Freshly back from Las Vegas, here are ten things I learned last week at MJ BizCon.
1. Don’t sing the stock market blues. Yes, cannabis valuations among the publicly traded companies got hammered in 2019, with a downstream spillover effect on private deals, and the IPO pipeline heading into 2020 looks sparse. But the industry is still going strong, as evidenced by the crowds and energy level in the convention center and at receptions on the Strip.
Cannabis is still very much a growth industry. Look past the headlines.
2. Walking the entire floor is a full two-day exercise. Not only because of the sheer immensity of the hall, but also in order to wade through the crowds at each booth.
3. It looks like 2020 might be the year of the US multistate operators. Up until this past summer, the story of cannabis was dominated by Canada. With two big population states – Illinois and Michigan – now going adult rec, and New Jersey and New York looking more and more likely, the facts on the ground in the US market are beginning to shift the industry’s center of gravity.
4. Tech is becoming more important, just like in every other vertical. I was personally intrigued by one exhibitor who had developed a robotic trimming machine, and continuing advances in handheld, field capable potency testing devices. Also, many different software providers across a variety of business functions were present, from grow room automation to compliance and everything in between.
5. Very international crowd, with what felt like a significant increase in the representation of Chinese vendors and attendees. China is the world’s second largest economy, so that feels like a very positive development for our industry.
6. What vape crisis? Vape is starting to feel like it is very specifically a black market problem. Regulated operators buying through approved, licensed channels have of course been hurt, but the industry overall appears to be moving beyond the issue. For the white market the problem seems to be receding in the rearview mirror at this point, especially for diversified operators who can shift their consumers into other product form factors. But vaping remains a very popular form of consumption.
7. Significant representation by horticultural and processing vendors of all types: extraction equipment, lighting, greenhouses, irrigation pumps, fans, fertilizers, etc.
8. While the industry is fast losing its “stoner” vibe, it is still there if you look carefully enough. Most exhibitors by now are fairly corporate, with polo shirt-clad booth personnel. But some businesses continue to embrace the industry’s outlaw image roots. The most popular tee shirt color continues to be black.
9. If you wear a cap, as is my habit (instead of displaying a bald dome to the outside world), prepare to be mistaken for a grower.
10. Can’t wait to do it all over again next year.
Ed Harris is the CEO and co-founder of Pacific Growth Capital, which operates the Spark® Deal Room. Originally from New York, Ed now lives in Seattle with his family, where he enjoys the scenic beauty and slower pace of life that the Pacific Northwest offers. He does, however, forbid his children to root for any professional football team other than the NY Giants, and misses the pizza.