On April 19, the house passed HR 1996- the Safe Banking Act. (Cannabis Business Times @CBTMag, 4/20/21). This is a positive development, as commercial banks will now enter the industry. On the street, this means you will be able to use a debit card at a dispensary. A level up, it means the dispensary owner might be able to get a traditional business loan. It is also another sign of increasing industry maturity.
What “industry maturity” means in practice is that it will no longer be enough to simply open a dispensary and watch the people line up with cash. It means that businesses will have to really know what they are doing- strategically as well as operationally, in order to prosper. Those that do, and can demonstrate it will be able to form effective banking relationships and finance their businesses as they grow. Those that cannot demonstrate professional business management will fail to gain financial support from banking institutions and will not be able to compete effectively over time.
One thing that this implies is that having access to quality data will become more and more important. Increasingly, this will mean having the resources to engage top level consultants, attorneys, investment bankers and other advisers- which means the gap will increase between the large, established, well funded players and the “little guy”.
And this is where the Mid Atlantic Growers Association comes in.
One of the core pillars of our mission is Excellence in Business Operations: https://bit.ly/323UPpr . Responding to a challenge such as the one just described is exactly why we exist.
Describing the global cannabis industry, some portions of which have already experienced a shakeout, the consulting firm @Deloitte says, “As the industry recovers, the remaining cannabis companies will be more specialized, professionalized, and follow prudent M&A practices…” (Deloitte 2020 Cannabis Report).
So what will we do? Specifically, once properly capitalized, the Mid Atlantic Growers Association will commission best in class business and legal consulting research and, with the proper disclosures, make this information freely available to members and in some cases, the public. This will allow small, newer cannabis businesses to compete effectively against more established players for funding, talent and market share.
Our capitalization strategy will focus on the sale of logo merchandise through the Catalog section of this website.Please watch this blog (bookmark it!) in the coming weeks and months as we address these and other issues.