Welcome to the fourth and final piece of our 2023 Cannabis Industry Predictions series, this time featuring the voices and opinions of industry experts in cannabis finance, policy, international markets, real estate, and more.
Over the course of this month, we have released predictions and expectations from experts representing every corner of the industry — from cultivation to investing, from hemp and cannabis CPGs to psychedelics, from hiring and employment strategies to data analysis — so we’d like to extend an enormous thank you to the individuals featured in this series who agreed to share their time and expertise with our audience. If you missed them, be sure to check out the first, second, and third installments of our year-capping series!
And lastly, happy New Year! We can’t wait to see what 2023 brings.
Finance
Giadha A. DeCarcer – CEO of CTrust & founder of New Frontier Data
“For the first time since the industry’s birth, we see signs of potential market contraction – decreasing consumption, misalignment between supply and demand, lack of capital access, and consequent increasing business failures. While we await potential regulatory improvements to help the industry mature, the best way to positively and immediately support U.S. and global cannabis markets is with more equitable and cost-effective capital flow. That requires quantifiable, verifiable, systematic, and ultimately trusted visibility into cannabis businesses’ performance. The time for true transparency is now and today is the day we must embrace sophisticated business credit scoring allowing mature access to capital.”
Visit website
Patrick Rea – Managing Director of Poseidon Garden Ventures
“A lame duck vote in the Senate on SAFE+ could have the biggest impact on cannabis investment activity in 2023. Inaction in D.C. on federal legalization has suppressed investor interest in cannabis in the last few years, leaving many founders scrambling to raise new funds from a smaller pool of capital allocators. If SAFE+ doesn’t pass, one can reasonably expect the status quo – a capital constrained industry where flat, down, and more structured rounds persist. While advantageous for investors with capital like Poseidon, entrepreneurs are wise to think about creating a path to profitability sooner, rather than later, when going out to raise new rounds.”
Visit website
FinTech
Julia Germaine, Operating Partner at Kind Ventures
“The next 12 months will most likely remain a challenge for cannabis businesses to create sustainable profits, without the channels of new investor capital and (non-distressed) M&A activity. To succeed operators must continue to innovate and find more paths to profitability, especially retailers who can finally take advantage of digital payments and consumer subscriptions. These innovations increase average basket sizes and bring a deeper form of customer loyalty. Retailers should break away from the technology stack of yesterday and have an open mind towards higher-ROI options that are blazing the trail towards profitability.”
Visit website
Policy
Courtney Davis – Executive Director Marijuana Matters
“The cannabis industry will continue to grow next year and as a part of this maturation process, we can expect more pressure on the federal government to reverse harmful prohibition laws and embrace thoughtful and restorative policies to move the industry forward. Equity advocates will continue to raise awareness about the nuances of legalization and how to expand the social equity ecosystem. I anticipate that equity conversations will be focused on licensing and beyond.”
Visit website
International Policy
Anna-Sophia Kouparanis – Bloomwell Group Co-founder
“One of the most positive aspects of the German government’s current legislative proposal for adult-use cannabis is that businesses will have equal opportunities to apply for licenses with minimal limitations. Other positive points in the proposal include the omission of THC limits (at least for consumers over age 21, though potentially for those ages 18-21) and that this proposal would provide amnesty to those who have been convicted of prior cannabis offenses. However, the legislation could be improved even more if it included provisions to assist illicit operators in transitioning into the legal adult-use market.”
Visit website
Miles Worne – President of Curaleaf International
“2023 will see players line up on the starting grid for the German recreational legalisation race, due to start in early 2024. Expected to be worth $10B in a few years’ time, Germany is the number one global cannabis opportunity which everyone is watching closely, including other European countries keen not to lose out to their big neighbour.”
Visit website
Niklas Kouparanis – Bloomwell Group CEO and Co-founder
“Germany is making historic progress moving forward with adult-use legalization, and I expect the market to come online by the first quarter of 2024. However, we will have our work cut out for us this coming year during the approval process. But, once Germany’s market does come online, it will become the largest market in the world, as Germany has more than 82 million inhabitants – more than California and Canada. The future language for cannabis will be German, and this will be the planet’s flagship market. Entrepreneurs and investors alike are quite bullish on the market’s potential.”
Visit website
Real Estate
Holly Dupart – Founder of Realty Smarts
“Get Little! The cannabis space is wide open and it can be tempting to go big. Consider scaling down instead of up. Refine your niche and grow a quality brand by consistently delivering superior products and service excellence.”
Visit website
Darrin Chandler – Director of Cannabis Real Estate at RIPCO Real Estate
“Cannabis real estate has been a hot topic in the New Jersey and New York markets in 2022 due to the various obstacles in obtaining the right property. 2023 all eyes are on the moves that the federal government will make in support of the cannabis industry. With the Safe Banking Act gaining real traction and cannabis possibly becoming a rescheduled drug, the government has an opportunity to help alleviate 2 main issues in the cannabis industry: access to capital and access to real estate. Rescheduling cannabis will allow operators to treat cannabis real estate like a traditional real estate transaction. If small businesses and startups have banking, access to loans, and the various options a traditional real estate transaction affords, the cannabis market will be more equitable and competitive.”
Visit website
Bryan McLaren – Chief Executive Officer and Chairman at Zoned Properties, Inc.
“By the end of 2023, we predict the cannabis industry will begin to see mass entry from traditional service professionals looking to provide goods and services to the regulated cannabis market. Mainstream entry suggests the industry is evolving out of the early adopter category and into the early majority category, which will require massive education and noise reduction efforts as new entrants find their footing. This transformation will signify that regulated cannabis has graduated to become a cornerstone of commerce in our community marketplaces.”
Visit website
Rob Sechrist – President of Pelorus Equity Group
“In 2023, real estate will remain the cannabis sector’s most stable, valuable asset. At Pelorus, we’re as close as you can be to a pure real estate lender, while our peers use either a BDC or sales-leaseback model. With the BDC model, lenders require significant financial covenants, which can hamstring company growth. In a sales-leaseback, typically a 15-20 year agreement, a borrower gives up their most valuable asset and hampers their optionality. While our peers are struggling to deploy capital and having borrowers default on payments, we continue to capture market share and lend at attractive rates for investors.”
Visit website
Get daily cannabis business news updates. Subscribe
End