Pot Companies Looking Ahead to Distribution: Cannabis Weekly – Financial Post

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Multistate operators are taking a closer look at how their product moves around because the Democratic Senate is renewing hopes that interstate transport will soon be allowed. Kim Rivers, chief executive officer of Trulieve Cannabis Corp., said the company is developing a hub model that will divide the U.S. into five regions. The evaporation of state boundaries and quirky laws that limit cultivation area in some states will come as a huge relief to her company and others.

Yet there are questions over just who’s going to be moving the product through such hubs on the way from greenhouses to customers.

Tilray Inc. CEO Brendan Kennedy sees a battle brewing among cannabis, alcohol and tobacco companies, all of which will push to use their distribution networks. While Tilray is based in Canada and Europe, it has a partnership with Anheuser-Busch InBev SA, which gives it a slight preference for the alcohol model, he said. That industry already has a powerful regional distribution capability.

“I have a hard time believing the multistate operators are going to win that lobbying battle. But I don’t have a dog in the fight,” Kennedy said on a recent webinar. “I think it will be fun to watch.”

QUOTE OF THE WEEK

“Investors who truly understand the space and the growth opportunity weren’t particularly concerned with how the balance of power played out in the U.S. Senate. We understood just how pivotal 2020 was, and one way or another, 2021 would see more positive developments unfold. The fact that the Democrats will control the Senate now just expedites important legislation — the very top of that list being the SAFE Banking Act,” said Brian Burchell, head trader at Farmstead Capital Management, who is invested in several U.S. multistate operators, in an interview. The SAFE Act would allow banks to serve the industry even if marijuana remains illegal federally.

This article originally appeared here in https://financialpost.com/pmn/business-pmn/pot-companies-looking-ahead-to-distribution-cannabis-weekly

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