The U.S. cannabis industry is changing fast, and operators, investors, and advisors are all trying to keep up. Medical cannabis has moved to Schedule III, but much of the market still runs on regulations, tax burdens, and insurance terms written for Schedule I. Hemp laws are changing, and there’s a call from patients and healthcare providers for better science and clearer guidance. Operators are also dealing with tight capital, price compression, cash flow pressure, and shifting payment terms.
That’s why we’re excited to bring together four industry leaders at Blank Rome’s Tenth Annual State of the Cannabis Industry Conference for a candid conversation about how the cannabis industry is innovating to meet these challenges. Here’s a preview of what we expect they will cover.
Innovation in Fiduciary Liability Solutions
As cap tables, governance, and the legal landscape change, c-suite and board members of cannabis companies need coverage that actually responds when they need it. Joining our panel will be Thomas M. Sheffield, Executive Vice President, of HUB Insurance,who will address how HUB has found solutions to two distinct needs:
- Fiduciary liability structuring for ESOP-heavy cap tables. Many cannabis businesses have turned to employee stock ownership plans (“ESOPs”) to help manage the heavy tax burden of Section 280E. However, these structures carry their own fiduciary risks, and standard ESOP fiduciary coverage doesn’t always fit them well. Thomas will explain how HUB has built fiduciary programs that address that gap, rather than treating cannabis ESOP risk as ordinary private-company risk with a surcharge added on.
- D&O placement in a market still built for Schedule I. Even with medical rescheduling, most directors and officers (“D&O”) policies still carry illegal-acts exclusions that haven’t caught up with changing regulations, and insurer capacity remains thin. Thomas will discuss use of structuring coverage towers and ways to negotiate exclusion language that reflects cannabis’ actual legal status today instead of relying on outdated boilerplate.
Innovation in Hemp Laws, Rescheduling Medical Marijuana, and Science
As cannabis takes strides closer to mainstream medicine, patients, providers, and regulators expect stronger science, safer products, and clearer education. James Winokur, CEO of CitraChem, and VP Finance, Board Member and Development Department Chair of Association of Cannabinoid Specialists,will help us explore critical questions that need to be considered with rescheduling and hemp laws and what lies ahead for science. A few of these include:
- How are rescheduling and hemp-specific laws impacting what medical patients experience? What do healthcare providers need to know and how should they be educated?
- How have manufacturers evolved their product offerings to meet safety and testing standards while still addressing market needs and consumer demands?
- What is ahead for science and research in the effort to encompass real-world data and pharma-style studies? Is it possible to use these new developments in a way to bring a wide range of beneficial products to market that crosses multiple channels?
Innovation in Tax Planning Strategies
Section 280E still weighs heavily on many operators regardless of size, and rescheduling raises new tax planning questions. Jill Scher, Managing Director of CBIZ, will address vital strategies that can be used to combat a challenging market. These include:
- Individualized structuring and 280E tax planning. Jill will discuss how a flexible, independent approach to entity structure, inventory costing, and other tax strategies, can provide solutions that are tailored to each operator’s goals, ownership, business type, and rescheduling considerations.
- Closing financial gaps. During our panel discussion, Jill will explain why a combination of tax, advisory, and forensic accounting can strengthen reporting, trace payments, and support restructurings or the resolution of financial disputes.
- Connecting resources and relationships can help businesses stay on the offense rather than facing the market from the defense. Jill will help us explore how bringing together financial, technology, and capital resources allows cannabis operators close gaps and move from identifying a challenge to finding a practical solution in a difficult market.
Innovation in Credit Solutions
As the cannabis market matures in many states throughout the United States, payment terms are changing. In an industry with limited access to traditional banking and financing, managing receivables well is essential to staying healthy. Kraig Fox, Founder and CEO of Reklaim Credit Solutions, will dive into significant evolutions that have occurred within the industry, including:
- How business-to-business (“B2B”) relations in cannabis have evolved from cash-on-delivery to credit terms and how this major turn has affected operators’ growth and cash flow.
- Strategies operators can use to reduce the risk of extending credit and solutions that can be implemented to ensure business longevity that withstand market conditions.
Join the Conversation
Whether you’re an operator, investor, advisor, or just curious about where cannabis is headed, this panel will give you practical insights from people working at the center of the industry’s biggest changes. Attendees can register online at 10th Annual State of the Cannabis Industry Conference. Mark your calendar, bring your questions, and we’ll see you there!
