The upcoming Benzinga Cannabis Capital Conference in Chicago on Sept. 27-28 will shed light on a transformative trend: distressed assets in the form of companies shifting from a vertical integration model to an asset-light approach.
A key panel will feature experts including Michael Hogan, partner at Armanino, Scott Moskol, partner at Burns & Levinson, and Janet Jackim, partner at Zuber Lawler, who will discuss how to capitalize on emerging opportunities amid regulatory challenges and limited access to capital.
From Vertical Integration To Asset-Light, Illiquidity And Distressed Assets
As the sector matures, distressed businesses are being scrutinized for fundamentals and financial performance. A paradigm shift is underway, favoring companies with robust operations, management, and profitability.
This transition is exemplified by cannabis firms departing from the Hemp and CBD market in the U.S., such as Aurora ACB, Canopy Growth CGC, and Cronos Group CRON.
In addition, liquidation events and court-supervised sales are providing an avenue for acquisitions. A notable example is Parallel, a prominent cannabis operator, which recently encountered operational challenges and engaged in a legal dispute with cannabis REIT IIP IIPR over a substantial $8.5 million debt.
Understanding Distressed Cannabis Investment Dynamics
For investors to effectively assess value and risk, evaluating operational and financial performance is vital. This involves understanding overhead costs, pricing, operational efficiency, reputation, product quality, brand value and the regulatory framework.
As distressed companies consider restructuring or asset sales, tax implications loom large. High tax rates and unique financial challenges have driven operational success into a cash crunch.
These shifting conditions facing the cannabis industry will be discussed at the Benzinga Cannabis Capital Conference so you won't want to miss out. Join us in Chicago this September 27-28. Get your tickets today before prices increase and secure a spot at the epicenter of cannabis investment and branding.
Photo by Hilbert Hill on Unsplash.
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