While attendance and sponsors at MJBizCon in Las Vegas seemed a little lighter than previous years, that didn’t dim the optimism in the industry.
The trade floor looked as full as ever with numerous splashy booths, but the normally packed agenda for panel sessions was noticeably thinner with no major keynote speaker this year.
The conference also kicked off on a sobering note, with speakers noting the challenges that the industry faced this year.
North American Market Overview
While the Canadian market has seen sales increase over the past year, the industry north of the border has been plagued by layoffs, insolvencies, and many companies giving their licenses back, according to MJBiz reporter Solomon Israel.
Israel also pointed out that the pace of growth is slowing.
Canadian operators also want change in how the industry operators, particularly as it relates to taxation and THC limits. They would also like to see marketing and advertising restrictions ease.
While Canada looks to make changes to its national market, the U.S. is still focused on expanding legalization. The overall tone was that 2023 was really difficult, but there is great hope for 2024 with expectation centered on rescheduling in 2024 that would end the 280e tax restrictions.
MJBiz reporter Chris Roberts, however, dumped on New York, calling it a model for how “not” to do legalization.
Optimism and Headwinds
Despite the forward-looking optimism, the headwinds are still blowing. Virgil Grant of the California Minority Alliance said his bank closed his account this month, and he couldn’t get a basic business loan to make payroll or lease payments.
He said he has gone through six bank accounts so far. If the 280e restrictions change, Grant said he stands to gain 30 cents on the dollar for his business.
Trulieve (OTC: TCNNF) CEO Kim Rivers said her company is fighting against the rule, with Trulieve filing an amended return and claiming a refund in October for its 2019 claim. She said they were still waiting for word from the IRS.
“This is not us not paying our taxes. It’s not the same as other companies that don’t have the money and opted to not pay,” Rivers said. “Trulieve does have the money to pay, but we’re fighting for all.”
She believes the Florida market size has the potential to reach $6 billion. Rivers predicted that Florida will legalize adult use in 2024 and that Pennsylvania also will be on the way.
The change in market dynamics has also changed how companies operate, according to Karson Humiston, founder of employment company Vangst, which has raised more than $35 million.
Companies in 2022 companies were focused on growing at all costs, she said. “That has switched to a focus on cash flow break even. Capital is at worse terms, and founders are losing control.”
The number of jobs in the industry declined in 2023, falling 2% from 2022 estimates.
Despite that, Humiston remains optimistic for 2024 and believes that the removal of 280e restrictions will boost hiring. She also noted that her company was lucky that it was one of the few to break even this year.
But Kim Rivers advised Humiston that it wasn’t just luck: “For Vangst to break even, it was hard work, Karson. Not luck – own it.”
Read More Feedzy