How Cannabis Companies Can Succeed: ‘Funding Is Hard to Get,’ But Relationships Hold the Key

Recently Benzinga Cannabis Capital Conference, Tony SchorCEO of Investor Alertprovided a clear analysis of the challenges and opportunities facing cannabis companies, particularly in terms of mergers and acquisitions (M&A). Schor, an expert in the cannabis industry, discussed how companies are dealing with financial constraints while finding ways to save money and grow in a growing market.

M&A activity continues in Cannabis

Schor pointed to renewed interest in companies with strong revenue streams as mergers and acquisitions increase. “People want to make money, not that they are worried, but cannabis companies that make money,” he said, noting that investors are hoarding these assets for future sales opportunities.

Schor emphasized that the M&A landscape is changing. “It’s not the big MSOs that are doing the deals, but the young independents and cannabis users who have left are now coming back into the space,” he said.

City Problems Still a Big Obstacle

A recurring theme in Schor’s discussion was the difficulty for companies to raise funds, regardless of their size or market position. “Money is hard to come by,” he stressed. Both public and private cannabis companies are feeling the pressure, with public markets offering limited growth opportunities and private companies struggling to find institutional capital.

“Private companies make money, but their end game is advertising,” Schor added, highlighting the long-term goals that many cannabis businesses have. However, the lack of access to federal banks presents a major challenge, limiting growth. “Without the reforms of the state banks, the institutional support is always absent,” said Schor.

The Power of Cooperation

Schor concluded with a call to action for cannabis businesses to adopt partnerships to overcome financial challenges and expand their operations. He emphasized the importance of collaboration in the industry and offered practical advice for retailers looking to enter new markets. “The only way this industry can survive is if you talk to someone new and discuss potential partnerships and collaborations,” Schor said.

Partnerships can be a way of life for companies that want to grow without heavy financial investment. “Maybe you are a brand in Colorado and you want to go to other markets, but you don’t have the capital. Find another brand or production partner in another market,” Schor said, highlighting how businesses can grow without taking too much financial risk.

Schor’s comments at the conference provided a road map for cannabis companies struggling with financial problems and looking for ways to grow. By focusing on generating revenue, managing financial constraints, and strengthening partnerships, cannabis businesses can position themselves for success in an increasingly competitive environment.

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