As The Legal Cannabis Industry Turns A New Leaf, Canada's LPs Turn To This Woman

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With only a few days before the inaugural Cannabis Capital Conference kicks off at Toronto’s Arcadian Court, we spoke with a key player in the cannabis industry’s professionalization and emergence into the mainstream.

Shaila Mehta is a more than 20-year veteran to public accounting and professional auditing, previously specializing in the manufacturing and alcohol industries. However, only a short three years ago, she was brought on to audit one of the very few publicly traded licensed producers (LP) in then burgeoning cannabis industry.

“From there,” Mehta said, “I started to do a lot of research and evolved to a full supporter of cannabis and the health benefits it offers. I then became the audit partner for three other cannabis companies, one of which I took public in the Spring of 2018.”

Mehta now works primarily with cannabis producers as an audit partner with Grant Thornton LLP. Scheduled to speak at this the Cannabis Capital Conference’s Beyond The Grow: Executing on Unique Cannabis Business Ideas panel, we took the opportunity to speak with Mehta prior the event to get more insight on her path to the cannabis industry.

Time Enough To Grow

A lot has changed in those intervening three years, for both the cannabis industry and for Mehta’s clients. As more and more of Canada’s 115 LPs emerge into public equity markets, the industry’s expectations and norms have shifted dramatically.

“I’ve seen a lot of evolution in this industry in the past three years,” recalls Mehta. “There is more knowledge that is being shared through public means and the sheer increase in the number of LPs is helping provide some data — albeit still light — to those in the industry.  In addition, the emergence of all of the ancillary services — distribution, education, workplace safety, etc. — is further expanding the industry.”

Mehta specifically pointed to Canada’s still recent decision to become only the second nation after Uruguay to decriminalize cultivation and use of the plant. Before this, she witnessed some creative methods of bookkeeping among some of her early clients.

Said Mehta, “The main auditing challenges faced by cannabis producers have typically related to accounting for the plant and accounting for any complex transactions companies have entered into. The newness of the industry and the creativity of those in the industry has resulted in somewhat non-traditional types of contracts being entered into. For example, the traditional purchase and supply agreements might be modified to incorporate non-cash measures and rewards. I have seen a lot of very unique arrangements!”

The Great Green North

Of course, Mehta’s attention, and the eyes of an industry that’s projected to bring in $4 billion yearly, is turned toward Canada. The June passage of the Cannabis Act, set to go into effect this October, marked a massive change in the potential of LPs and other segments of the market to flourish. Mehta emphasized just how enormous the legislation is, and the impact it could have down the road.

Calling Canada a “trailblazer,” Mehta highlights what that country’s legalization portends for a worldwide cannabis industry that may follow. “There is a lot of support for this industry and, to date, the Canadian industry has operated within the boundaries.  Having a legalized recreational market for the size of our country is a huge statement and we have the ability to transfer our knowledge across the world.”

However, Mehta also provides two points of uncertainty facing the industry's growth. First, she cautions that Canada will be held as an example to other countries considering similar legalization.

Mehta said, “Canada has the ability to be the poster child in its execution of legalized recreational cannabis.  It is going to take a lot of effort by the cannabis companies to ensure all facets of the industry are pristine. From delivering proper education to the public, having knowledgeable staff selling product at the retail site, establishing frameworks to address safety.”

Mehta’s other concern? The industry taking its momentum for granted.

“Cannabis companies need to start, if they haven’t already, preparing for the next level of cannabis,” Mehta explained. “No longer will the lucrative investments be in LPs, but instead, in the research and development of creative products.”

Shaila Mehta is scheduled to take the stage alongside the CEOs of Province Brands, Cresco Labs and Medicine Man Technologies this Friday in Toronto at the Benzinga Cannabis Capital Conference. To hear more and to meet with some of the most prominent figures in the Cannabis space, grab your ticket now.