out.

In comes the turnaround specialist.

Liquidation time.

Finis

I help leadership teams deal with industry consolidation and avoid this death spiral.

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#capital #private equity #venturecapital #governance #Boards

🚀 First, the global medical #cannabis market (ex. North America) is big, coming in around USD 3-3.5B in sales. It is poised to grow 4X over the next 5 years.

Growth will be driven by new market openings (e.g., France) plus continued expansion in #Germany, Brazil, Poland, #Australia and the #UK.

🏢 Second, the DEA has indicated they will grant export permits to compliant firms under #SIII. Glass House Brands Inc. (and others) have signalled their intent to sell products in Europe. Curaleaf is already there and putting up strong numbers. They are also looking to acquire Aurora Cannabis Inc. to support their international business.

Meanwhile, successful Canadian exporters are not resting on their laurels, including leveraging new EU #GMP facilities and ownership stakes in resellers.

I see 3 broad market entry strategies for would-be #exporters, with sample pros & cons:

1️⃣ Export only

Pros: quickest time to revenue, lowest risk, a ‘walk before you run’ approach

Cons: undifferentiated products will be challenged to break in, expect regulatory hassle and weak market power vs resellers

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2️⃣ Build local infrastructure/JV with partner

Pros: control your own supply chain, learn from the locals, limit risk

Cons: can be time consuming, there will be management & culture hiccups, JV pickings may be slim

3️⃣ Acquire a domestic producer

Pros: instant capacity, most margin & control, plant yourself behind tariff/regulatory walls

Cons: requires lots of capital, risky bet for small-medium firms, targeting & courtship takes time

Michael Sassano knows cannabis from both sides of the Atlantic. He is the founder and CEO of one of Europe’s premier medical cannabis companies, SOMAÍ Pharmaceuticals:

“For any US MSO and Canadian LP it is best to stick to Germany and UK as a starter kit, not just because they are the larger and faster growing markets with most upside, but also, they are less strict pharmaceutical markets with extensive English spoken throughout the two countries as well as an understandable regime of business for foreign operators.

Since all companies are not alike, choosing your future parter and/or target acquisition is about culture and ability to traverse complicated country by country regulatory frameworks, so starting with these simpler markets and moving to more complex pharmaceutical markets like France is a learning curve.”

🔬 To choose the right strategy, firms need to perform a comprehensive assessment of each potential market including competitors, patient access, market dynamics (e.g., pricing), and regulations.

⚠️ Rome wasn’t built in a day. Be realistic about your capabilities and commitment. Much can go sideways on the regulatory and supply chain front. And don’t underestimate those pesky GMP requirements.

If you are serious about exporting, let’s get serious. DM me.

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#exporting #GlassHouseBrands #EU #Curaleaf #SomaiPharmaceuticals #trade #EUGMP #AuroraCannabis #globalmarket

💡 However, ‘can’ support is very different than ‘will’ support.

➡️ Two major shifts need to happen for the #banking doors to fling wide open.

1️⃣ Banks decide to enter the space

Fact is, banks sitting on the sidelines today will not start throwing money at businesses with #SIII.

For one thing, they haven’t been sitting around waiting for us. Bankers are a cautious lot who are misinformed on weed.

From the get-go, management plus their Boards must decide they want to join the cannabis space. This will come down to potential fees (investment banking, lending, cash management) versus the cost, risk and hassle of doing business in our space.

It won’t be a simple or quick calculation.

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Commercial banks make money by not losing it. They also pursue different market strategies and don’t automatically do business with every vertical. This is particularly germane in sectors like agriculture, food and cannabis where you have regulated and perishable products.

Furthermore, lots of internal work needs to be done. Various teams - risk management, compliance, AML and business development – must be deployed. They must figure out how they will serve this new industry, while minimizing business & reputational risk.

All of this takes time and knowledge.

This is where we come in. Cannabis firms will need to educate the bankers around #regulations, market development etc., plus mitigate that #stigma thing.

2️⃣ Banks find profitable, low risk clients

This is not as simple as it sounds. Big banks make their fees on #lending and #capital markets fees. Most cannabis companies are not big or profitable enough to move this needle.

Secondly, firms won’t be considered if they don’t have a solid balance sheet, healthy cash flows, and securitizable assets.

🇨🇦 The Canadian Case

Despite legalization in 2018, not every bank lends to cannabis nor are they forced to. In fact, I would estimate only half of the top 6 banks seriously engage with LPs right now.

This gap matters. In 2025, the 6 banks represented 78% of all business loans and 95% of all domestic debt capital markets underwritings.

If you are being banked, you will be kept on a short lease.

‼️ The last word goes to Peter Su, who heads up specialty banking for First Central Savings Bank:

“I have presented cannabis banking in front of many bank boards. You know what’s the most common question I get? “Does the money smell?”... So yes, there’s a stigma, even in banking. If you can get past the stigma, the rest is just banking. And so, your central point here is poignant; banks are just businesses too. When will banks bank cannabis? When they can make money doing it. The question is: can they?”

I help cannabis businesses optimize their capital stack and run a tight financial ship.

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#banking #capitalmarkets #lending #Rescheduling #SIII #loans #M&A

📈 When you get it right, the ROI is very good, and transformative in an enterprise-wide roll out. Even modest, individual-focused efforts can yield impressive time savings and decision-making support.

I’ve seen AI deliver compelling value in these vital #cannabis use cases:

aligning #production to demand

#marketing plan optimization

#inventory management

monitoring #operations

#sales management

market intel

🤔 Once you decide to embark on your AI journey, how do you answer the classic question: Build vs Buy?

The complexity of the cannabis space and nature of AI tools complicates matters:

FOMO is pervasive

Cannabis is an intricate yet dynamic industry. Operators and retailers are frequently very busy and understaffed. The businesses typically have immature IT systems, processes etc.

Basic AI tools have a low, upfront cost and are easy to use. Vibe coding is fun especially for non-programmers. As such, many leaders believe they can build enterprise-grade solutions.

⚠️ Yet, the path is never simple as the hype suggests. Most big AI projects regardless of the sector have not delivered on their goals. As with other new technologies, AI can be a powerful solution in search of a proven use case.

🚧 Managers also need to contend with major opportunity costs. Small to medium cannabis firms already grapple with other priorities, scarce capital and limited resources.

There is no simple answer to the Build vs Buy question.

First off, think and learn.

➡️ Every one of my AI projects is preceded by a proper business case, including best practices scan:

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Here are some of my lessons:

> If you build,

In general, homemade tech solutions are not ideal for businesses smaller than 25 employees or $5M in revenue.

Deploying AI tools is not the best use of a non-IT leader’s time, no matter how motivated they are.

The cost of tokens can quickly get out of hand especially when operations folks seem eager to spend more time building than benefitting.

> If you buy,

Be careful. Many IT providers and agencies are just rebranding with shiny AI signs. Quality, experience and fees are all over the place.

Most purchased solutions and vendors lack critical cannabis industry knowledge as well as essential MCPs and APIs to key data providers.

Data security and privacy matter. You must understand how the vendor is handling your data.

You must also consider:

Quality: How accurate and reliable must the outputs be?

Governance Who should oversee AI?

Morale: What is the impact on the staff?

Infrastructure: Is my IT, knowledge and processes optimized to leverage AI?

Regardless of the approach,

1️⃣ Think strategically AND tactically

2️⃣ Do your homework

3️⃣ Begin & learn with low-risk, short task applications like content creation, report building and integrating/analyzing data sets.

Don’t get left behind. Let’s chat!

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#AI #ROI #technology #IT #lessons

💡 The hospitality sector is a font of great lessons for operators.

Both industries face margin pressures and differentiation challenges. Their consumers have fickle tastes and a plethora of purchase options (including home production). Like cannabis, eating out is embedded in our culture and social life.

📈 When it comes to successfully building a brand and consumer experience plus scaling a business, there are few better cases to learn from than Din Tai Fung.

DTF is a very successful family-run Chinese restaurant chain generating over $411M in revenues. They own/operate a total of 23 restaurants across 6 states (plus one in BC). I have been to 3 of their locations in Los Angeles, New York and Las Vegas. They specialize in handmade dumplings but offer a full range of unique and savory dishes.

🏅 DTF may be the most profitable restaurant chain by location on earth. For perspective, one DTF outlet outsells 4 Chick fil-As and 7 McDonalds.

You would be hard pressed to find a more inspiring origin story. In a nutshell, DTF started out in Taipei 66 years ago as a cooking oil business, which eventually pivoted into a restaurant. The owner immigrated to the US, opening his first restaurant in 2000 in Arcadia California.

Let’s face it, the U.S. wasn’t waiting for another Chinese restaurant. But this one is different.

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Here are 5 germane DTF learnings for cannabis producers and retailers:

1️⃣ You don’t need to be fancy. No expensive steak or cocktails on this menu. Just humble, reasonably priced and consistently-delivered tasty food. Shareable plates encourage camaraderie plus you end up ordering and trying more dishes.

2️⃣ Exacting operational standards yield the ideal preparation time and taste profile. The mainstay Xiao (Sha) long bao dumpling weighs exactly 21 grams and has been folded 18 times during prep. There are no compromises.

3️⃣ Staff training is strategic. A high proportion of revenues is invested into training. It takes up to one year - with no cutting corners - to train a chef to make a dumpling at the target throughput (18 per minute).

4️⃣ Turn your process into the brand promise. When patrons line up, they can look through a glass window and see the dumplings being made by hand, the kitchen’s level of cleanliness etc. These visuals are also very impactful on social media.

5️⃣ Scarcity creates demand. The long lines, slow location roll out and limited seating all foster pent up demand, curiosity and strong word of mouth effects. As a result, DTF doesn’t need to spend much on advertising and promotion.

If you are serious about profitable, defensible and scalable growth, I can help.

Let’s talk.

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#strategy #Dintaifung #restaurants #bestpractices #marketing #consumerexperience #operations #brand

As reported in Cannabis Equipment News, government investigators in Mendocino County have publicly documented “patterns of labor exploitation associated with illegal marijuana grows, particularly in remote locations where vulnerable workers may be isolated, controlled or threatened.”

These practices occur across the state, including #Humboldt and San Mateo counties.

Here’s some data for perspective.

➡️ Over half of California’s 880K farmworkers are undocumented. Cannabis employs ~10% of the total of both these numbers.

➡️ A UCLA Labour Center survey of 1,111 cannabis workers found 63% experienced wage theft and 27% of women reported sexual harassment. There were also examples of trafficking, debt bondage, child labor and retaliation but the survey did not provide statistically reliable incidence rates.

My take:

1️⃣ Basic morality > everything.

America is not a Third World nation. Exploitative #labour practices cannot be tolerated.

But it’s also a business issue.

2️⃣ Operational #Risk

The perpetrators are an obvious ‘heat score’ for ICE and local police.

3️⃣ Hypocrisy

This is not a good look for an industry that prides itself on social justice. Do we need to give prohibitionists another excuse to make our lives tougher?

Our justification for lower tax rates also rings hollow when bad operators profit off of exploitation.

4️⃣ Self-defeating

Worker abuse gives unions a strong justification to organize more of the industry.

Banks, lenders and investors consider forced labour a major #ESG fail.

Using vulnerable, transient workers is not a strategy for building a sustainable business.

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💡 Authorities can crack down on illegal operators, reduce taxes & regulations to entice them into the legal market and enforce workplace standards but I doubt there is a permanent solution given political and economic realities:

✅ California cannabis production has an upward trajectory. Producers need staff but American-born workers don’t want farm jobs.

✅ Illegal immigration will never go away. Approx. 300M poor people live south of the US southern border. And you can’t firewall California. Let’s see what happens when the Texas cannabis market opens.

🛑 For management, the lesson is simple: labour exploitation is not just a moral failure. It creates legal, regulatory, reputational and capital market risk.

The last word goes to Luna Stower: “I’ve worked in Cali cannabiz over 20 years, from legacy grow culture into the commercially regulated industry, and have seen how fast folks confuse being licensed with being ethical.

‘Undocumented’ workers are doing some of the hardest, riskiest jobs... with the least protections.

When “good margins” come from workers being scared to report wage theft, unsafe conditions, harassment/abuse, we have a serious problem.

A license doesn’t make exploitation any more ethical; it just makes it state approved.”

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#California #workers #forcedlabour #risk #cultivation #Humboldt #undocumented #farms

Weed firms have lofty goals like slashing #costs, ratcheting up #productivity and driving meaningful #product differentiation.

All too often their efforts don’t deliver the goods.

One root cause is how managers approach tough business #problems. Leaders will task a department to address a complicated problem but then limit their mandate, tools and scope of work.

Inadequate problem solving is a recipe for weak financial returns (versus potential) as well higher #risk to the enterprise (e.g., rash layoffs trigger an exit of institutional knowledge).

Pencil sharpening is a good analogy for these linear mandates. The first few turns of the sharpener does a solid job but then the effort yields diminishing returns, plus the lead eventually snaps.

There’s a better way to tackle complex problems and develop winning strategies. It’s called Systems Thinking.

System thinking is a simple yet powerful concept. The management version considers the entire business (including its interactions with outsiders). The goal is to diagnose/solve visible and latent problems across departments & business units.

A ST-based approach seems obvious, but it is not. Most companies default to linear problem-solving methods (if any). Furthermore, large firms are compartmentalized with different strategies, cultures and metrics.

#Cannabis is a terrific proving ground for ST given our complicated operating models, blurred accountabilities & responsibilities and evolving structures.

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There is a lot to unpack with ST. My approach boils down to 5 stages:

1️⃣ Identify the type of business system you are in

2️⃣ Deconstruct the system into parts (e.g., processes, assets, people)

3️⃣ Understand how the parts relate to each other (including incentives)

4️⃣ Find the negative, repeating patterns

5️⃣ Fix the highest-impact patterns.

An ST case study will help

My client was a large industrial products company struggling to optimizing the flow of long lead time raw materials and other inputs. Demand for their 16K SKUs was uncertain. The firm suffered from mediocre customer service levels, excessively high OpEx and low production flexibility.

Standard fixes couldn’t move the financial needle in such a complex environment. The fixes were also controversial; they offloaded costs & risks from #operations to other departments.

Our methodology reframed the #production issues into a system problem. We analyzed the business as a living, fluid organism with feedback loops. This Gestalt approach engaged suppliers, customers and resellers around their needs, capabilities & dependencies, broke down data silos and illuminated all individual & departmental biases and incentives.

Our unique analytical findings led to practical, firm-wide, fully aligned action plans.

I help teams use ST to solve their toughest strategic, cost & operational problems. Let’s talk.

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#systemsthinking #operations #production #costs #problemsolving

Still, this question matters.

⚠️ Over the next 12 months, the fortunes of many cannabis businesses will depend on whether their employees, especially the most productive and knowledgeable ones, stay and contribute or exit the industry.

When I pose the question to workers, I hear a compelling industry value proposition.

Specifically, they invoke a passion for the plant, weed #culture, ease of industry entry and the opportunity to be part of the birth of a huge sector.

For many cannabis workers, cognitive psychology underpins their views:

People experience cognitive dissonance, sunk cost bias or learned helplessness. Many also don’t know any better i.e. they’ve never worked anywhere else so have nothing to compare cannabis to.

However, when I drill down it is not all ‘happy talk’. Many #workers see their and the industry’s realities.

Cannabis…

✔️ Pays less than other verticals for comparable roles

✔️ Is consolidating, which means tight budgets and more layoffs

✔️ Features limited professional development

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✔️ Will see AI-triggered job losses

✔️ Is a magnet for unscrupulous and unprofessional business practices

An unhappy workforce has serious consequences:

🛑 Low employee #engagement hurts decision making, #productivity and morale, and drives #turnover

🛑 Turnover leads to headcount gaps, a loss of important institutional knowledge, and high recruiting costs

🛑 Stressed-out workers are often not healthy people.

#Management has a vested interest in ensuring good #employees stay for the right reasons - and are contributing to their company’s success.

Fundamentally, happy personnel are productive, innovative and reliable.

To achieve this state, managers must…

1️⃣ Undertake a paradigm shift. If they think along these lines, ‘employees are resources’ it’s time to switch gears. Employees are humans.

2️⃣ Ask workers what they are thinking - and then listen to them. Surveys are helpful but 1:1s are better

3️⃣ Recognize that passion only goes so far. Few can afford to pay the financial and emotional ‘tax’ of working in the legal cannabis space forever.

4️⃣ Understand what other, similar firms are paying for comparable roles. If you pay peanuts, you get monkeys. Staff who feel financially exploited will leave for greener pastures.

5️⃣ Try to address some of their needs. Remove the stupid irritants and pick the low hanging fruit. Examples could be publishing clarity-enhancing org charts, undertaking regular performance reviews and developing employee manuals.

6️⃣ Make a sincere, long-term effort. One pizza party won’t turn things around

My fractional & consulting supports helps organizations boost employee engagement and create powerful organizational designs. Let’s talk.

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#employeeengagement #culture #turnover#compensation #pay #productivity

Early results are sobering. As of 7/31, GLAS and TRLV were down approx. 22% and 11%, respectively, from their opening-day prices.

This should not surprise anyone familiar with Wall Street. I predicted this outcome last month, as did several industry CEOs privately.

Both are good companies, so what happened?

Many naively assumed that #uplisting - and eventually #rescheduling - would automatically trigger a re-rating and unleash a wave of retail and institutional #investment.

It didn’t.

The uplistings arrived unexpectedly and just before the summer recess, leaving many #investors, wealth managers and banks unprepared.

WS was not ready for cannabis and, for the most part, remains unaware or unconvinced of our investability.

More importantly, investor demand must be kindled. After more than 5 years of depressed #valuations and #stigma, cannabis is no longer a familiar investment story. Many investors need to be educated about the sector, its regulations and the long-term opportunity.

Uplisting is just the start. Firms must build demand for their shares especially from institutions if they are going to boost share #prices and #liquidity.

That starts with strong numbers AND a revamped #IR function.

Investor Relations 2.0 in action:

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1. Treat uplisting as a standing start

Most cannabis companies have underinvested in IR for years. Success now requires a sustained executive ‘ground game’, proper spending and disciplined fund targeting. ‘Spray and pray’ is not a strategy.

2. Expect to educate

Cannabis remains an unfamiliar investment class in most institutions. Uplisted firms must clearly explain new #regulations, competitive positioning, operational nuances and the industry’s long-term investment case.

3. Refresh the investment thesis

Your story must be differentiated, institution-grade and investable. Governance, capital allocation and ESG will be on the agendas of many funds. At the same time, you will need to address the sector’s challenges like slowing growth, margin compression and weak ROIC.

WS rewards clarity and predictability. SIII (when it comes) is an important catalyst but will likely be perceived as a double versus a legalization home run - which is what most investors really want to see.

As for re-rating, I am hopeful for some #MSOs but am also mindful of what acclaimed fund manager Milton Berg observed:

“There’s no inherent reason for a stock to trade at its intrinsic value. A stock can be undervalued today, and it can be undervalued forever. And a stock can be overvalued today, and it can be overvalued forever. Intrinsic value is a mere technical indicator.”

Markets do not reward companies simply because they become eligible to be owned. They reward companies that create sustained demand for their shares.

I can help build & execute your IR 2.0. DM me.

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#uplisting #Trulieve #GlassHouse #NYSE #rerating #investorrelations #WallStreet #investors #shareprices

Today, Canada’s federal government deserves some credit. They will be making life easier and less costly for exporting LPs while helping them boost competitiveness versus emerging rivals.

As part of their new ‘Reducing Red Tape’ initiative, the government has instituted the following 3 reforms:

1️⃣ Import permits are now 12 months

Under the previous system, import permits were generally valid for a maximum of 6 months. For countries like Germany, this meant importers often needed multiple permit renewals for long-term supply agreements.

2️⃣ Canada’s export permits can now match the foreign import permit.

Previously, Canadian export permits and foreign import permits did not always expire on the same dates. For example, Australia issues an import permit valid for 11 months. Canada issues an export permit valid for 6 months. Halfway through the contract, the LP would need a new Canadian permit along with additional compliance review and new paperwork.

3️⃣ Finally, the revised guidance clarified several operational points that matter to exporters around the ending of permits and the number required per shipment (each shipment still needs a separate permit).

Note, the amendments do not open Canada to commercial recreational cannabis imports.

Yes, these are modest changes. But they do have a business impact and symbolic value:

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Business Benefits

✔️ Reduces exporter administrative, brokerage and compliance costs & hassles. For a company exporting $40M annually, these savings could reach several hundred thousand dollars per year.

✔️ By minimizing supply interruptions and aligning permits, LP export volumes could increase +3-5% in the next couple of years through enabling more stable supply arrangements and tighter reseller relationships.

✔️ Provides greater certainty in production and inventory planning.

✔️ Helps facilitate/buttress LP market share against other foreign suppliers, including the U.S. if and when they begin exporting.

Symbolic Value

🏅 For the first time, the government is publicly acknowledging with deeds that cannabis exports matter.

🏅 These changes are another (albeit modest) step by the government to alleviate the cannabis regulatory burden.

Still, the Feds refuse to tackle the big regulatory problems plaguing – excise tax rates, multiple stickers, provincial regulatory islands, combatting the illicit market and onerous branding restrictions.

I’ve helped many LPs and MSOs enter the EU, UK, Israel & Australia and build significant market share.

Send me a DM to set up a call.

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#LPs #exporting #Germany #Australia #Israel #trade #regulations #UK #exports

People in #cannabis casually throw around the word #culture to justify #marketing decisions or explain career choices. Before deciding whether culture matters, it helps to define it.

In Zen and the Art of Motorcycle Maintenance, Robert M. Pirsig wrote: “If you can’t define something you have no formal rational way of knowing that it exists” and doing something about it.

Culture is a shared set of values, norms, language and behaviours. It isn’t fixed or monolithic. It evolves as people, markets and circumstances change.

With that in mind, here are 3 common assumptions about cannabis culture and what they mean for business.

1️⃣ Cannabis culture is powerful

Absolutely.

Few industries have a culture as distinctive. Love of the plant, belief in its medical benefits, and social justice create strong bonds across remarkably diverse groups.

But let’s keep it real. Cannabis is important, but it isn’t sacred. The culture also has a dark side. Some companies and people invoke the ‘canna-family’ to manipulate employees or pressure suppliers.

It’s also a mistake to think there’s one cannabis community. There are many flavours. Patients, legacy operators, connoisseurs, and bankers all bring different motivations and expectations.

Treating them as one group leads to poor #segmentation, weak marketing & educational programs and generic customer #experiences.

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2️⃣ Cannabis culture attracts and retains talent

100%

Many people join the industry because they genuinely care about the product and its impact. That shared #purpose creates loyalty extending well beyond compensation.

Despite legalization, weed culture hasn’t been homogenized. Employees and consumers still share kinship and attitudes shaped long before legal markets existed. Companies that respect those values build stronger teams and more credible brands.

3️⃣ Cannabis is just another CPG product

For casual consumers, perhaps. Traditional #CPG marketing works reasonably well for low-involvement buyers.

But the industry’s most valuable segment is heavy consumers. They buy most often, influence others and identify strongly with cannabis culture. Their purchasing decisions are driven by identity, community and authenticity, not simply price or THC.

You don’t need to be a heavy consumer to understand this. Spend time at a sesh or community event and you’ll quickly see cannabis isn’t purchased like toothpaste.

The industry’s evolution reinforces this. If cannabis truly behaved like a mature CPG category, the winning firms in markets like California and Canada would resemble traditional consumer goods companies. They don’t.

Cannabis isn’t CPG or any other industry. It is its own messy, evolving thing.

Your competitive advantage isn’t just embracing cannabis culture. It’s about jettisoning assumptions and understanding which parts matter to customers, employees and partners, and building your strategy around them.

Thoughts?

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A #moat is the long-term ability of a business to maintain a competitive edge, just like a medieval castle protected by a moat.

💡 Moats matter. Operators want to choose the right business partners, especially during industry #consolidation and global expansion. Investors want to invest in the best firms, particularly when venturing into new or volatile markets.

🚀 Check out the S&P 500 Economic Moat Index. This index measures the performance of 50 companies with strong and sustainable moats. Over the last 10 years, the index has delivered higher risk-adjusted returns (~16%) with lower volatility (~15%) than the broader S&P 500.

Cannabis Moats

There are many places in the value chain to create a moat. #Regulations play a major role in determining which markets can support one:

✔️ Owning limited licenses

✔️ Defensible IP

✔️ Strong, unique brands

✔️ Highly desirable retail locations

✔️ A sustainable cost advantage

✔️ Control of shelf space

Many #cannabis operators claim to have a moat.

I doubt it.

First, moats are difficult to quantify in the short term.

More importantly, it is difficult to claim a moat without direct evidence of superior financial performance. A product patent says nothing about commercialization success. A high-velocity #hemp beverage brand does not automatically translate into consumer loyalty or premium pricing. Industry-leading grow costs are valuable only if they support products consumers actually want.

Financial Footprints

In my client work and research, businesses with a moat consistently deliver these metrics relative to competitors:

🤘 Strong, stable gross margins, especially in price-sensitive markets

🤘 Dominant market share

🤘 High, sustained Return on Invested Capital

Not. A. Moat.

⚠️ High margins or market share alone do not prove a moat. Be cautious around:

➡️ Early market take-off. Everyone looks good.

➡️ Fads and hype. Temporary innovations with no defensible long-term edge.

➡️ Debt-fueled growth from capacity expansion, M&A or aggressive price discounting.

➡️ Vulnerability to disruption, including AI, imports or major regulatory change.

True moats deliver consistent financial results over time, geographies and metrics, not just one good year or one measure.

Dredging Your Moat

1️⃣ Pick a strategic lane where you can dominate and then allocate sufficient capital and resources

2️⃣ Refine the capabilities that buttress the advantage

3️⃣ Understand that moats are relative to the competition

4️⃣ Recognize moat-building takes time, effort and reinvestment

The last word goes to Warren Buffett:

“The key to investing is not assessing how much an industry is going to affect society, or how much it will grow, but rather determining the competitive advantage of any given company and, above all, the durability of that advantage.”

Moats start with disciplined, bias-free strategic thinking & planning. I will help your teams deliver breakthrough results that will enable you to out-compete your peers.

DM me.

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A few years back, the Cannabis Business Times tackled this subject.

They reviewed dispensary #names in Weedmaps and found that ‘cannabis’ was in 9% of listed names. There were also plenty of canna-something names plus ones that included wellness.

Beach and nature vibe words like cove, leaf and ocean were also very common. Not, surprisingly, the colours green and purple predominated in the logotype.

I also did some quick research. Using AI, I looked at the top 50 MSOs and SSOs by revenue:

✔️ 20% had cannabis in their name

✔️ 22% had names that began with the letter ‘C’.

✔️ 16% had ‘green’ ‘leaf’ or ‘wellness’ in their names.

Weed’s lack of originality contrasts with the diverse naming conventions found in every major consumer products category.

Name homogeneity is a serious business problem, for the following reasons:

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1️⃣ Lack of differentiation. Competitors blend into a single, forgettable blur.

2️⃣ Consumers are easily confused, challenging attempts to build brand awareness and loyalty.

3️⃣ Brand-corporate strategy misalignment. It is difficult to link a milquetoast name to a credible corporate position.

4️⃣ Legal risk. Companies open themselves up to legal attacks when names are too similar. A friend of mine was sued by Toys R Us because his corporate name, Shirts R Us (an apparel firm), was deemed too close to toys.

5️⃣ Name confusion hinders SEO plans and #trademarking plans.

Creating a strong brand starts with having a unique, relevant and ownable name.

Before renaming your brand or company, it is best to go back to marketing fundamentals.

You will want to revisit your firm’s corporate positioning, target segments and competitive set. Make sure you understand who your consumer is and what they care about. Furthermore, confirm that your #brand and operations are delivering on the desired value proposition.

Renaming a dispensary or small operation can be relatively straightforward. For larger entities, a rebrand – when done properly - takes effort, money and time.

Coming up with a good name in a hyper-competitive industry will be one of the toughest #marketing tasks you will undertake.

I’d be happy to walk you through the revenue & strategic upside and execution roadmap of a renaming initiative. Let’s talk.

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Its relevance to the #cannabis industry and #investors cannot be overstated.

Cannabis #influencers along with stock ‘finfluencers ‘should be taken with a kilogram of salt. Their endorsements are often riddled with financial #conflicts, ethical lapses, inaccuracies, and poor #disclosure.

Comments and videos frequently mislead consumers & investors, libel companies and individuals, diminish our sector’s professionalism, and often break the law.

The worst culprits are readily apparent.

We shouldn’t be surprised. Influencer deception is endemic across the broader economy. According to Galloway,

“A study published last year in Marketing Science analyzed more than 100 million brand-related posts on Twitter across 268 brands. It found that as much as 96% of sponsored posts were not disclosed. Another study assessed millions of posts on YouTube and Pinterest and found that disclosures were made only 10% and 7% of the time, respectively.

Deceptive advertising is illegal. If an influencer is paid to promote something, the FTC’s Endorsement Guides require them to disclose that relationship clearly and conspicuously.

It’s also illegal to mislead your audience for financial gain. Faking your results is illegal. Making product claims without evidence is illegal. As of 2024, the FTC’s fake reviews rule makes phony testimonials punishable by roughly $52,000 per violation.

And if you’re promoting a security, the SEC requires you to disclose exactly what you were paid.”

Existing laws govern creator content, ‘pay to play’ promotions and conflicts of interest. Most creators, however, ignore these regulations.

Enforcement is largely absent, except occasionally by the SEC in securities matters.

Influencer marketing has become the default way products, public companies, and commentators reach young buyers and retail investors.

“For Gen Z, influencer advertisements have become a driving force in consumer behavior. Three-quarters of Gen Z say they’re more likely to buy from a brand simply because it partners with an influencer they like.

A GoDaddy survey found Gen Z trusts an influencer’s product post over an ad from the business itself, despite the fact that there’s seemingly no verifiable way to tell if an influencer has been paid to make an endorsement.”

Generative AI will make matters worse. It will drive campaign costs to virtually $0. Soon, the online cannabis ecosystem will consist of fake influencers and stock promoters endorsing real products and public companies, while real influencers endorse fake ones.

Without sustained government enforcement, the only people who will pay the price are consumers and investors.

Emptor et lector caveant

I have no financial conflicts and always deliver the straight goods. Let’s chat about your needs.

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Less discussed are 3 structural problems that continue to undermine the industry’s long-term viability.

1️⃣ Market Distortions

⛓️‍💥 The IM prevents the emergence of a truly competitive market. You don’t have to be an economist to understand incentives.

Legal operators struggle to achieve sustainable pricing because illicit sellers effectively establish a price ceiling. Without meaningful product differentiation or significant industry capacity reductions - both difficult under today’s regulatory and operating conditions - legal producers have little pricing power.

High cannabis taxes further strengthen the IM. Illicit producers enjoy a structural cost advantage by avoiding excise taxes, regulatory compliance costs and many quality standards. The result is higher margins versus what most legal operators can achieve. This incentivizes illicit players to increase production even in a declining price environment. More supply further depresses legal prices.

Low legal margins combined with high taxes also encourage ‘don’t ask, don’t tell’ product diversion into underground or disallowed markets. The number of California brands sold outside the state (including Mexico) is an open secret and likely underreported.

The IM also destroys price discovery. In efficient markets, prices communicate scarcity, quality and profitability. A large untaxed, unregulated competitor prevents prices from reflecting true operational costs or consumer willingness to pay, making long-term planning and capital allocation less reliable.

2️⃣ Rife Counterfeiting

💨 Counterfeiting is a multi-billion-dollar global industry spanning wine, apparel, luxury goods, and even everyday products such as olive oil (see below). Cannabis is no exception.

Counterfeit weed is widespread in the U.S. Just visit an illegal (and some legal) retailers in NYC or look at the proliferation of “gas station” weed in non-legal states.

The problem will intensify as cannabis brands and regional appellations begin to command premium pricing. Higher margins create strong incentives for bad actors to launch phony brands with fake packaging, misrepresented origin & COAs and product dilution.

3️⃣ The Enforcement Illusion

⚠️ Many business plans and investment models assume govt’s will eventually reduce the IM to 5-10% of total consumption through enforcement. Reality suggests otherwise.

Canada’s 200 year old tobacco industry illustrates the hypocrisy, deliberate inaction and addiction to tax proceeds. Illegal producers reportedly generate ~$2.5B in annual sales, capturing up to 50% share in some provinces.

The govt’s tolerance of illicit markets leads to unrealistic volume & price expectations for investors and operators alike. The result: wasted capital, lower than expected profitability and unnecessary distractions for companies.

https://www.theguardian.com/world/article/2024/jul/29/olive-oil-fraud-mislabelling-cases-record-high-eu

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⚡ Sadly, most change efforts result in failure - and end up making matters worse.

I help cannabis firms change quickly and with minimal pain, in these types of situations:

↔️ Instituting new SOPs, technologies, processes and organizational structures

🐬 Leading or supporting an important change management initiative

🦺 Post M&A, integrating disparate teams and business activities

🪴 Scaling up the business to accommodate rapid growth

💜 Launching a new vision, mission & purpose

🛠️ My tool kit leverages proven and proprietary change management techniques, tailored to the unique needs of the cannabis industry and customized to your firm’s strategy, leadership & culture.

Let’s chat about where your organization is and where it needs to go.

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Look to CPG.

As background, I spent many years working at/with P&G, Maple Leaf Foods and SC Johnson. I’m also a power user of different LLMs (but not to write my posts!) for a variety of marketing and financial tasks.

CPG’s AI experience can help cannabis firms in two areas notorious for squeezing margins, wasting capital, and killing consumer & retailer satisfaction.

1. Demand planning & inventory management

MSOs and LPs must make production decisions up to 24 weeks in advance of a SKU being shipped and 33 weeks before they get paid. Changes in demand are difficult to be accommodated after a cultivation decision has been made. This is especially problematic for a rapidly obsoleting product like raw flower.

Small demand variances can trigger surplus inventory, out of stocks, heavily discounted sales or expensive write offs. Excessive inventory is also frozen working capital that is unable to be deployed to more efficient places.

AI tools can improve upfront decision making by factoring in many external & internal variables such as weather, consumer & reseller buying patterns, emerging trends, competition and existing inventory levels.

CPG firms have used AI forecasting models to reduce stockouts by 20–70% and inventory costs by 20–30% not to mention better serve retail partners.

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2. Sales & Marketing: Portfolios, Pricing, Promotion

Virtually every cannabis firm underperforms when it comes to selling margins, bloated SKU lists, and marketing inefficiencies.

AI supports the entire sales & marketing team. AI can help determine which promotional discounts increase volume, which discounts just push sales forward and which retailers generate the highest ROI.

AI will optimize your product portfolio against your desired business criteria. This can lead to an immediate culling of 50-75% of your underperforming SKUs.

Finally, AI will get you to the ‘optimal’ price points that balance volume and profit. This is achieved by comparing your brand value to competition, analyzing your sales at various price levels over time, factoring in seasonality and testing the elasticity of demand.

Various CPG firms have seen an 10–15% improvement in promotional ROI and a 8-10% margin expansion.

But remember…

Rome wasn’t be built in a day. Expect to be evaluating different vendors, running pilots and undertaking change management with your staff.

Moreover, AI won’t significantly improve performance if your SOPs & practices are bad, there is insufficient in-house talent, external data is “dirty” or your IT systems are not mature enough.

Take a page from CPG. AI’s biggest financial returns today are in planning and commercial decision-making.

I can help you capture this value in a low risk way.

DM me and lets talk about your needs.

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Left was a notorious during the cannabis stock boom of 2018/19 for targeting several prominent Canadian cannabis companies. He will be remembered (unkindly) by many retail investors plus the following LPs. Per AI…

Cronos Group: Left famously targeted this company, issuing a report that claimed the stock was massively overvalued at C$3.50 per share (it closed at $4.03 yesterday). He accused management of deceiving the public about distribution deals.

Namaste Technologies: Citron released a highly critical report characterizing the weed e-commerce company as a fraud.

Tilray & Canopy Growth: Left took short positions and published bearish commentary critiquing the valuations of these large players.

Village Farms International: Left released a report alleging the business was a fraud while its shares were soaring.

I recall his commentary on these LPs. If my memory serves, there was lot of bs in his reports. Other than Namaste (which is gone), the firms remain in good standing with securities regulators and in some cases are flourishing.

Short sellers are not going anywhere. They keep management on their toes, correct overvalued stocks and provide important liquidity for the market. Left, for example, was instrumental in taking down Valeant Pharmaceuticals for its accounting irregularities and GameStop following its Robinhood-driven share price run up.

Why should cannabis care about this case?

1️⃣ Pubcos must keep their financial house in order from an accounting and disclosure perspective. Short sellers prey on firms that aren’t buttoned down.

2️⃣ Expect more short sellers to target high-flying cannabis stocks following any sustained share price run ups.

3️⃣ There could also be significant implications for influential weed investors publishing stock commentaries.

This is where it could get interesting.

Left was a well-known activist with hundreds of thousands of social media followers. Prosecutors asserted that he would build a position in a stock, make public statements that aimed to move its price, then quickly trade out without making it clear to the public that he had done so.

Left put up a vigorous defense, claiming his public comments reflected genuine beliefs. He also did not believe he was required to hold a position in a stock for a specific period after sharing his opinion about it. Requiring an investor to disclose his personal trading when publishing opinions about securities would, he claimed, have a “chilling effect” on “the flow of truthful information to the markets”.

Anyone recognize this issue in cannabis right now?

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#AndrewLeft #shortselling #Canopy #VillageFarms #Cronos #Namaster #Tilray