EXCLUSIVE: 'Beat The Crap Out Of The Competition' And Other Cannabis Industry Secrets To Success

The marijuana industry continues to face challenges with restricted financing options. But several titans in the space gathered on stage at the 2023 Benzinga Cannabis Capital Conference in Miami to offer suggestions on how to maintain growth.

One of the panelists included David Traylor, senior managing director at Golden Eagle Partners.

“Biological supply chains are inherently unstable,” which means it is hard to make exceptional products, he told moderator and Vicente partner Sally Peebles. His advice?

“We’d say beg, borrow and take market share. Let’s keep it simple, right? Make really good products consistently.” For him, “the best way to get new growth is to just beat the crap out of your competitors.”

A company's ability to expand varies by market, according to Eaze CEO Cory Azzalino.

For example, in Florida, once you have a master license and you’ve already spent a lot of capital, the store-opening process is relatively low cost.

“You can completely control your own destiny without being overly reliant on local regulators or approval," he said, praising the Sunshine State. That's why companies are confident when they plan to open 10 stores within the next quarter.

However, if capital wasn’t a limiting factor, Colorado would be the market where Eaze would be most aggressive. Why? The state’s regulations allow for easier merger and acquisition deals, compared to California where you have to buy the equity of a business including all the historical liabilities and tax obligations, Azzalino explained.

For MariMed MRMD CEO Jon Levine, consistency is crucial, especially when it comes to cultivation.

“We love our flower, and we really care about the product that we put out,” Levine said, adding that the company stays consistent with every flower and every product.

When consumers buy the name "Nature’s Heritage," they know they are getting that top quality, he explained.

Asymmetry Of Information

Understanding where things are moving in the cannabis market and staying ahead of the curve is also difficult, Traylor said.

"One of the problems is trying to find where this industry is going and trying to connect what molecules or preparations are going in, and also informing the market on what those may do because there’s always been an asymmetry of information in this industry," he said. "I think if we can take care of that, that’s going to allow us to grow better."

Geographic Diversity

Verano Holdings VRNOF chief investment officer Aaron Miles pointed out how different markets have unique consumers. For example, in California, there are customers who smell the product for terpene profile, he explains. Whereas, in other markets, they might not know the difference between CBD and THC.

Traylor also noted the importance of geographic diversity. If you really want to be successful, he said, “get rid of the arrogance."

"There’s been too much arrogance and too little humility in this industry,” he said, adding that companies shouldn’t assume that just because one thing sells in Florida, it’s going to sell in New Jersey — that’s not the case.

Levine followed up on that point, saying you got to pick where you’re going to retail certain products.

“You have to look at the region, you have to study what the people want," Levine said. People in certain parts of the country are not going to spend the same on cannabis as people in Boston or New York or California, he concluded.

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