Election Reaction: Cannabis Insiders, Experts, Leaders and Operators Give Their Insight

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AUTHOR: Heather Allman


Election Reaction: Cannabis Insiders, Experts, Leaders, and Operators Give Insight


February 1, 2021 CNBC Breaking News:

Democratic senators will push to pass pot reform bill this year


But let’s start back at the beginning, with the November 2020 elections for context. 


Following the 2020 election results, cannabis stocks are growing exponentially. On election night, the United States saw a green wave when four states – Arizona, New Jersey, Montana and South Dakota – voted to legalize adult-use cannabis, and a fifth, Mississippi, approved medical marijuana.

Additionally, Oregon became the first state to legalize psychedelic mushrooms, and Washington, DC approved the decriminalization of psychedelics.

Plus, we’d be remiss not to include the cannabis catalyst and conversation that was sparked off with the outcome of the January 2021 Georgia Special Elections. 



The Georgia elections have gone towards the Democrats, giving them control of the House, Senate, and Presidency. While this does not guarantee any sort of change in cannabis legislation, it makes the passage of important legislation — including CBD reform and banking legalization — that has been unscheduled in the Senate, much more likely to at least be voted on and potentially passed.

It also has wider impacts on the likelihood of federal cannabis legalization, which President-elect Biden has historically been tepid about, but VP-elect Harris may choose to make her platform, given the current Democrat control.

With all eyes on the cannabis industry both by investors and consumers, we would like to offer various perspectives from several cannabis movers and shakers who are leaders in their respective fields. 



Throughout January 2021, I had the opportunity to speak with cannabis industry insiders, experts, leaders, operators, and analysts, to get their valuable post-election insights and their unique perspectives on the possible implications for cannabis.

Our esteemed guests sharing their views with Cannabis Law Report on a variety of topics include the following individuals:

Gary Santo, President of TILT


Tom Gavin, CEO of CannaTrac


Emily Flippen, Cannabis Market Analyst at The Motley Fool


Nathaniel Gurien, CEO of FinCann


Derwin Wallace, Cannabis/CBD Investor Relations Authority and FanVestor Director of Crowdfunding Campaigns


Narmin Jarrous, Chief Development Officer at Exclusive Brands LLC


David Kotler Esq. of Medical Marijuana Business Lawyers, LLC


David Metzler, CEO of CBDCapitalGroup


Dr. Stuart Titus, CEO of Medical Marijuana, Inc.


TOPIC— Post-election, what do investors need to know when entering the cannabis stock market?


Gary Santo, TILT: Investors should shift their attention away from footprint and more toward purposeful market penetration and concrete avenues to profitability. This past year, many of the successful operators were those who decided to shun the “growth-at-any-cost” mentality.

In some cases, that was the direct result of scaling the assets they had spent the prior year building, while in others it means having pivots in strategy; however, strength of earnings in the third quarter amongst many of the larger players underscored the continued demand for high-quality cannabis products born from efficient operations.


Dr. Stuart Titus, Medical Marijuana Inc.: Cannabis stocks have been particularly volatile. Canadian Licensed Producers have made headway into the US NASDAQ and NYSE markets, and most US multi-state operators (MSOs) list on OTC markets.  Thus, US companies have fewer institutional investors.  Many cannabis related stocks have risen substantially since October 2020 with many more than doubling in anticipation of positive US federal actions re cannabis legalization.  In spite of this, numerous cannabis stock opportunities remain. 


Emily Flippen, The Motley Fool: Despite an increasing level of popularity of cannabis investments, we’re still in the very early innings of the cannabis industry’s development. Even if governments legalized the sale and consumption of cannabis immediately, it would likely still take half a decade or more for the industry to build out. As such, investors should be prepared for volatility and expect to hold cannabis investments for at least five years, and preferably even longer. 

Additionally, excitement for federal legalization or decriminalization in the United States could lead to retail investors “buying the rumor, selling the news”. This is a phenomena where investors buy assets based on speculation about future actions, and when those actions come to fruition they immediately sell out of those positions. We saw this happen when Canada legalized cannabis at the federal level. 

Between June 2018, when plans for Canadian legalization were finalized, and October 2018, when legalization was passed, Canadian cannabis stocks blossomed. Over-hyped businesses, such as Canadian cannabis producer Tilray (NASDAQ: TLRY), rose in the hundreds of percents.

News outlets initiated “watches” on cannabis companies, providing investors to-the-minute coverage of their movements. However, immediately after legalization and before the end of the year, these same businesses gave up more than half of their value. Today, Tilray is down over 90% from its previous high. 

Investors in US-based cannabis businesses should be prepared for the same hype-cycle if and when the US chooses to legalize cannabis. Buying good businesses with strong cash flow and a highly invested management team can help ensure that investors are not buying the next Tilray.

Investors should ensure that the businesses they’re investing in have a thesis beyond simply industry growth, and understand that the majority of small cannabis businesses may become penny stocks as the industry develops. 


Tom Gavin, CannaTrac: Due diligence is key. Before investing in a company, it’s important to know the company inside and out, which includes doing due diligence on its founders and the beneficial owners. Most importantly, be aware that the cannabis market does hold some uncertainties and can change quickly depending on election results. Make sure you know now the liquidity position as funding may tighten up with the uncertainty of tax regulation changes. 


David Metzler, CBDCapitalGroup: It is still very early days in the cannabis market and the professionals have just entered the market in the last 2-3 years. The big companies are getting more sophisticated, but there are still a lot of issues that you wouldn’t see in more mature markets.

Management teams are getting more sophisticated, but most are still the typical penny-stock players and so the stocks are very vulnerable.  This market won’t mature for the next 4-5 years regardless of legalization, albeit that will speed things up when other industries jump in.


Narmin Jarrous, Exclusive Brands LLC: Cannabis is a brand new industry, which means it’ll have its major ups and downs. As we see legalization increasing across the country, more cannabis companies will come online and choosing the right ones to invest in will be difficult.

Look for vertically integrated companies that set themselves apart from the white noise that is a saturated market. 


Derwin Wallace, FanVestor: Investors for some reason assume the only sector to invest in is cultivation or growing. However, there are many ancillary businesses in the cannabis space to invest in (e.g., cannabis dispensaries, cannabis technology, cannabis media, cannabis real estate, cannabis extraction, cannabis biotech, cannabis edibles, and cannabis agriculture technology).


David Kotler, Medical Marijuana Business Lawyers: Coming from someone who has watched the market since 2014, I would say be careful of volatility and don’t believe every press release. Dig into the facts for yourself.



TOPIC— Post-election: What are your thoughts about the future of the cannabis space as a whole and the corresponding cannabis stock market? 


Santo: The coming years will likely see expansion by operators and consolidation of partnerships in the space. This means adding depth to portfolios (instead of only breadth), which is definitely where we are aiming to grow. TILT’s focus is to assist multistate operators and independent retailers so they can flourish in their select markets. 

The MORE Act, while mostly symbolic, is the latest indication that the cannabis industry’s acceptance into the mainstream national economy is not a question of if, but when. The related impact it will have on the American investment market, M&A opportunities and expansion of brands from the West to East Coast will be significant. 


Gurien: Informed industry consensus for over a year now has been that cannabis de-scheduling (in one form or another) is likely in 2/Q-3/Q 2021. If the Senate flips Democratic, the MORE Act is a near certainty, or a little less likely (since Congress would have to produce new legislation) is full federal legalization in the manner that the 2018 Farm Bill legalized hemp and hemp-derived products such as CBD. 

Under either scenario, the SAFE Banking Act (of minor impact in any event) would become moot. 

In the event, if the Senate remains in Republican hands, passage of the SAFE Banking Act (if Sen Toomey – R-PA remains chair of the Senate banking committee) is near certain, and passage of the MORE Act has a better than even but by no means certain likelihood of passage. Based upon his public statements, President Biden would likely be hesitant to sign the MORE Act, but VP Harris would likely exert effective pressure to persuade him.


Titus: I could not be more excited about the cannabis space and many opportunities remain at a very early ground-floor level. Given the federal legalization and re- or de-scheduling of cannabis, this will remove the onerous 280E IRS taxation of cannabis businesses.  Along with banking capabilities, this should greatly expand markets, employment and job creation – all sorely needed at this time in America.  

The cannabis stock market should continue to flourish as a result of federal legalization, although it remains to be seen if we will keep the current state-regulated model, or switch to a national model, such as in Canada’s Licensed Producer model. 


Metzler: The cannabis market is the next big market. In my opinion, after watching legalization in more states, cannabis is the “new infrastructure” where both Democratic and Republicans agree on its value.  It will be the hot space for the next several years and when cannabis is federally legalized, that will be an even bigger catalyst. 

Our intel is that medicinal use will become legalized under the Biden administration now that Georgia went blue, so that will have a flashbang effect on the industry. That’s why we spun out a data and analytics company called Proven Quality to measure efficacy for people using CBD for insomnia, pain, and anxiety (the big 3 use cases).


Jarrous: To sum it up: excitement. We’ve seen tremendous growth in the Michigan market, on both medical and recreational sides. We saw adult-use cannabis sales grow 482% from January to December, and nationwide consumers spent almost $18 billion on legal cannabis. The industry is just getting started, and as innovation continues to soar, we’ll see more and more companies going public. 


Kotler:  Whether the state by state patchwork can integrate with potential de-scheduling or rescheduling. So much money spent, we can’t knee-jerk without taking into account the structures that have already developed.


TOPIC— What are your thoughts about the specific areas of the cannabis space and the corresponding cannabis stock market that are about to see growth, innovation, development?


Titus: All areas of the cannabis market will experience growth should federal regulations so allow. Already during COVID, we have seen amazing industry growth during 2020 and the top 10 US state markets are projected to show $20.5 billion in annual sales for 2021. Innovation of new products or new delivery methods will always have a place and we expect to see cannabis-based beverages in particular have an amazing and extraordinary run in the future. 


Gavin: As with any industry, companies that are solving issues and providing the industry with value are likely going to bring returns. For the cannabis industry, that currently includes data companies, compliance companies, payment technology innovators, like our CannaCard, and inventory management systems.


Metzler: Everything around research and data is going to be the “must-have” assets and bringing those types of data analytics to the market is going to be the big innovation. When medicinal use becomes federally legalized and rescheduled, research that demonstrates Real World Outcomes, like what we are providing the FDA, is going to be priceless.


Jarrous: Cannabis manufacturers are definitely going to start soaring. Those which produce the top brands in the country may have an edge over retailers. I think we’ll see a huge uptick in not only cannabis companies, but those that are cannabis adjacent. This includes those which provide marketing, banking, and other important services that are currently difficult for cannabis companies to come by. 


Kotler:  We will see continued advancement of the ancillary as traditional activities take root within the space.


TOPIC— What would investors need to know when entering the current cannabis stock market?


Wallace:  Investors should keep in mind the cannabis stock market is very volatile, due to the fact cannabis is still not legal at the federal level. Depending on the news for the week or month, cannabis stocks can increase or decrease. 

Many companies are entering the cannabis space, so there are investors in several companies that can add to their portfolios. Investors need to be very strategic and cautious when investing in cannabis stocks. Investors should not invest in cannabis stocks just because they are cannabis stocks, there are many known and unknown variables that come into play that would make a cannabis company unsuccessful or successful.

I suggest investing in cannabis companies that have met all the Securities Exchange Commission (SEC) quarterly and annual filing requirements, an experienced management team, and a lot of cash on its balance sheet. How can you go wrong with a lot of cash and a management team that knows how to deploy that cash?


Titus: Cannabis is a growing industry and may be compared to the early days of alcohol prohibition – mergers and branding will create “big cannabis” companies to rival the Jim Beam, Seagram’s or Constellation Brands of the cannabis world.

Sales forecasts for the top growing cannabis stocks are all expected to double or more in the coming year.  Top growers and expectations from The Motley Fool:
Jushi Holdings                176% estimated growth
Columbia Care                143%
Curaleaf                          97.8%
Cronos Group                96.7%
Planet 13 Holdings          94%
TerrAscend                       87%
Innovative Industrial Properties    71%
Cresco Labs                      61%
Harvest Health & Recreation        61%
Grow Generation             60%


Metzler: Be ready for a wild ride of high risk and high rewards. There is going to be a ton of consolidation in the market over the next few years, so any public company that has a good management team is going to acquire all the assets they can because they have lower cost of capital. 

That’s why we are rolling up smaller companies that are “proven” to work with Medical Outcome Studies so that we can sell those high-value smaller assets to the big public companies.


Jarrous: Know the products you’re investing in. Something that always worries me is business people treating cannabis like any other industry – it’s truly so unique. You should understand the companies you’re investing in, their vision, and what kind of innovation they’re bringing to their respective markets. 

We’re inching towards the point where there will be a cannabis shop on every corner, and before the market is flooded you want to make sure you’re investing in a competitive brand. 


TOPIC— Please tell us your thoughts on the Georgia election results and what they might mean for the cannabis sector.


Flippen: Given widespread public support from voters for cannabis reform a federal legalization bill is not off the table. However, support for federal legalization has varied more within democratic representatives than their constituents, meaning more moderate changes in cannabis legislation could be more realistic than federal legalization. 

With Democratic control of both chambers of Congress, the most immediate opportunity for cannabis businesses is cannabis decriminalization, which offers greater prospects for US-based cannabis companies when compared to their Canadian peers. 

When taken at face value, decriminalization wouldn’t change the economic environment for cannabis companies, however if a decriminalization bill takes a similar form to that of the STATES Act it could reform cannabis tax laws. 

Currently, US cannabis companies abide by section 280E of the internal revenue code, which prevents businesses engaged in illegal trafficking from deducting normal expenses when determining taxable income. If a decriminalization bill addressed the issue of trafficking cannabis across state lines it would decrease the taxable income for legal cannabis businesses, dramatically improving the picture of profitability for many large producers. 

While the opportunity to expand into the US if federal legalization occurred could be attractive to Canadian players, the more immediate opportunity is in US-based growers. For instance,  US-based Green Thumb Industries (OTC: GTBIF) and Canadian grower Aphria (NASDAQ: APHA) have each pulled in $455 million and $430 million, respectively, in total revenue over the past twelve months. 

However, Green Thumb paid $61.6 million in income tax expense versus $2 million for Aphria. There are immediate financial implications for US-based producers should US tax laws be adjusted that may more accurately reflect their true long-term profit-making potential.


Santo: The Georgia race definitely changed the landscape for cannabis reform in 2021. Even with a Biden presidency, the focus is very much on the Senate, which ultimately holds the fate of legalization and other reform efforts.

With Democrat control, there is a much better chance for comprehensive reform. This, alongside the Biden/Harris win and recent state legalization measures, has significantly improved the cannabis industry outlook. A November Gallup poll shows that public support for legal cannabis is at an all time high (68%), further highlighting the steady incline of its acceptance.


Gurien: Prior to Georgia, if the Senate remained Republican, in my opinion, we had a somewhat better-than-even chance that we would get de-scheduling in the middle of the year because of the overwhelming majority of the of the senate privately has no problem with it. They just don’t want to pay the electoral consequences. 

They have a high level of confidence that what they get done in a non election year will be overshadowed by the issues that come up during the election year, so they could probably get away with it without much cost. Basically, we were looking at the middle of 2021 after the Presidential election, and all that died down as being 100% likely.

I think that there was a pretty good chance that we would get de-scheduling anyway; however, now with a Democratic Congress, I would say that it is a near certainty that we will approve the MORE Act, essentially saying that if the state has a has a legal program, it becomes de facto federally legal within that state, which is not quite federal de-scheduling —but it’s pretty good from a practical point of view. 

On the other hand, with a Democratic Congress, they may actually have enough motivation to do this right. And the right way to do it would be to forget about the pending compromise Acts that are in Congress, and just write a bill that says it’s de-scheduled. Next, here’s some taxes and regulations, and they would probably do something along the lines of the 2018 Farm Bill, perhaps. 

Of course, it’s going to create regulatory chaos naturally, because they haven’t, in the last two years, come up with proper regulations for CBD —either financial, or sales, or commerce— and this is two years later and they’re still tinkering around with that.

In the meanwhile, if we get de-scheduling in the middle of this year for cannabis, then they’ll probably do the semi-responsible thing, and after de-scheduling cannabis  it will be a regulated agricultural crop without a regulatory framework. Again, and I don’t know how long it’ll take for them to straighten that out. 


Titus: Georgia Senate elections have now flipped the Senate majority to Democratic control, and it is assumed that Chuck Schumer (D-NY) will become Senate Majority Leader.  The prior Senate majority leader, Mitch McConnell (R-KY), would not allow any marijuana-related legislation to come up for vote but Schumer is far more pro-marijuana. 

Although McConnell was pro-hemp and got the Farm Bill of 2018 to include many hemp-favorable provisions – we expect that federal cannabis reform will be championed under Schumer’s Democratic-controlled Senate.  


Metzler: The results of the Georgia elections are a game changer for the cannabis sector.  Mitch McConnell has been blocking cannabis because of his connections to the hemp producers in Kentucky, but now that he is no longer the Speaker, he can’t block the momentum.  Like I said, it is most likely medicinal use will become federally legalized and states will have the right to do recreation at their own discretion.  Look for initiatives like the SAFE Banking Act to go through to make banking federally legal, which will allow Private Equity companies like us to lever the assets and lots of capital will come flooding into the sector.


Jarrous: The Democrats gaining a majority in the Senate means that cannabis legislation, including the MORE Act and SAFE Banking Act, may actually see the light of day. Hopefully this means that cannabis companies around the country will be treated as other companies are, and gain the support they need to continue to thrive. 

We’ve seen cannabis companies prop up their communities as they were deemed essential businesses, but have seen little support in return.




TOPIC— What are the biggest challenges that cannabis currently faces? 


Kotler: Regulation and cost to start making it more and more unobtainable for most and keeping prices up, that’s allowing black market to continue.


Santo: Access to normalized banking as well as more traditional forms of capital continues to be a major issue. The SAFE Banking Act will help reduce the costs and inherent risks associated with the former, however, while the capital markets are improving for cannabis companies, premiums paid by cannabis companies persist.

Sale-leasebacks have filled some of the funding void, however, it has been encouraging to see some of the more recent transactions providing more cost-effective methods to access non-dilutive financing. In addition 280E holds back cannabis companies from deducting “business expenses,” as adult-use products are considered illegal on the federal level.


Titus: Federal illegality, the IRS 280 E, banking barriers and the need for more lab testing and quality assurance.


Flippen: Many cannabis professionals will tell you that the biggest challenge for the cannabis industry is a lack of clear regulatory policy or access to safe and reliable banking. While these are genuine concerns, and you cannot expect to have a thriving cannabis market while these problems persist, these are also issues investors can expect to be remedied as Washington reforms cannabis policies.

The biggest challenge that both the cannabis industry and investors face is the stigma associated with cannabis consumption. This pervasive stigma, which has existed in American society since the Mexican Revolution, is a much harder problem to fix. 

Legitimate and legal cannabis businesses have to educate users about its products, paying for information campaigns and self-funding research, all to change an ingrained perception of cannabis in many consumers’ minds. 

Supporters of legalization may have negative associates of frequent cannabis users and institutional investors may have preconceived notions about investing in legal cannabis businesses. Expect for businesses to continue to spend money to re-educate investors and users about its products. 


Metzler: On the private smaller side, there is still a lot of fraud.  That’s why smart investors put money into us because they want a shield between us and less trustworthy players in the space.  My team is made up of a lot of veterans, so we are used to protecting people (and already have done that in the 2 years we have been in the market).


Jarrous: The regulatory setbacks due to the lack of federal legalization are so difficult. Cannabis companies struggle to jump through these hoops every single day, and these obstacles make it harder and harder for small businesses to succeed in the industry. You can do absolutely everything by the book and still wake up to every bank account you own shut down. It’s a very difficult way to live. 

There’s also the lack of raw goods to meet market demand – Exclusive Brands is doing its best in Michigan to help secure the supply chain by opening new indoor and outdoor grows, but we need more companies dedicated to the overall success of the industry to keep this going. 


TOPIC— Something people don’t realize about running a Cannabis operation in a federally illegal — state legal divided country? Anything especially difficult?


Titus: Challenges include paying and keeping employees, 280E accounting, regulatory compliance of your dispensary building and product/cash safe storage, and product labeling.                                     


Metzler: Capital and banking is still offline and not available. Even after 2 years after the Farm Bill made hemp/CBD legal, there are still not consistent banking solutions.  That means companies are paying 3.0-6.0 percent per transaction.  


Jarrous: Everything is difficult. Particularly, banking. We’ve had employees who have had their bank accounts shut down just for accepting a paycheck from us. This makes no sense, especially since those paychecks are federally taxed. So these people are supporting both the state and federal governments, but are being treated like criminals and having their accounts shut down. This makes it increasingly difficult for them to just work and support their families. 




 TOPIC— How do you see state to state trade of cannabis / hemp in regulated states?


Titus: We assume there will be special regulations for inter-state commerce of cannabis and hemp products. Interstate commerce of cannabis will likely be regulated by special federal laws – or each state may require out-of-state suppliers to register and pay taxes, fees upon product being delivered into the state.                


Metzler: States are making their own policies in light of not having guidance from the FDA, so it’s still fairly confusing. Our intel suggests a policy decision in the next year from the FDA, which is why they have asked us to expand the Medical Outcome Studies we have been doing to share the data with them.


Jarrous: It’s going to be difficult for the foreseeable future. While my greatest wish is to see cannabis decriminalized and legalized nationwide, unfortunately I think we’re a long ways away from interstate trade due to not only federal laws, but the stigma around the subject from state to state. This is absurd, of course, considering the overwhelming amount of people who support cannabis legalization nationwide on both sides of the aisle. 


TOPIC— How do you envision international trade with regard to cannabis both on import and export. 


Titus: Each country would likely have its own regulations, requiring each supplier to register and pay fees, taxes. 


Flippen: It is too early to tell how different governments will handle international trade. For instance, despite the Mexican Supreme Court legalizing adult-use cannabis last year, legislators have yet to dictate rules or a framework for trade and cultivation. It is possible that as new countries legalize, protectionist policies may limit foreign ownership and investment as well as international trade. 

On the flip side, we’ve seen a robust medical market crop up in Europe that seems more open to flexible international trade, with many Canadian producers opening facilities in countries like Portugal to serve the European medical market. If new countries take an open stance to international trade, expect for more cultivation to shift into warmer climates. 

Based off of current cultivation facilities, the cheapest option for cultivation on a per-gram basis is outdoor growing. Colder northern climates, including Canada, have inherent limits to their growing seasons, meaning producers that grow there are attempting to predict product demand quarters ahead of time.
If a market for international trade of cannabis emerges, it may make more sense for producers to shift cultivation into southern climates with year-long growing seasons that make best use of the cheaper costs of outdoor cultivation.


Metzler: It’s very confusing still, and on the cannabis side we don’t see a lot of short-term or midterm potential there (i.e. products are not coming from Canada to USA) and, for that matter, they are not going across states. Until international trade is federally legal, there is not a lot of potential for international trade on THC.  There is different conversation for hemp/CBD as you can see in Europe with the Novel Food certifications.  


Jarrous: I think we’re a long ways away from that, but I hope that international trade would lead to a wider variety of products being available. People always joke that are current selection is too wide, and there are too many options, but I think it’s great for increasing accessibility to cannabis. We need cannabis accessible to the greatest amount of people possible, in terms of geography and socioeconomic status. We want affordable weed for everyone!


TOPIC— If being managed on a state to state basis, how do you envision services under this regime, like banking? —insurance? —intellectual property?


Titus: Banking and insurance will follow appropriate state laws, similar to other businesses. 


Gavin: Until cannabis is fully legalized or rescheduled, many industries will continue to face the major hurdles they are currently trying to overcome in servicing the cannabis industry. Because of that, business will continue as usual in the banking, insurance and other industries until we see that landmark legislation passed. 


Jarrous: I like the idea of banking and insurance being opened up, so that cannabis companies have more options to choose from. The market is very limited in these two sectors, and having more options benefits cannabis companies and their employees. 

I would also hope that would mean more cannabis companies would be able to offer things like employer-sponsored health insurance, retirement planning, and other related benefits.
However, I do think it could be a challenge from a regulatory standpoint. States are likely to greatly differ on cannabis legislation, and companies trying to standardize their processes for interstate markets is going to be a compliance nightmare.


TOPIC— How do you envision the courts managing state vs federal?


Titus: I assume this will be the usual nightmare with a number of cases serving as precedent. I cannot imagine regulations that are set by current state regulators will cover each and every nuance, or how will new cannabis product categories be regulated? 


Jarrous: In an ideal world, we’d legalize and decriminalize on state and federal levels. Since I’m growing more cynical by the day, I think we’ll see a lot of problems with federal courts processing marijuana charges depending on how we choose to reschedule cannabis. There’s a lot of speculation on whether the new administration will defer to the DEA on scheduling cannabis, and if we don’t leave the science to the scientists, I fear it’ll be a long time before we begin to repair all the damage the war on drugs has done, particularly to BIPOC communities. 


TOPIC— What do you see in the Cannabis landscape that needs to be improved, perfected, or achieved in the future?


Flippen: Regulatory policies from governments looking to legalize recreational cannabis or create robust medical cannabis programs are vitally important to the development of the cannabis industry. We have yet to see a truly thriving recreational cannabis market on the international stage, in large part to regulatory uncertainty.

Investors may point to the Canadian recreational market as the first example of a successful rollout of cannabis legalization; however, over-regulation and licensing issues has allowed an illicit market to continue to thrive while also preventing legal cannabis businesses from developing product awareness.

We’ve seen a move in the opposite direction in the United States, where under-regulation in some states has led to commoditization of cannabis products without regards to product quality and form. While it may be too soon to tell what characteristics provide for a thriving cannabis market, history tells us that a proactive and trusted regulatory system alongside a free market that encourages competition can be a good starting point.  



Titus: The biggest improvement will be to run cannabis businesses as regular businesses – without the discrimination re banking, employment and taxation. 


Gavin: The cannabis industry will not be accepted as a “legitimate” industry until the negative stigma associated with cannabis is removed. While this will take work in many capacities, rescheduling or de-scheduling cannabis is an essential part of the solution.


Metzler: In order for the cannabis landscape to be improved, we need to see more banking opportunities and good management teams, like ours, that have a history of working industries such as CPG, Technology, Healthcare, etc.


Jarrous: Like many other industries, we need to give up on the typical “boys club” mentality. It’s outdated and frankly, it’s boring. There are so many women with incredible ideas and products, who have to fight ten times as hard for the same representation at speaking events, investment tables, and in the press. 


Wallace:  The cannabis industry lacks leadership and experienced management teams. Let us be honest, many of the people in the industry were growing illegal cannabis before the states started to legalize cannabis. Now those same people are managing publicly traded companies. To manage a publicly traded company you need to have prior experience. One example of this is financial disclosure. 

The Securities Exchange Commission (SEC) which governs or regulates publicly traded companies have certain requirements that publicly traded companies must adhere to. The SEC requires publicly traded companies to regularly disclose significant financial and other information, so investors have timely, accurate, and complete information. 
If a cannabis company’s management team does not have experience in financial disclosure to the SEC, trading of their stock would be halted or suspended permanently. This scenario could potentially cause your stock to be worthless.




TOPIC— Tell me about your personal vision for the U.S. cannabis program in the next year? 


Gurien: Well, I concluded, and I did this with a lot of consensus with a lot of my colleagues about two years ago, that the middle of 2021 was when we could expect them federal de-scheduling of cannabis. The only thing that threw me off that projection was the unknown factor of COVID, with its distractions and permutations that might equal people not being particularly that interested in cannabis, because they were busy with other things. 


Titus: Federal regulation of cannabis, which will be rescheduled. Banking, merchant processing and the onerous 280E tax burdens should be lifted. Hemp and CBD to be sold as a dietary supplement, food ingredient as well as the national blanket approval of hemp smokables. 


Metzler: Our vision for the U.S. cannabis program in the next year is to demonstrate efficacy of brands that work, which we call “Proven Quality” brands.  This is the gold standard that is missing in the industry and smart investors should only put money into companies that are actually proven to work for removing pain and suffering.

That’s what we are doing and it has the opportunity to change the industry by moving it from testimonials to outcomes.


Jarrous: I think as we continue to educate people on cannabis’s many therapeutic benefits, we’ll see both the medical and adult-use sectors grow in sales. I also think we’ve hit the tip of the iceberg when it comes to product innovation – I hear new amazing ideas regarding cannabis products and how we can integrate them into our everyday lifestyles every single day.


Wallace:  I think cannabis companies will continue to grow at the state level. However, the cannabis industry will continue to stall at the federal level. Due to the Coronavirus and a struggling economy the federal government will be quite occupied and cannabis legislation may be a low priority. Although, this may be an opportunity for investors to add cannabis stocks to their portfolio at low valuations.

If there is a sense in the markets that the federal government will legalize cannabis, stocks may increase significantly and abruptly, and it may be too late to purchase cannabis stocks at that point.  


TOPIC— In the next 3 years?


Jarrous: I hope we see companies increasing their social equity efforts as a result of cannabis legalization and decriminalization. This would include helping those who are decarcerated benefit from the industry that they were jailed for participating in. Whether that be through mentorship programs like the one being developed at Exclusive Brands, or through special investment funds, I hope we’ll see the cannabis industry taking accountability for these people. 


Titus: Say goodbye to the current state-by-state dispensary system as everything will be regulated at the federal level. States will be able to add on in-state taxes. There will be national producers and national distribution licenses. 


Metzler: Direct to the door products that are “proven” to work for health conditions.  Once that happens, the industry has the opportunity to threaten the pharmaceutical companies and they will move into the sector with force.


TOPIC— How do we get from here? 


Titus: The usual political wrangling and political payoffs. “Big Cannabis” will emerge with many non-cannabis industry leaders wanting a piece (i.e. Constellation Brands, tobacco companies, pharma companies all wanting a piece of the cannabis pie). 


Metzler: Medical Outcome Studies like what we did with our brands and shared with the FDA.


Wallace:  The states will get us there. As more states legalize cannabis, the federal government will eventually be forced to legalize cannabis at the federal level. As states increase tax revenue from cannabis, it becomes addicted to cannabis tax revenue and that revenue eventually becomes part of their state budgets. 

States now have an incentive to fight for the federal legalization of cannabis. Prior to the states legalizing cannabis, citizens were fighting alone for the legalization of cannabis, but now states and politicians with more power and influence have joined the fight.       


Jarrous: By holding the brands we love accountable. By asking them how they are benefiting their communities. By understanding what their mission statements are, how they hope to achieve them, and making sure we see concrete results. It also means leveraging whatever power we have to encourage our legislators to do what is right, listen to their constituents, and decarcerate. 


TOPIC— What one thing you do in your line of work that you feel makes the most impact? Why does this make the most impact? 


Santo: We maintain the belief that the progression of the cannabis industry is not only vitally important for providing patients with the care and quality they deserve, but also to spur job growth and generate significant tax dollars, especially at a time when the larger community faces extreme economic hardships.

This, alongside imperative social justice initiatives, would open up the country to a flood of significant opportunities while driving important change within communities.


Titus: Although it is far too early to say, I believe that new cannabis compounds and new products will emerge that will improve on consumer acceptance. We do not necessarily think of drinking alcohol as “healthy” but soon it may become just that. Similarly, we do not think of smoking cigarettes as “healthy” but again, soon it may become that. 

I believe that cannabis has the ability to change the face of healthcare and preventative care as we currently know it, adding quality of life, lower incidence of disease and longevity to our population. New cannabis processing technologies will be the rave of the future.


Flippen: Most institutional investors are either unwilling or unable to invest in state-legal cannabis businesses because the substance is still illegal under federal law. As such, investing in cannabis businesses is one of the few industries that is truly driven by retail investors, many of whom are uneducated about the realities of cannabis investing. Media attention may point retail investors into over-hyped cannabis businesses with very little real assets and a lack of long-term strategy. 

Investors that do take time to dig into these businesses financial statements may lack understanding of the nuances of biological asset accounting rules that can dramatically overstate a business’s profitability and margin profile. 

For me, the single most rewarding aspect of managing a cannabis portfolio is having the ability to educate our members about how to differentiate ‘good’ the cannabis businesses from the ‘bad’ and remind them about the power of long-term investing
My number one priority is dispelling the noise that exists surrounding many cannabis investments and teaching investors that buying businesses with strong financial performance and clear competitive advantages and holding them for the long-term will outperform hype investing and day trading. 


Metzler: My background includes a previous healthcare venture that was backed by United Health Care. This gives me an understanding of what outcomes mean to an industry.  We are bringing outcomes to the industry with a goal of delivering 100 million doses of products that are proven to remove pain and suffering.  Once we accomplish that, I will feel like impact has been realized.  


Jarrous: Create products that cater to every need. We don’t create our new brands by figuring out what has the highest profit margin – we try to figure out exactly what people wish they got out of their cannabis. I founded our new line, Neno’s Naturals, with the tagline ‘Cannabis for Everyone for a reason; I want to make sure every consumer has a product that is complementary to their lifestyle.

The products created were based around my own needs as someone with a chronic pain condition, who works a high pressure job where I have to stay sharp every second of the day. 

“There’s a product for that” is the new “there’s an app for that.” This makes the most impact because people rely on us to improve their quality of life. Where traditional medicine has failed them, we come in. I think in a few short years cannabis will be the new “modern medicine.”



TOPIC— What is the best advice or words of wisdom you can offer to other individuals and companies in the current U.S. Cannabis space to help their teams and companies and brands to thrive?


Santo: Focus on making a meaningful impact on the markets you serve, and commit to those markets. The goal should be to become the best you can be in your area of operation. Too many cannabis companies are quick to expand their footprint while not considering the long term profitability of this expansion, mistaking growth for success.


Titus: We believe the science of cannabis will continue to support people’s anecdotal usage of cannabis. Many use cannabis for pain relief, as a sleep aid or to counter inflammation. As research demonstrates these benefits to the medical community, cannabis has the ability to replace about 40% of all pharmaceutical medications. Over time, we believe demand will only increase, so for those in the industry, position yourselves to take advantage of that future growth, reaching new consumers who may like to give cannabis a try. 


Our industry is “onto something” when consumers can get all the medically prescribed painkillers they want – all covered by insurance.  Yet multi-millions of consumers prefer to drive to their local dispensary, pay cash out of pocket to get cannabis, as it works better and without the side effects.  So, let the trend become your friend.  Analyze the consumer: why are they really in this dispensary and why are they really buying my product?  Build upon that. 


Metzler: Have a consumer-centric framework and show that your products work using data. If you do that like we do, you will be able to truly help a lot of people like this industry can do.


Wallace: Manage salaries and other administrative expenses. I see many cannabis companies with high cash burn rates. It is not their money, its capital they received from investors, so they spend it unwisely on salaries and other administrative expenses. The capital should be used to grow the business. 

If management teams are using most of its capital for salaries and other administrative expenses, then it is not deploying the capital into things that would increase the company’s growth. Eventually investors will get frustrated and stop investing in the company and the company will go bankrupt.   


Jarrous: Get to know your employees. Every single one. They make your company what it is, they bring your vision to life, they know how much you care (or don’t care) about them, and it’ll always reflect in their work. 


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