What strategies can legal cannabis companies use to win the fight against the illicit market?
That’s the question Tim Seymour, portfolio manager of the Amplify Seymour Cannabis ETF (NYSE:CNBS) asked a panel of cannabis executives at Benzinga Cannabis Capital Conference on April 20 at the Fontainebleau Hotel in Miami.
Matt Darin, president of Curaleaf Holdings Inc (OTC:CURLF), said the illicit — or traditional — market has been around long before the legal industry came about.
Lack of enforcement in this area is one of the biggest challenges the legal cannabis industry faces, said Darin.
“We view our biggest competitor, not as Verano, or Ayr, but as the illicit market. That’s ultimately what the competition is when it comes to pricing and availability and convenience,” said Darin.
“For those of us that are paying too many taxes and employing a lot of people, it’s really frustrating, but it’s a trend that we as an industry have to deal with,” he added.
In the case of Verano Holdings (OTCQX:VRNOF), what Chief Investment Officer Aaron Miles analyzed is “how can we compete” with the illicit market?
“We can’t just turn on ‘legal’ and expect people to come into our stores, we have to look at consistency of product, quality of product, availability of product and make sure we give people an actual incentive to transition over from the illicit market,” Miles said.
Emily Paxhia, co-founder and managing partner at Poseidon Asset Management, said “We have to acknowledge that this industry came from a root of illicit operations, with bold and brave people who really saw something and pushed it forward.”
However, Paxhia stated that for legal actors, it’s time to overcome this state of business, for the sake of the consumer, because legal products get tested and can offer higher quality.
Photo: Dez Smith at Benzinga Cannabis Capital Conference
