Benzinga's Cannabis Capital Conference Day 2 Keynote with The Parent Company's Steve Allan

The following post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga.

Day 2 of Benzinga's Cannabis Capital Conference began with a keynote presentation from Steve Allan, CEO of The Parent Company. Melissa Lee, reporter with CNBC's Fast Money, moderated the discussion. 

The Parent Company (TPCO Holding Corp.), was formally the largest SPAC and as a result is now California's leading vertically-integrated cannabis company, combining best-in-class operations with leading voices in popular culture and social impact. 

Thinking Global, Acting Local

While many cannabis businesses are looking to expand across the country as new states go legal, The Parent Company has stayed put. Lee opened the keynote discussion by asking Allan to elaborate on The Parent Company's choice to stay in one state. 

Allan plunged into the depth and expanse of the California markets, as well as the problem of slow rollout due to a lack of programming. "California has more consumers alone than the entirety of Canada and that's not even accounting for tourism. And, it's still ruled at a local level. So what we've seen has been a slow rollout from cities and counties." 

He added, "Even LA, the largest cannabis market in the U.S., is missing a program. Prior to the pandemic, 70% of California cities and counties didn't have a program in place. So there really is still an access problem in California that with our capital and infrastructure we believe we can help solve." 

To give further perspective on California's situation, Allan pointed out that the golden state currently has the same number of dispensaries as Florida, which is still medical-use only. 

All About Access

Lee took that opportunity to turn the conversation to access mentioning that these days, with a Starbucks on every corner, the pressure of convenience for consumers is ever present. 

Allan agreed and highlighted that one of the biggest challenges for cannabis companies was how highly regulated the industry is. "You can't have the compliance and the legal infrastructure as with other industries," he commented. 

With regard to what The Parent Company looks for in the businesses they choose to work with, Allan stated, "From our perspective it's about finding great entrepreneurs who've built solid businesses but are missing something — missing access to raw materials or to working capital that we can help bring. We can accelerate what their growth can look like within a framework that provides us an opportunity to unlock their full potential." 

When Lee asked Allan his views on competing illegal dispensaries, Allan responded, "It's a bit of a chicken and an egg scenario. Until a city or county puts a program in place, there's really no necessity for them to intervene. If they do, they don't know where they [illegal businesses] might pop up again. Once they [cities and counties] have a program in place, they can offer them [illegal businesses] an alternative solution. So it is an issue, but it's one that you have to understand the nuances of." 

Cannabis on Your Terms

When Lee asked if The Parent Company would be moving to a heavier delivery model in some markets due to effects of the pandemic, Allan responded, "While there's been an increase in delivery, people really want online access even if they're picking up in-store or curbside. We've found that the consumers we're engaging with online have higher units per transaction and have a higher dollar value of their average order." 

Allan continued, "How are we helping to make cannabis simpler for consumers? We're walking out of a 50-year war on drugs. We see it as our job to solve not just how people get access to cannabis but how customers get educated, and to wipe some of the stigma off."

Lee posed her final question, "How do you think of the post-COVID world? Do you have a sense of what demand will be like once things open back up?"

"The reality is that demand has increased during COVID. So COVID vs. non-COVID is more focused on how consumers are accessing it. We've seen more growth in inhalables and edibles. I think it's safe to say we won't be seeing a lot of puff-puff-pass anytime soon," Allan concluded. 

To learn more about The Parent Company, visit https://www.theparent.co/.

The preceding post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga. Although the piece is not and should not be construed as editorial content, the sponsored content team works to ensure that any and all information contained within is true and accurate to the best of their knowledge and research. This content is for informational purposes only and not intended to be investing advice.