Cannabis operators and executives tell Benzinga that the movement of private and public companies may serve as a better indicator of regulatory activity than the federal government. At the very least, they say that the industry has made advancements so far without the efforts of Capitol Hill.
Poseidon Asset Management managing director Emily Paxhia recently mentioned that she and her firm are tracking the steps of private companies, cannabis and otherwise, noting which prominent brands are supporting the cannabis industry.
Paxhia highlighted Nike Inc's NKE recent support of track star Sha'Carri Richardson over her suspension from the Olympics over cannabis use.
Calling the actions "signaling moments," Paxhia said investors and operators should consider, "Thinking about these bigger companies and looking at directions from them, not always from the regulators who seem to be lagging behind."
Cannabis Policy Reform: "Big Business Led It...Very Little Government Intervention"
Operators in various sectors of cannabis feel that the industry provides a better insight into regulatory needs and movements than lawmakers.
Michael Sassano, CEO of Somai Pharmaceuticals, believes that big business is doing fine, shaping the industry's market without the federal government. He expects this trend to continue.
"All this continues while the government continues to fumble the ball," said Sassano. He added, "At some point, it should be evident that legalization on a federal level is just an outdated political football."
Roger Bloss, CEO of holding company MJ Holdings, Inc. MJNE, said that lawmakers act when businesses create a need for industry movement and policy reform. "Big business led it, and it's had very little government intervention," he said of industry progress so far.
Dede Perkins, co-founder and CEO of compliance tech company ProCanna, also considers big cannabis a worthwhile gauge of the market.
She noted that cannabis leaders have "a multi-jurisdictional lens and have hired lobbyists to be on the frontlines, talking with lawmakers at the state, federal, and in some cases, international levels."
Perkins cited how business leaders have a pulse on the public cannabis demand and insights to pending M&A activity that could alter markets and potential legislation.
"Some lawmakers have insight into upcoming market movements, but I'd listen to big business leaders who have their fingers on the pulse at all levels," Perkins said.
Operators Using M&A As Regulatory Gauge
Cannabis companies see the writing on the wall through major M&A deals.
Sassano said that following the U.S. market is the best indicator of possible reform. "When Canadian CEOs...claim that the U.S. is like a lottery ticket, and meanwhile U.S. companies continue a blistering pace of M&A, you know that the U.S. is going up." In May 2021, Epidiolex and the entirety of G.W. Pharmaceuticals plc's GWPH neuroscience portfolio was acquired by Jazz Pharmaceuticals plc JAZZ for $6.7 billion.
Perkins referred to another pending deal between MSOs Trulieve Cannabis Corporation TCNNF and Harvest Health & Recreation Inc. HRVSF. Trulieve is currently in the process of finalizing a $2.1 billion deal to acquire Harvest.
Perkins added that MSOs are merging to claim their stake before intrastate distribution is allowed. She said those that do so would "be positioned to dominate a region rather than just one or a few scattered states."
Klee Irwin, founder, and owner of CBD brand Irwin Naturals said his company is looking to become the first national herbal extract brand to sell THC products as well.
Like many others in the space, Irwin, whose company retails at Costco Wholesale Corporation COST, Walmart Inc WMT, CVS Health Corp CVS and Whole Foods, believes "federal legalization of marijuana is around the corner."
Image: Pexels/RODNAE Productions
© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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