'The Biggest Opportunities For Investors Outside AI': Optimism Reigns At Benzinga Conference Amid Talks Of Cannabis Rescheduling, Tech Advances

"We're finally on the cusp of something big," said George Archos, CEO of Verano Holdings VRNOF, during his keynote at the Benzinga Cannabis Capital Conference in Chicago this week. That optimism echoed throughout the event, where more than 2,000 cannabis industry leaders, investors and advocates gathered at the Marriott Magnificent Mile to discuss the future of the industry. Federal reform, market adaptability and technological innovation were the central themes, with many seeing 2024 as a pivotal year for cannabis.

The conference, hailed as a must-attend event in the cannabis industry, featured high-profile leaders like Ross Gerber, Boris Jordan, Jim Belushi and Ricky Williams, who all weighed in on what's next for cannabis as the industry looks toward potential game-changers like rescheduling and the SAFE Banking Act.

Federal Reform: The Catalyst Everyone's Waiting For

At the heart of the event was the anticipation surrounding federal reform, particularly the potential for rescheduling cannabis from Schedule I to Schedule III. This move could lift a significant burden off the industry, especially when it comes to taxation under Section 280E, which currently prevents cannabis companies from deducting ordinary business expenses.

Archos captured this sentiment, noting that rescheduling would not only relieve tax pressures but also mark the "first big domino to fall for further reforms like banking access.” He added that Verano, which operates in 14 states, is well-positioned to capitalize on these changes but emphasized that adaptability is crucial in such a fragmented regulatory environment.

Ross Gerber, CEO of Gerber Kawasaki Wealth and Investment Management, shared his positive take as well. “I think cannabis is one of the biggest opportunities for investors that exists today outside of things like AI,” he said, stressing that rescheduling alone could "double the value of all cannabis companies" by easing tax burdens and attracting younger investors eager to support the sector.

Former U.S. Senator Cory Gardner and former Representative Ed Perlmutter, both longtime advocates of cannabis reform, expressed hope for the passage of the SAFE Banking Act, which would provide much-needed access to banking services for cannabis companies. Gardner highlighted the growing bipartisan support for the legislation, calling it "just good governance."

Market Realities: Surviving And Thriving

While federal reform was the focal point, many speakers also addressed the current challenges of running a cannabis business in today's market. Boris Jordan, executive chairman and CEO of Curaleaf Holdings CURLF, discussed how the company has navigated the macroeconomic pressures of 2024 by streamlining operations and cutting costs. “We've made massive progress in recent weeks,” Jordan said, pointing to Curaleaf's plan to introduce a new three-year strategy for growth heading into 2025.

Jordan also touched on the proliferation of hemp-derived cannabinoids, which he said are contributing to price compression in the regulated market. Despite these challenges, Jordan expressed optimism about Curaleaf's future, especially with the company's European expansion set to double in size next year.

Charlie Bachtell, CEO of Cresco Labs CRLBF, addressed the unique pressures facing cannabis businesses due to high taxes and limited access to capital. You're constantly trying to forecast where this industry is headed and at the same time, understand the industry that you're in today," Bachtell said. He emphasized the importance of efficiency, advising companies to "get more juice from the same squeeze."

Todd Harrison's Take

Veteran cannabis investor Todd Harrison offered a candid yet balanced take on the state of the cannabis industry. In his Cannabis Confidential newsletter, Harrison acknowledged the harsh realities of the ongoing bear market but emphasized the strong turnout at Benzinga's conference as a positive sign. “That's a lot of people, for a bear market, in this economy,” Harrison remarked, referring to the more than 2,000 attendees who gathered in Chicago.

While Harrison recognized the challenges of navigating federal prohibition and the absence of capital market access, he also highlighted the transformative potential of upcoming reforms, particularly rescheduling and the SAFE Banking Act. “If we get S3/SAFE/Garland (+Florida), we're goin' Sizzler,” he wrote.

Harrison also pointed out that, despite uncertainties around timing, federal reforms could unleash a wave of investment and significantly improve the industry’s financial landscape. Referencing the AdvisorShares Pure US Cannabis ETF MSOS, he noted, “A move through $8.20 would trigger a technical breakout,” adding that while the path forward isn't easy, there are major catalysts on the horizon that could turn the tide for cannabis companies.

Cultivated Insights: Learning From The Industry’s Veterans

Jay Rosenthal, co-founder of Cultivated, reflected on the mood at the conference, noting, "Rough seas make stronger sailors. Tough times build greater people." He emphasized that companies surviving in today's tough environment are becoming more refined in their operations. "Companies are getting a lot better and sharper in their verticals,” Rosenthal observed, pointing out that while the industry is experiencing challenges, those still standing are poised for future success.

He also noted the presence of both veterans and newcomers at the event: "If you've been in the industry (and you're staying), you have sailed rough seas.” For the newcomers, he hoped they would learn from the more seasoned attendees, remarking that while the future is uncertain, the companies that survive these tough times are becoming stronger.

Technology And Personalization: The Future Of Cannabis Retail

Technology also played a significant role in the discussions, particularly the power of data-driven personalization in cannabis retail. Kyle Sherman, CEO of FlowHub, emphasized how technology is shaping customer experiences. "We're getting to a point where technology has matured enough to create a truly personalized customer experience," Sherman said.

Alexa Alianiello, head of cannabis at X (formerly Twitter), discussed how the platform is leading the charge in cannabis advertising. “We are a safe space for conversation around cannabis," Alianiello told the audience, noting that X allows cannabis companies to advertise and engage with consumers more freely than any other social media platform. She highlighted that cannabis-related content drives significant engagement, with more than 40 million posts annually on X.

Jim Belushi: From Hollywood To Healing

One of the most compelling stories came from Jim Belushi, who shared his journey from Hollywood to cannabis farming. “It’s all about making people feel good,” Belushi said, likening his work in cannabis to his career in entertainment. He reflected on how cannabis has helped people in his life, from veterans to those suffering from chronic pain, and emphasized the healing potential of the plant.

Belushi acknowledged the financial struggles many cannabis businesses face, especially in cultivation. “Growing is very expensive,” he said. Despite the challenges, Belushi's involvement in the industry is driven by passion, not profit. "I already got my TV money," he joked, but his dedication to cannabis remains serious.

Ricky Williams And The Athlete's Perspective

Former NFL star Ricky Williams, founder of Highsman, has long been a vocal advocate for cannabis use in sports. During the conference, Williams shared his insights into how cannabis can aid athletes in managing pain, stress and recovery. Drawing from his own football career, he highlighted the importance of alternative medicine, particularly in helping athletes reduce reliance on prescription painkillers. He also shared insights into how medical markets can best serve patient needs as adult-use legalization continues to expand across the nation.

Awards and Recognition: Celebrating Leadership and Innovation

The conference also saw the announcement of the 2024 Benzinga Cannabis Awards, which recognized leaders and innovators across the industry. Among the honorees:

• Todd Harrison, founder of CB1 Capital, received the Michael Berger Capital Markets Award for his leadership in cannabis investment.
• Cory Gardner, former U.S. Senator, was awarded the Friend of the Industry Award for his work advancing bipartisan cannabis reform.
• Debra Borchardt, co-founder of Green Market Report, earned the Cannabis Journalism Award for her in-depth reporting on the sector.
• Loriel Alegrete, CEO and co-founder of 40 Tons, took home the Bob Fireman Award for Entrepreneurship, celebrating her efforts in building a socially responsible brand focused on social equity.

Looking Ahead: The Road To 2025

As the conference concluded, it was clear that while the industry faces challenges, there's a strong sense of hope for the future. Federal reforms, particularly rescheduling and SAFE Banking, could be the catalysts that drive the next wave of growth. As Ross Gerber put it, "When these laws change, these companies will be wildly profitable."

With leaders like Verano, Curaleaf and Cresco Labs positioning themselves for growth, and with innovations in technology and personalization paving the way, the future of cannabis looks bright. The industry’s resilience and adaptability were on full display at Benzinga's Cannabis Capital Conference, setting the stage for what could be a transformative year ahead.

Join us at our next event, the California Cannabis Market Spotlight on November 12. Get tickets now.

Photo: Wendy Davis