Last month, tens of thousands of folks working in the cannabis industry congregated in sunny Las Vegas for MJBizCon 2022. Me and my canna-crew, comprised of the unparalleled attorneys in Burns & Levinson’s Cannabis Business and Law Advisory Group, were thrilled to share the city with other cannabis professionals and entrepreneurs. While the B&L team has been attending MJBizCon since its inception, it was my first time there. What can I say? It was a great privilege to chat with passionate professionals, learn from industry pioneers, and be in a place where cannabis is lauded for its economic and wellness value and continuing potential in our national economy. In the wake of meeting and talking with over fifty individuals from all aspects of the cannabis industry and from all corners of the country, here were my biggest takeaways.
Working with the Same Plant but Different Laws
While the cannabis plants from state to state may share substantially the same genetics, the businesses that cultivate, manufacture, distribute, and sell those plants operate in entirely different regulatory ecosystems from state to state. As a student of the regulations, I’m well aware of the differences in cannabis-related laws from state to state. Still, I did not quite appreciate the impact the laws have on shaping the trajectory (and the viability) of a cannabis business. Cannabis companies in one state advertise, transport, process, test, and sell their product in entirely different ways, resulting in an ease of operation for some and increased obstacles for others. The way consumers are permitted to shop inside a dispensary varies greatly from state to state. These disparities often have the largest impact on cannabis businesses located near the state border of another adult-use state. Many consumers may cross state lines to use the more accessible dispensary with better quality or higher potency cannabis products. And that other neighboring dispensary can’t do a damn thing about it without flagrantly disregarding the laws of the state they operate.
I do not think federal legalization and a uniform federal standard for the cannabis business is the solution. I think that would stifle the diversity and creativity employed by cannabis businesses and be replaced by the cannabis equivalent of a JCPenney or Buffalo Wild Wings. No, I think the state legislatures need to constantly review their cannabis regulations to ensure the practical result of such regulations fosters a fair and productive cannabis market and doesn’t impose senseless barriers to the economic viability of its businesses.
Differentiation in Product
As both a consumer and a professional in the cannabis industry, I recognize that most cultivators and manufacturers employ great care and passion in creating their top-quality cannabis products. But how do you stand out in the market if everyone is creating excellent products? For cannabis operators, the answer to this question is a major point of focus and motivating them to develop a product that stands out. The best examples I have seen are the development of THC-infused beverages that are consistently gobbling up more market share and a focus on full spectrum edibles taking advantage of the benefits and unique characteristics of the whole family of cannabinoids rather than focusing solely on THC.
From my conversations with operators, it was clear that differentiating their product from the competition is the key to long-term success.
It Takes a Village
You need more than a valid cannabis license to be successful in today’s cannabis market. A variety of partnerships are critical to the growth and stability of any cannabis business. Different cannabis brands contract with each other to help diversify the products available in their dispensaries. Engineers and scientists create new cultivation, extraction, and manufacturing equipment for producing cannabis products. Accountants develop and apply new methods to structure companies and manage bookkeeping to help operators save money, technology companies produce software designed to streamline inventory management and payment processing, and the list goes on.
Because the cannabis industry, which is not unique in this regard, requires an entire ecosystem of passionate professionals to grow and thrive, it has become a refuge for those who desire to continue plying their trade and make a living but do it in an industry they care deeply about and find enjoyable. Take me, for example. I began my legal career representing banks in lending transactions. A critical component to any healthy economy, to be sure, but not capable of pulling me out of my comfy bed each morning. I needed to make a change or else risk letting the fire in my soul be dowsed by the monotony of traditional corporate America. Burns & Levinson allowed me to practice business law for one of the most reputable and trailblazing cannabis practice groups in the country. The result – it is now easy to get out of my bed in the morning.
Support for Cannabis Transcends Politics
Throughout the 20th and 21st centuries, cannabis and its sale and use have been politicized, with each political party taking its stance on the matter. Undoubtedly, it remains so, but it is less polarizing than it has been in the past. The attendees at MJBizCon were not a bunch of liberal hippies from the ’60s but rather a politically diverse group of people like you’d find in any industry.
The MORE Act and the SAFE Banking Act both have bipartisan support in Congress, despite not gaining enough traction to get taken up for a vote. The “War On Drugs” Republicans from the Reagan years are diminishing by the day and being replaced by Republicans who value economic freedom and the rights of states to govern themselves in accordance with the Constitution.
The fears of increased crime, cities smelling like burning flower, and an increased number of young people using cannabis have been unfounded, and legislatures across the country are coming to grips with this truth, if not at a glacial pace in some states.
The boost in tax revenue hasn’t hurt in the battle to swing lawmakers across the political spectrum toward the green side, either.