Back and Forward: Commercial Cannabis

Investor Daniel Conway on how legal cannabis is impacting Sacramento

Back Q&A Aug 6, 2018

Daniel Conway, managing partner of Truth Enterprises, offers his insight into commercial cannabis real estate in the Capital Region. For more from Conway, check out “420 Estates” in our August issue. Sign up for our newsletter and we’ll email you when it’s available online.

What’s the most impactful development in Sacramento’s commercial cannabis industry since its legalization?

The most impactful development — and what sets Sacramento apart from other cities and regions — is both the number and variety of licenses that it has been issuing. The City has been ambitious in licensing, permitting every use on the supply chain from cultivation to retail. Not many other cities can say that. Hopefully over time, this clustering of businesses will enable the city and the region to become hubs for job creation and innovation in this emerging industry.  

What do you foresee as the biggest change on the horizon in the year to come?

I expect to see the first wave of consolidation and business failures to occur. Virtually every business in this space is a startup, which means they lack resources and have made business decisions based on certain assumptions and expectations. With wholesale prices falling, compliance costs rising and a nascent supply chain many businesses will be tested — and some will fail. At the same time, we are already seeing more capital finding its way into this industry, with many companies looking to acquire or invest their way to a statewide footprint. The combination of business failure and consolidation will make it harder and harder for small businesses to navigate the landscape.  

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