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The MJ Unpacked cannabis industry convention came to Atlantic City last week as the New Jersey market has grown and started to bloom.
However, it remains very hard for others to keep going. Many New Jersey cannabis license holders and businesspeople from elsewhere were at MJ Unpacked looking for an investor.
Many of the businesspeople and professionals Heady NJ spoke to agreed federal marijuana prohibition is hurting the growth of the state-legal cannabis industry.
MJ Unpacked was one of the few cannabis industry conferences with a booth-heavy show floor and several notable policy panels. It was also the only major conference to feature the NJ Cannabis Regulatory Commission (NJCRC).
MJ Unpacked Cannabis Industry Convention
Many rising independent New Jersey businesspeople attended the MJ Unpacked cannabis industry convention. Some displayed their products on the show floor.
Often, once entrepreneurs successfully open, they quickly want to grow cannabis and make cannabis products as well. They often want to be MSOs themselves or sell their business eventually.
Also featured at MJ Unpacked were many small corporate Multi-State Operators (MSOs) who looked into Jersey and thought the market’s numbers looked good.
Some of the small MSOS are run by people with underground legacy ties and those who came through the medical cannabis side to help people. They have a different mentality than the large MSOs.
Leading local independent owners were there promoting their brands while hob-knobbing on the floor. After struggling for years, the market is slowly beginning to look like the vision upon which many base their hustle.
Few of the large MSOs had a significant presence at the convention.
On the 1st night’s party, New Jersey cannabis professional Marshall Ogen won a community award from MJ Unpacked for his work promoting the industry with the NJ CannaBusiness Association (NJCBA).
The second night’s party was at the Showboat Hotel, which built a water park after the Boardwalk Budz cannabis consumer conference.
Investing in NJ Panel Featuring the NJCRC and EDA
Leading Jersey advocate and businessman Leo Bridgewater moderated a panel with NJ Cannabis Regulatory Commission (NJCRC) Office of Diversity and Inclusion Director Wesley McWhite III, Jenell Johnson of the NJ Economic Development Authority (NJEDA), and Atlantic City cannabis official Kashawn McKinley.
“This is the first time I’ve been able to attend a conference like this and have real numbers,” Bridgewater declared.
He noted the NJCRC has proof the market is prospering with more than 100 dispensaries open and many manufacturers and cultivators prepared to be on shelves by the end of the year.*
Bridgewater argued that New Jersey is more involved in providing for social equity than other state-legal cannabis markets in the early stages.
McWhite said according to the legalization law, 15 percent of licenses are supposed to go to minorities, women, and disabled veterans.
“We are surpassing our statutory benchmarks,” he declared.
Trying to Help Worthy Small Cannabis Companies
Johnson said they arranged two sets of winners for their test pilot program. The winners of the second one have yet to be announced, although a few have posted on socia media about it.
“This is the highest grant of its kind,” she declared.
“Would it be fair to say the State is the biggest investor in the industry?” Bridgewater asked.
“It’s accurate to say we are the largest,” Johnson exclaimed.
Unfortunately, some grants went to out-of-state companies that are women or minority-owned at the expense of locals.
However, the second round of grants exclusively for Social Equity applicants should be different since that prioritization has a local residency requirement.
Bridgewater noted that McKinley wants AC to be the premier cannabis town and that the EDA is working with AC on that.
“We’re welcoming you into our city,” McKinley said.
McWhite noted the NJCRC started very small and slowly grew. They examined how other states are coping with a lack of money or capital issues.
“We’ve been talking with the EDA for 3 years now,” McWhite noted.
He added the NJCRC saw the need for a free technical assistance program for an underground legacy to legal track that the NJ Business Action Center (NJBAC) is working on.
“Our goal is to execute and build that stronger and fairer economy,” Johnson said.
She added they’re looking for more money to give out.
McWhite noted small businesses must advocate politically to the NJCRC, the Governor, and the legislature for policies that benefit them.
Money Issues
Bridgewater explained many investors speak poorly of the New Jersey cannabis market based on misinformation.
“What you’re saying and what’s happening are two different things,” he declared. “The sky really is the limit as long as we can continue to push this thing forward.”
Bridgewater noted towns have a lot of power in the process.
They have a lot of power in general.*
He said AC could serve as a model for other cities and cannabis.
Afterward Johnson told Heady NJ that the Social Equity winners have been awarded and they are currently in a class. After they graduate, the winners be announced.
She did not go into details about more grant rounds.
Seed Capital for Startups
Business people packed the MJ Unpacked ir Seed Capital for Startups panel.
On a panel, Jeanne Sullivan of Arcview said there are many issues with investing in the industry. Arcview is an organization that funds cannabis companies. However, it funds only a very small percentage of the companies that apply.
It was noted Money wants to make money fast, and very bad financial offers are prevalent in the cannabis industry.
Beware of Scoundrels
Sullivan said the tech industry has a professional investing infrastructure (which helped Apple Computers). This is in stark contrast to the cannabis industry, which leads to many she called scoundrels.
Scoundrels offer bad deals. Many are hedging their bets on very risky companies they have little faith in, so they have clauses that protect them and allow them to take over if things go badly.
Sullivan said a bad investor can make an owner miserable.
Brian Kingsley said he watches companies as they grow and invest after getting to know the founders for months.
“Today is the best time to invest in cannabis. It’s a great time,” Kingsley said.
Sullivan said an advisory team can help.
“Investing is all about trust,” she noted.
Sullivan noted you need to have investment-related documents in a secure cloud they called a data room and laughed at someone unfamiliar with the term.
“New Jersey is doing it right. It takes a tough New Yorker to say that,” she declared.
Federal Cannabis Legalization Panel Held
Noted South Jersey lobbyist and advocate leader Bill Caruso moderated a federal cannabis legalization hybrid panel with Tahir Johnson of Simply Pure Dispensary and the MCBA, while advocates and attorneys Andrew Kline and Shane Pennington were remote from Washington, DC.
Caruso admitted to being skeptical about it happening soon despite NORML activist leader and Heady NJ guest writer Chris Goldstein’s White House meeting.
Vice President Kamala Harris endorsed legalization.
Johnson endorsed descheduling, which would end arrests and allow the state-legal cannabis markets to prosper to applause from the crowd.
“People are serving time for cannabis. Rescheduling doesn’t change that,” he noted.
But he thought it could be a good step.
Johnson was skeptical of action from President Joe Biden.
Marijuana Prohibition Hurting Jersey Cannabis Market
He noted that the federal IRS Tax Code 280 E does not allow licensed companies to deduct expenses from their taxes. This makes the amount they pay high and their net profit margins lower.
New Jersey has sought to address that.
Johnson said his small MSO partner, Wanda James, an African American female entrepreneur, has struggled in Colorado because of that.
There are also fears of alcohol, tobacco, and pharmaceutical corporations coming into the industry and dominating it.
“We gotta get to descheduling. Sometimes in Washington, you gotta take the incremental win and fight on,” Kline said.
“This is the first time the President of the United States has initiated this process. He did ask that it be done quickly. A decision could.be released as soon as this month. We’ve heard those rumors before,” he added.
Kline said lawsuits are inevitable.
Caruso noted Congressional leaders sent a letter to the Drug Enforcement Administration (DEA) in favor of federal cannabis legalization.
“It shows how serious this is,” Pennington said. “Notice who’s writing which letters.”
Johnson noted town and state cannabis regulations are big hurdles. So adding federal regulations could be an even worse barrier to entry to the New Jersey cannabis industry.
Kline thought at least basic federal regulations were inevitable.
“They like our state-regulated markets,” he noted. “We want them to stay out of our way.”
Kline wanted the Cole memo updated whereby the DOJ permits the state markets to function while marijuana remains federally illegal.
“This has been the boogeyman. It’s not a boogeyman people think it might be,” Kline argued about Pharma corporations entering the industry.
MJ Unpacked was previously held in Midtown Manhattan. But with the New York cannabis market’s many problems, it was moved to Atlantic City.
