Cheech & Chong's President On Cannabis Industry Shifts: 'Everyone Waits For The Change To Schedule III'

As the cannabis industry continues to evolve, investors are increasingly focused on one thing: a company’s ability to generate cash flow. With regulatory changes, such as the anticipated rescheduling of cannabis, potentially on the horizon, businesses are preparing for both short-term stability and long-term opportunity.

This is according to Brandon Harshbarger, president of Cheech & Chong Global Holdings. In an exclusive interview with Benzinga ahead of his appearance at the Benzinga Cannabis Capital Conference, he shared his perspective on what investors seek in cannabis companies.

Cash Flow and Market Position Drive Investor Interest

According to Harshbarger, investors’ message is clear: “Nearly all investors we speak with have made it clear that the ability of the business to generate real cash flow in the near term is a requirement.” As the cannabis market matures, investors are less interested in speculative growth and more concerned with a company’s immediate financial health and sustainability.

Focus on Regional Markets Over M&A Activity

Harshbarger also noted a shift in strategy among multi-state operators (MSOs). “We see very little in terms of large M&A deals because the established MSOs have their regional footprint and are more focused on protecting their geographical moats than going on acquisition sprees,” he said.

This shift toward regional consolidation and defense comes as the industry waits for further federal regulatory changes, particularly the potential reclassification of cannabis to Schedule III. Harshbarger mentioned that many companies, including his, are preparing for this regulatory shift: “There is definitely a holding pattern as everyone waits for the change to Schedule III, and that makes sense to me.”

Planning for Future Opportunities

While the current environment may feel cautious, Harshbarger believes that significant opportunities lie ahead for companies ready to capitalize on a more favorable regulatory landscape. “Internally, we have our plans, and when that happens, we think there will be huge opportunities for brands that have shown they can be successful nationally,” he added.

With the cannabis industry watching regulatory developments closely, businesses like Cheech & Chong Global Holdings are focused on staying competitive, building strong financial foundations, and preparing to take advantage of upcoming changes.

As the Benzinga Cannabis Capital Conference approaches, industry leaders and investors will pay close attention to how these developments unfold.

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Photo: Courtesy of CRYSTALWEED cannabis on Unsplash