Eric Rosen

The cannabis companies that ‘WIN’ in 2025 and beyond will have these five things in common: 1) They understand the scale that they are trying to achieve and their entire operation is appropriately focused based on that scale. -Local companies need to market and connect locally (in an extremely authentic way) while focusing on profitable, sustainable revenue streams that are mostly consumer driven. -Statewide companies need to do the hard math and modeling to understand what realistic growth means for them. Set specific growth targets based on achieveable modeling. Too many statewide brands operate, market and spend like a national brand, and it will cost them in the end. -National brands must focus on lean profitability and maintain a highly targeted approach to their spending, despite a world that may seem like it has limitless customers. 2) They don’t try to do it all. Developing mastery and economies of scale in specific sectors, while building strong partnerships in the rest of the market, is the model for success in the years to come. The great companies from 2025-Federal Legalization will seek out expansion via truly strategic partnerships (and careful aquisitions) while the mediocre companies attempt to do it all themselves. The largest, best capitalized MSOs will be buying up statewide and regional businesse with lean, focused, positive-cashflow operations, which solve specific problems in their infrastructure. 3) They are building a business that is designed for the New World of Cannabis, and the Era of Commercialization. -We aren’t trappers anymore. -Hitting licks can only take you so far. -Weed is a CPG product. -THCA is sold openly online and in gas stations. -D9 Bevs and Gummies are sold in some of the deepest red states. -Weed by mail is probably here to stay. -Mushrooms are legal in various cities and states. -Consumer trust in a brand is the most valuable asset in the industry. No matter their scale, the companies that win in the next five years will integrate themselves into the new ways consumers interact with and purchase cannabis…. (Online, DTC, Low-Dose, Mixed Nootropic, Bev, Smoke Shop/Gas Station, Mass Market, Seshes, N.A. bars/lounges, add-on dispensary licenses) 4) They build continuous feedback loops with their customers. The great brands and companies that succeed into the 2030’s will have a deep, data-based understanding of their consumers at all levels. Brands must understand the buying criteria of the stores that carry them as well as the buying criteria of the consumers that drive sell-through. The very best will encourage a rewarding consumer engagement loop that directly influences operational decision making. 5) They just don’t quit. (In fact, they continue to innovate, pivot, and understand that at the end of the day, their business is change). A lot of cannabis operators will quit in the next five years. In all business, but especially in cannabis, sometimes it’s just about being there tomorrow.

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It might well be one of the most telling things that a company can try to tell you. When it compares itself to another, large, successful company or brand. We see it a lot in cannabis - legal cannabis is still somewhat new and so, many cannabis companies decide to link themselves to another company or brand... ...in name only - because, they are, most times, nothing like that company or brand. The Apple store of Cannabis (MedMen) The Costco of Cannabis (High Tide) The Coca-Cola of Cannabis (Hydropothecary/Hexo) The P&G of Cannabis (Privateer Holdings) The thing is, these companies are nothing like the successful businesses they try to associate themselves with - not now, and, for some, like MedMen and Hexo, not ever, because, well, they are dead or dying. You see, there is so much more sitting inside what makes an Apple or Costco or Coke or P&G - the real strategy they deploy - their value proposition(s) - the brand(s) they own and nurture and build - their consumer/shopper-centricity - their innovations - their focus and discipline. Don't get fooled by these quick and empty associations - really look into a company and ask yourself: - can I see who it is they are in business to delight? - can I see what it is they provide to deliver that delight? - can I see the management expertise to steward this business? - can I see the funding to support the building of the business? - can I see the direct path to sustainable, profitable sales growth? If no to any, ask yourself why they have a license to win - if no to many, ask if they have the ability to even stay on the road.

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60% of restaurants fail in their first year. 80% of restaurants fail within five years. Is growing cannabis is equally difficult? No. No it’s not. Michigan now has about 1,000 cultivation licenses in its AU/Rec market, which launched in December, 2019. So, it’s been about 4.5 years… Obviously, the first couple years were VERY good to cultivators, especially if they were able to get plants in the ground in 2020 - but the market really started to compress in 2022 when the supply finally caught up to demand. That means, in many ways, businesses have only been operating in the ‘real’ market (a market not inflated by scarcity) for a couple of years. Do we then expect 80% of grows to fail by 2027? Even if we extrapolate the statistics across all business types, where 45% of all new businesses fail within five years, and 65% fail within ten, we should expect about two thirds of all cultivators (and processors, and dispensaries) to shut their doors between 2025-2030. Do we think those numbers are accurate? Is this a bad thing if so? Or is it the inevitable outcome of new opportunity in a free market? The next question is, how would you avoid it? Would you want to see limited licenses? State mandated price minimums? Subsidies? Why does no one bat an eye when new clothing stores open and close, restaurants open and close, or digital startups open and close..? But when cannabis companies fail (many of which are founded by owners with little business experience), we start to question the very foundations of free market capitalism. I see the same people who whine about ‘big government’ and the ‘socialist left’ begging for government intervention to fix the cannabis industry. Because their wallets are in danger. I see so-called activists demonizing legalization. Becuase their wallets are in danger. I see ‘legacy operators’ begging for more enforcement. Becuase their wallets are in danger. My question is: When did cannabis get so f****** SOFT? Personally, I’m tired of all the crying. Where is the toughness I used to see? Where is the ‘f—- the man’ attitude? Where is the solution-focused conversation? We founded startups in an incredibly volatile, highly regulated space, with extremely cutthroat competition. This was always going to be absolutely brutal. We all knew this going in. If you say you didn’t, you were either lying to yourself then, or you’re lying to yourself now. Right now, about four years in to Rec cannabis in Michigan, far less than 50% of grows have failed (anyone have good data here? - my guess is it’s under 20%) - so, arguably, this business is EASIER (much easier even) than running a restaurant. So what are we all complaining about??? Where’s the uproar for restaurants? There isn’t any. Becuase that’s the free market.

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What do consumers actually expect from a cannabis brand? Hint: it’s the same things they expect from non cannabis CPG brands… 1) Consistency. Consumers want dependable experiences, and logos serve as seals of approval that guarantee those experiences. Brands should only put their logo (and their reputation) on product that maintains consistency in consumer experience. 2) Ethos. Consumers want their brands to be more than just the product build, and they build an impression of a brand based on all available data. If your messaging doesn’t match your product, or if your real world actions are not representative of your ethos, it will be painfully obvious, and consumers will punish you for it. What does your brand represent? What set of values does it align with? What niches does it serve? Are the answers to those questions clearly apparent to your customers? 3) Humanity. Consumers under 40 want to buy from PEOPLE, not faceless corporations. Social media has given consumers access to the founders behind their favorite products, which means they now expect more from them. Conversely, digital personalities with significant followings can leverage them to move products. The power of an authentic evangelical founder cannot be understated. It’s extremely difficult to build an authentic brand without a human being behind it. How would I sum up these three things? TRUST. Consumers want brands they can trust. Trust in quality. Trust in messaging. Trust in the humans behind the messaging.

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The cannabis industry is booming, but let’s be real—hemp is clearly the MVP. In 2022, the hemp market raked in a whopping $28 billion, leaving the marijuana market trailing behind at “only” $26 billion. Who knew that while marijuana was out trying to look cool, hemp would quietly take over? Sure, marijuana has had its time in the spotlight with all the hype, dispensaries, and Instagram influencers. But hemp’s the one doing the real work, showing up everywhere from wellness products to eco-friendly materials, and let’s not forget all those everyday items people don’t even realize have hemp in them! It’s the true underdog story of a plant that doesn’t need all the flashy lights to make a big impact. While marijuana’s been focused on recreational fame, hemp’s been building a sustainable empire. It’s a jack-of-all-trades, fitting right into personal care, health products, healthier intoxicating products(than alcohol), food, textiles—you name it, hemp’s in it. So while the marijuana market is hanging out in dispensaries and waiting for its next big state to legalize, hemp’s already in the pantry, the medicine cabinet, and probably the clothes on your back. Just go into a marijuana dispensary and take a look around: it’s the usual suspects—standard CBD and THC products, nothing new. Meanwhile, the hemp industry is leading in real innovation with a whole array of natural cannabinoids. Delta-8, CBG, CBN—the options keep growing, with products designed for focus, relaxation, and everything in between. The hemp market is also adding other popular herbs and combining them with unique CBC, THCV, CBN, and CBG blends far before marijuana operators even think to. It’s no wonder they’re trying to shut us down—hemp’s raising the bar on every front. So while marijuana’s riding on reputation, hemp’s the one rolling in the real success, staying ahead of the curve, and keeping things interesting. #hemp #hempissmarter #cannabisindustry #hempindustry #minnesota #florida #wisconsin

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Incredibly sad that we have proven safety associated to naturally present cannabinoids in cannabis such as cbd, cbg, and cbc as depicted in this 12 week trial. https://lnkd.in/dd5qrTxy? and yet we have bills like the Miller bill and others that not only lack industry knowledge but also education or lived experience. It Is easy to make decisions on behalf of special interest groups when you are not personally impacted. Levering outside forces such as faulty marketing practices (claiming marketing to children), the use of unestablished alternatives such as HHC has led to the legislative perspective we need to “save” the kids, and regulate this harder.  My belief in reality, while likely not a popular one, all distillate included thc, cbd, and other major cannabinoid should be produced and derived from low potency cannabis otherwise know as hemp, why? Well the scalability, cost and turn over makes business sense and is practical to meet the scale needed for consumers. Traditional cannabis will become more based on qualitative metrics rather then only quantitive. We will see a model that reflects the wine experience, frankly total thc will become less relevant once consumers and brand actually market and depict all the relevant info associated to the goods such as total VOCs including terpene, Flavinoids, esters (flavor compounds) and other actives. People will shop for experience not numbers. Concentrates will have their place to as a true experience of what that plant has to offer in a compact form without the need for combustion. Just like other personalization experiences cannabis will too become that if not sucked into a pharma only paradigm. It’s a shame many of the players doing right by their end users are getting the short hand of the stick due to the discrepancy of perception versus reality. There is proven efficacy for those who has taken an alternative approach to their health I don’t think this interference is warranted. 

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In the first quarter of 2024, with federal cannabis-reform efforts not yielding any practical changes, Curaleaf made a strategic decision to enter the hemp market. This is a trend we are starting to see. Cannabis can only be sold in the state it was produced and only allowed to be sold through dispensaries (in a hand full of states such as #california it could be sold through a delivery service). Intoxicating products that derived from hemp, are legal to ship across state lines, are available via e-commerce and mainstream retail channels. As well the producers of the products do not need to comply with burdensome licensing requirement and predatory taxation. A lot of politicians say that they support small businesses, but for small cannabis businesses to be able to properly compete, they need to have access to the same distribution channels as #hemp. Thank you Chris Roberts from MJBiz for the market update. #cannabisindustry #cannabiscommunity #cannabisnews #cannabiseducation #cannabispolicy #cannbislaw https://lnkd.in/gJHjPYgG

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Now that Thailand has walked through the ring of fire - and cannabis is delisted and medical use encouraged - its time to learn from the West's mistakes. Thailand should 1. Make all non-medical cannabis a violation of regulation and 2. Make all medical weed meet high quality standards. This is how medical eats recreational: by decree!. Decree: All legal weed is medical and all medical weed is subject to rigorous testing. Then the black market is where you find all the ditch weed. There is still no special tax on legal weed in Thailand. Keep it that way. Make testing affordable and transparent. Do you think this is realistic? Remember: Thailand is not stuck with the rec vs. medical legal distinction the way the West is.....

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When cannabis is rescheduled to Schedule III, here's what to expect: You'll need a valid prescription from a licensed healthcare provider. Cannabis could be dispensed through DEA-registered pharmacies, not just state dispensaries. Only FDA-approved cannabis medications would be legal, while state regulations could still govern cannabis use and access. Easier research could lead to more FDA-approved cannabis products. This change would transform how we access cannabis, making it more like a prescription medication

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As harvest season nears in the cannabis industry, it's vital to consider the optimal timing for testing compliance and potency. Personally, I've found that allowing a 30-day lead time post-harvest for compliance testing, and a 2-week lead time for potency testing, has been effective. What are your thoughts on this approach? #CannabisIndustry #HarvestSeason #ComplianceTesting #PotencyTesting

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The Michigan Cannabis Regulatory Agency (MI-CRA) "...gave strong consideration to the bidders ability to prevent fraud, abuse, and other unlawful and prohibited activities..." What??? As a laboratory consultant who works exclusively in the #cannabis industry, I believe #outcomes and #value are far superior to a slick sales pitch and low price. Since 2017, the only feedback I have heard from my Michigan cannabis business clients is that fraud, abuse, and illegal activities are rampant and have only accelerated. That doesn't seem like a desired outcome. Many exceptionally talented scientists and businesspeople I’ve worked with to establish and grow their laboratory businesses have suffered life-altering economic losses and barriers to future employment. They chose to stand against consumer fraud, ultimately closing their #laboratories and vaporizing several million dollars of investment along with years of backbreaking effort and now get ghosted by any non-cannabis scientific opportunity. That is the antithesis of value. I am strongly pro-MI CRA and fully acknowledge the complexity and difficultly of their mandate, but IMHO neither the published outcomes nor value appear to match the KPI's for this software selection.

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I made post about how much quality over quantity matters in regard to profits in cannabis and received some push-back about the way I ran the COGS using the same cost to produce for both scenarios. Here's my explanation on why I chose to run numbers that way... If I were running COGS to see what cultivars we should keep vs cull, I would absolutely look at things on a on-by-one basis. Although, that would really be too easy to get an accurate number since we don't divide production labor out by cultivar worked; but we could still get a "close enough" figure for those types of decisions. However, this scenario was looking at overall profitability while using cultivars from two ends of the spectrum as examples. For this purpose, I prefer to use a blended margin approach by looking at full production output based on total costs to get an average cost to produce per pound. It also helps because the costs that went into producing a batch were already long spent before the revenue is realized, so we aren't really looking at a COST/SELL dynamic like we would in other production or sales scenarios that have a shorter production to sales timeline. Since there are 4-6 months of costs that go into a harvest before there is a chance to see any revenue from it, the sales from every harvest are really going into the production of future harvests - and not necessarily of that same cultivar. This is another reason why I choose to use a blended margin approach, as it ensure we are able to keep a more even and balanced cash flow and revenue stream and also reduce price elasticity of our products creating more consistency for our customers. When you know the parameters that you need to remain within (which any good business person should know for their business) then a blended margin is much simpler and gives a better overall picture. Happy Friday, y'all!

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🌿 **The Art of Cannabis Selection: Why Terps Matter More Than THC** As someone who buys cannabis based on how it smells, how it burns, bag appeal, and price, I firmly believe that Terpenes (Terps) are more important than THC content. It’s easy to sell flower based on the lowest price or the highest THC percentage, but truly understanding and selling based on flavor and effects requires knowledgeable budtenders. This deeper level of expertise helps consumers make better choices tailored to their preferences and needs. At Erva Inc., we offer a wide variety of products to ensure we have something for everyone. Our commitment to quality and diversity in our offerings stems from our belief in the power of education and experience. We put our money where our mouth is and stand behind all of our products, ensuring each item meets our high standards for excellence. Let’s foster a market where terps and overall quality take precedence over just the numbers. Here’s to more flavorful, effective cannabis experiences! 🍃 #CannabisCommunity #TerpsOverTHC #QualityOverQuantity #CannabisEducation #ErvaInc #Wellness #FlavorfulCannabis

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Most cannabis events end up getting the speakers they deserve. Most have speakers apply to speak, pay their own way to the event and speak for free. So, they end up with speakers who are looking for work or looking to profile their company - what they do not get are speakers that are truly expert in a given topic (sure, they do get some, but when you look at the speaker lists, it's a mish mash of people with varying degrees of real experience and knowledge). People pay to attend these events - why the speakers are not paid is no mystery - the event doesn't want to give up the money...and there are enough people who want to speak, that they can fill an agenda. You get what you pay for.

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Lately, I’m seeing a lot of cannabis operators who have their eyes set on the future and minds stuck in a cycle of fear and/or speculation. Guess what? The strong, profitable businesses with fruitful partnerships who leverage economies of scale to produce high value products (aka the ones winning now) will be the ones who continue to win after rescheduling. Yes, there will likely be more hoops to jump through. Yes, this will speed up the inevitable process of consolidation. Yes, change is coming. But for now, and probably for a couple more years, nothing will change. There is a whole lot of legislation to be written, and a whole lot of lawsuits stacked up that are going to slow this thing down. We are all better off focusing on building more efficient businesses, more value in our products, and a deeper connection with our customers. If you have a hunch that an investment that is worthwhile without rescheduling will be a massive win with it…. Maybe take a swing at it. But don’t let those hunches (or fears) drive your decision making. Be ready to adapt. But don’t let preparing for the worst get in the way of running a good business.

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Blood in the Water: The Squeeze is On for Cannabis Operators 🌊🌱 There’s no sugarcoating it—there’s going to be blood in the water this year in the cannabis industry. 🩸 I’m hearing stories of growers throwing in the towel and just operating to break even at best, while many others are losing ground fast. Farms are folding under the pressure, and price compression is becoming so intense it’s suffocating the value of the entire industry. If you want to know which companies might not make it, look closely at where the debt lies and when their notes are coming due. Good luck refinancing those notes when your projections no longer align with the reality of the market. The Michigan market is a different kind of monster—the largest supplier west of the Mississippi to the country. Yet it’s a battlefield. You might remember the big MSOs that swept through Michigan, buying companies for $20M, $30M, even $50M—now some of those same stores are dark. 🕯️ I won’t call them out, but if you shop around, you know who they are. Some indoor grows running a thousand lights are now selling pounds for just $500. It’s crazy to think someone would buy a business for $50M only to sell product at those prices. The math just doesn’t add up—and it won’t for long. The problem isn’t just financial—it’s foundational. These companies never took the time to build a brand identity. Everyone wanted to copy Apple, but identity matters more in cannabis than tech. You can’t fake authenticity. Is this the bottom, or do we still have further to fall? 🤔 How do you see the market shifting in the coming months? #CannabisIndustry #MichiganCannabis #PriceCompression #GrowersCommunity #CannabisBusiness #BrandIdentity #SurvivalOfTheFittest

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