At Arcview’s International Investor Forum in L.A. this week, we learned so much, supported our client CanIDeal and had a great time getting to know their fun and capable team, and even got the chance to sit in on some fantastic panels as well.
We were struck by one panel In particular, “The California Market: One Year Later,” moderated by the California Cannabis Industry Association’s Executive Director, Lindsay Robinson. Here are some of my quick takeaways from the session, with the key theme of challenges ahead.
It was a challenging first year and the first year that profits fell. Lack of enforcement, high taxes, choke points on the licensing structure, and compliance in distribution will also continue to be factors. Expect new regulations in 2019 which can mean new challenges for those not immersed in the regulatory environment.
Illegal businesses are also causing layoffs with businesses that are playing by the rules and care about compliance, law enforcement and cannabis control are lacking funding, while testing product continues to be confronted by changing testing methodologies and finding labs that give the best results. This is compounded by the fact that ISO-accreditation will soon kick in, requiring a 3rd party to confirm labs have operations that are up to par with requirements.
However, it’s not all gloom and doom, in fact, these challenges are pretty typical for any new industry (well, new in the legal sense).
The big takeaway of the session for us? The strong will survive. Onward in 2019!