On A Mission For Justice: Cannabis Industry Connects In Chicago

Todd Harrison, founder of CB1 Capital, longtime cannabis market analyst and author of the “Cannabis Confidential” newsletter, shares his reflections from the 2025 Benzinga Cannabis Capital Conference in Chicago and his outlook on the sector’s future.

The cannabis sector is enduring its fifth year of a brutal bear market.

Besieged by a litany of issues ranging from The Great Hemp Bogart to uncertain tax provisions, capital market, custody and U.S. exchange bans, and a grizzly mix of debt obligations and stagnant growth, it’s been… tough

The punch line is that THC and cannabinoid consumption is far from stagnant; it’s just bifurcated across two uneven channels.

State-legal markets are required to test and regulate cannabis, while hemp operators (often synthetically) modify cannabinoids to create an intoxicating effect.

The category as a whole is exploding—if there wasn’t 100% growth across both channels the last few years, it’s close—but the federal inconsistencies are maddening.

The issues are solvable, just not immediately, or all at once.

Hemp: The eyes of the nation are on Texas, where the governor has 11 days to veto the hemp THC ban and/ or the TECUP expansion of MMJ qualifying conditions or they’ll become the law of the Lone State land.

If/ then, Texas would become the standard for cannabis bifurcation, with hemp used for everything from textiles, paper, building materials, cosmetics, mulch, compost—the list goes on—while intoxicating cannabinoids (cannabis) is regulated and tested.

It’s not just Texas—a host of other states have taken steps to address the 2018 Farm Bill loophole, and the language in the current version of the House appropriations bill contains a provision that would federally ban hemp-derived THC, too.

Whether that language survives the full House, much less the Senate, is unknown but if the first half of 2025 was radio silent on cannabis proper, the opposite can be said regarding the activity surrounding intoxicating hemp.

I don’t know where this lands but when we read about the legalization of cannabis in the history books, the emergence of hemp-derived cannabinoids, intentional or not, may be viewed as the un-gating catalyst.

Uncertain Tax Provisions (UTP) was another hot topic in Chicago, as most operators have stopped paying 280E.

Schedule III, once published in the Federal Register, will stop the clock for the calendar year (which we still believe will be 2025).

There’s a school of thought that the 280E tax clock stopped when the 252-pages of medical evidence was submitted by the HHS in the Summer of 2025.

Beyond that, David Boies may soon have the opportunity to argue before the Supreme Court that U.S. cannabis can claw back 280E to the statute of limitations.

Capital markets, custody, and exchange listings—the Holy Trinity for U.S. cannabis investors—will require congressional action, starting with SAFEST banking, which has been pledged by President Trump and signaled by congressional Republicans.

This legislation, along with the already introduced STATES 2.0 and PREPARE Act, will ride or die with President Trump.

There is obvious skepticism given the lack of action to date, but efforts and energy are being expended behind the scenes.

In terms of looming debt maturities and funding constraints, we expect the winners and sinners will continue to separate, not unlike what we saw across tech in Y2K.

There will be a handful of FANG-type names—along with an abundance of Pets.coms—but until we solve for some/ (m)any of the impediments, the status quo will continue to weed out the weed companies.

The popular perception in Chicago was that Canada has already gone through much of what the U.S. is experiencing and there are fundamental improvements in select LPs—Village, Rubicon Organics, Cannara Biotech—given domestic trends and a line-of-sight on international growth.

Glass House and C21 Investments were two U.S players that flexed some growth, and Andira Pharmaceuticals left investors wide-eyed after sharing their vision of the future of healthcare.

Freddy Benson Gomes from ATB top-lines his conference take:

As you know we were at the Benzinga Cannabis Conference in Chicago this week and had the chance to chat with operators and investors.

A special thanks to Todd Harrison and the Lane duo for the excellent, well-organized, well-attended, and for-a-just-cause Mission Green dinner.

Here are our takeaways from the conference:

Realism Takes Over: We found that operators are much more realistic in their expectations vs previous years. They recognize the reality of price compression and are adapting strategies and cost structures for competitive pressures rather than saying/ hoping things stabilize/ improve. The focus is on operating efficiencies and cash flow generation to make it through (aka survive) the headwinds.

Rescheduling to Happen When Politically Convenient: MSOs are coordinated in lobbying for rescheduling. The consensus is rescheduling relies on Trump’s initiative and his political will. The good news is there appears to be no real strong opposition within the administration. The bad news is that cannabis isn’t a priority and there are other issues the administration is dealing with. This could become a more relevant theme into the mid-terms, when most stakeholders think something could happen.

Conditions for M&A Aren’t Here: MSOs aren’t excited about large-scale M&A near-term. The priority today is to get refinancings done and make it through a “knife-fight” year. Most companies simply don’t have the cash for M&A.

If rescheduling or other regulatory catalysts don’t materialize over the next 12-18 months, that’s when conditions could be more conducive to M&A as (i) lenders would stop “kicking the can down the road” and (ii) efficient operators would further distance themselves. If a regulatory catalyst arrives, it will buy operators more time and consolidation.

The Tax Liability Wagon: Most of the industry isn’t paying 280E but the expectation is that over the next year the IRS will take action to litigate the issue. The base-case assumption is that companies would get into a settlement and pay the 280E balance in installments and with a discount.

What The Hemp Is Going On?: There’s a lot of uncertainty and mixed opinions on hemp. Some believe a crackdown on the hemp market is inevitable (maybe with a carve-out for certain categories, like beverages); others believe nothing will happen and hemp will continue to cannibalize MSO sales.

Watching International from a Distance: MSOs are looking abroad but we didn’t get a sense that companies are ready to act near-term. Most are still in the early stages of trying to understand the opportunity. LPs, on the other hand, continue to be excited about the growth they are seeing in Germany and other global markets.

Lot of Debt, not Equity: We view overwhelming interest for debt as opposed to equity skewed by survivorship bias (given equity declines in the sector, but it also reflects as reality that, with a cost of debt often at 15-25% in the industry, returns on equity need to be enormous to justify the risk-reward.

Sweet Home Chicago

Benzinga traditionally hosts two marquee events annually but they merged efforts this year to create one big, beautiful event.

I always believed the people and products were the best parts of this industry and both were on full display in The Windy City.

The highlight of the conference, for me, is always the BZ Executive Dinner to benefit Weldon Angelos and Mission [Green].

This effort began five years ago as a way to say “thank you” to those who’ve supported the cause and has evolved into a passion project to align the industry behind Weldon, who I believe is in a unique position to effect federal cannabis reform.

What started as a small group grew into a legitimate gala last year, which set a high bar that we intended to exceed.

We had an awesome venue, the gift bags took on a life of their own and we had 64 confirmed guests (including executives from AdvisorShares, Alliance Global Partners, Seymour Asset Management, NCIA, Cresco Labs, KCSA, Mattio Communications, Trulieve, Verano, Curio Wellness, Sundial, Village Farms, Curaleaf, Dutchie, several investment firms and many more) to host and hopefully harness support.

There are always unexpected twists when it comes to these things and this year was no different, a fact quickly established whe we learned three weeks ago that BZ booked the wrong venue (RPM Steak vs. the larger indoor/outdoor RPM Events).

While that required several tweaks—no live music, no Tempresses serving THC drinks—the show must go on, and it did, as human capital collected, gripes were (largely) left behind and we spent the night discussing our world and how to improve it.

I will offer one observation: there is a coordinated effort among the stakeholders who are doing the heavy lifting on federal reform…

…not to talk about federal reform. They know talk is cheap and that there is a painful history of false hope and empty promises. Less is more until there’s something to say.

Still and so it’s said, I left Chicago feeling even more optimistic we’ll see federal reform in 2025 and at this moment in time, we stand at the precipice of historic change.

Travel hiccups aside, the people—and yes, the products—combined for a memorable evening that forged new friendships, talked through tough topics and drove support for Mission [Green] as we continue to fight for people who can’t fight for themselves.

Thank you to our sponsors for the epic gift bags

The Morning After

I awoke on Tuesday, took a quick meeting, and sat with two of the more active members of Fight Club, trying to toe the line between engaging content and avoiding saying anything that could be taken out of context.

Weldon Angelos and Trulieve CEO Kim Rivers

From there, Weldon and I bee-lined to Sunnyside River North, where Cresco activated their participation in Mission [Green] Alliance, to meet the team.

^ This news came one week after Trulieve announced they were joining the round-up program, as well.

Team Sunnyside welcomes Weldon Angelos

Weldon and I, waiting for the steak to finally sizzle.

Thank you to those who support Mission [Green]: AdvisorShares, Alliance Global, ATB Financial, Seymour Asset Management, WURK, NCIA, Benzinga, Cresco, Foley Hoag, Cannara Bio, Mattio, Ipava State Bank, Trulieve, Skyvest Partners, Speedwell Partners, Verano, Curio, Cannabist, Ensemble Brands, Hadron Capital Cayman, Phylos, U-Bet Advisory, Village Farms, Associated, Sundial, CCELL, Turning Point Brands, Key Investment Partners, Artemis Partners, Missouri Health & Wellness, Ascend Wellness, L5 Ventures, , SAX LLP, Fisai, L2 Ventures, GrowGeneration, Ananda Strategy, Leaflink, Trulieve, Glass House, Andira Pharmaceuticals, Live Nation Entertainment, Danio Capital, C21 Investments, PharmaCann, Blank Rome LLP, Sweed, Curaleaf and Dutchie.

If you’d like to help Mission [Green] change federal cannabis policies, please click here.

Have a safe journey and please enjoy responsibly.

CB1 has positions in / advises some of the companies mentioned and nothing contained herein should be considered advice.

Photo: Javier Hasse

This article is from an external, unpaid contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.