EXCLUSIVE: California Cannabis Investor Takes Page From Warren Buffett's Playbook — 'Trust Is Everything'

The California-based cannabis extract producer PaperPlanes has one major problem: a lack of liquidity, CEO Paul Weiss told Benzinga's Market Spotlight: California conference Thursday. 

"Liquidity is the key and there's very little in the system right now," he said. 

As a smaller producer, Weiss said PaperPlanes has a different objective than large cannabis companies and is not subject to macro trends. 

"You'll hear a lot of talk about how terrible and difficult things are in California. We aren't really experiencing that," Weiss said. "We actually think it's a very fertile place and we see the future as very bright." 

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‘Respect For The Investor Has Gone Down Considerably': California's cannabis market is challenged by a lack of growth in jurisdictions, said Morgan Paxhia, managing partner at the cannabis investment fund Poseidon. 

Sacramento has been slow to force more jurisdictions to open to cannabis businesses, and the pace of capital flow has slowed as a result, he said. 

"We need more access. That's a very primary function in a successful cannabis program."

At the same time, California's cannabis sector has a positive energy that is encouraging to see, the cannabis investor said. 

Paxhia said he's been a fan of Warren Buffett's Berkshire Hathaway since he was a kid, and noted Berkshire built its business on companies with leadership teams it could trust. 

"Respect for the investor has gone down considerably. I would like to see that come back," he said, adding that more capital would follow. 

"Trust is everything. There's got to be more respect and trust in the system, and that's something we all should be working for."

California's Cannabis ‘Cockroaches': Ford Smith, the founder and CEO of the cannabis venture capital firm Ultranative, told panel moderator Tiffany Richardson of Crowe LLP that his firm taps oil and gas wealth from Texas for seed money — and California could learn a thing or two from the Lone Star State about tax structure. 

"The people that are here are really the cockroaches. We're not supposed to be here. Against all odds, we're here," he said of California's cannabis market. 

The cannabis investor said he'd like to see policy reform at the federal level that disincentivizes the illicit market.

Related Link: Ultranative Founder: Psychedelics And Cannabis As ‘Vital Medicines’

PaperPlanes CEO Paul Weiss, third from left, speaks during a panel Thursday, Feb. 22, 2024, at Benzinga’s Cannabis Market Spotlight: California in Culver City. Photo by Dustin Blitchok.