Celebrating developments that defined the cannabis industry in 2022 (and their implications for 2023)

cannabis ticker tape
2022 saw many events that resulted in positive changes for the cannabis industry, the cannabis community, and industry sectors tangentially connected to cannabis. Before turning our focus to a new year, let’s celebrate a few of these memorable and notable developments together, and unpack their potential implications for 2023 and beyond.

1. Capital markets proved resilient for cannabis

A prevalence of news focuses on a downturn in the availability of capital for the cannabis industry. However, down does not mean out. Investors with an affinity for cannabis continue to see opportunity amid the challenges.

Notable deals include:

  • Tilray Brands & Montauk Brewing Co. – On Nov. 7, Tilray Brands announced the acquisition of Montauk Brewing Co., a leading craft brewer in New York. Tilray had previously acquired SweetWater Brewing Co., another leading craft brewer in the U.S. with distribution across more than 40 states; Alpine and Green Flash, iconic Southern California brands; and its leading lifestyle bourbon and spirits brand, Breckenridge Distillery. This deal highlights a strategy we discussed in Q2: Consider other ways to break into a market.
  • Cresco Labs & Columbia Care – On March 23, Cresco Labs announced the acquisition of Columbia Care, Inc., in a deal valued at more than $2 billion. Upon closing (expected to occur in Q1 2023), the deal will likely result in the largest multistate operator when measured by pro-forma revenue, Cresco wrote in their release.
  • Ascend Wellness & MedMen Enterprises and Verano Holdings & Goodness Growth Holdings – Ascend Wellness entered into an agreement to acquire MedMen Enterprises’ New York operations, and Verano Holdings entered into an agreement to purchase Goodness Growth Holdings. Although neither closed, it was not due to a lack of available capital.

In addition to the mega-deals above, we still see investment capital readily available for operationally efficient and effective companies, and opportunities that project positive cash flows.

And while depressed wholesale and retail prices, limited enterprise values, and other economic challenges persist, investors can seek out solid brands and businesses at a discount from six months ago. As a result, we expect capital to remain available for the right deals in 2023. Investors will focus on deals that improve EBITDA and cash flows and look for opportunities to acquire assets at depressed prices.

2. Midterm elections expanded the cannabis map

On Nov. 8, adult-use cannabis was on the ballot in Arkansas, Maryland, Missouri, North Dakota, and South Dakota. Although the vote counts didn’t break in favor of a clean sweep for legalization, having ballot initiatives in five states should be viewed as positive for the continued erosion of the stigma around cannabis and a step toward further widespread acceptance. 

Legalization passed in Maryland and Missouri, opening two additional markets for adult use. The bills in both states included provisions to address decriminalization, expungement, and other social equity initiatives. (More on this later.)

In the next election cycle, we expect the cannabis industry to revisit the ballot initiatives in Arkansas, North Dakota, and South Dakota to rework provisions enabling them to get back on the ballot in 2024 with an improved chance of passing. We also expect continued pushes in medical-only states for adult-use legislation.

3. Cannabis presented different market opportunities for investors

The stock market severely punished many industries in 2022, and technology and cannabis were among the most impacted. Although both experienced significant declines in market caps, the fundamentals of the cannabis industry mean that the market should view the cannabis sector differently than other industries. While limited-license markets and markets opening through new legislation may appear to be paradoxes in market opportunity, both present unique prospects for investors: Limited-license markets present opportunities for strong gross margins, and states with medical-only – or no legalization – present growth opportunities. Many other industries often targeted by investors, particularly technology, may be reaching a maturity level that will limit growth. As a result, investors are increasingly focused on cutting costs and improving profitability. Cannabis, on the other hand, appears to have a healthy runway in the near term to focus on growth and reward companies that can grow both revenue and profitability.

4. Cannabis operators embraced technology to improve profitability

Cannabis has long been an industry where the publicity is focused on intangibles: high-quality flower, increasing THC, and branding. But cannabis technology has been gaining attention and expanding to meet the needs of the operators it serves; options for industry-specific technology to support key operational and financial processes are becoming increasingly sophisticated. Technology continues to be a challenge, as many enterprise technologies will not engage clients in the industry, but others are using this as a key point of product differentiation as they take advantage of the open space. Take, for example, Dutchie, who went live with their new combined point-of-sale platform in August 2022. The new solution brings together the point-of-sale capabilities of Dutchie solution with enterprise resource planning solution Leaflogix, which the company acquired in 2021.

5. Doubling down on the commitment to social justice

2022 saw key developments on this front from a number of sources, including:

  • In legalizing adult use, Maryland and Missouri also included provisions to advance critical social justice initiatives for the industry. 
    • In Maryland, this included:
      • The expungement of convictions where the only charge was possession of cannabis
      • The right to petition for resentencing of individuals incarcerated for cannabis possession
      • Decriminalization of possession for up to 1.5 ounces through June 30, 2023 (the expected date of legalization)
      • Allowing the grow of up to two plants beginning July 1, 2023. 
    • In Missouri, this included:
      • The expungement of misdemeanor marijuana offenses
      • Decriminalization of possession for up to 3 ounces of cannabis flower or the equivalent in other forms
      • Allowing the grow of up to six plants beginning July 1, 2023 (with proper registration)
      • Establishing an additional 6% retail tax on nonmedical cannabis sales to support certain community services. 
  • On Oct. 6, President Biden issued a statement on marijuana policy reform focused on three priorities: 1) individuals charged or convicted of prior federal offenses for simple possession of marijuana in violation of a limited set of federal and District of Columbia laws will be issued complete and unconditional pardons, 2) governors are urged to issue identical orders at the state level, and 3) the Secretary of Health and Human Services (HHS) and the Attorney General have been asked to initiate the administrative process to review marijuana’s Schedule 1 classification under the CSA. While the announcement’s legal substance is being debated, it represented a significant shift in federal posturing, which has led to optimism that there will be action on the SAFE Banking Act, and the industry eagerly awaits the review of Schedule 1 classification. 
  • On Nov. 4, it was announced that Combs Enterprises, owned by Sean “Diddy” Combs, would acquire assets in New York, Illinois, and Massachusetts from Cresco Labs/Columbia Care. According to a release, the deal is expected to create the largest black-owned cannabis company in the world, and affirms Combs’ “commitment to the economic inclusion of underrepresented groups in cannabis.” 

For 2023, we expect the cannabis industry to continue focusing on social justice initiatives. Advocates have demonstrated a strong resiliency over a long period, and 2023 bodes no different. An inclusive community is core to the history of cannabis and remains one of the industry’s benchmarks for success. 

Celebrating 2022’s successes also provides a chance to double down and drive initiatives even further. Approach 2023 with all that a new year brings: An opportunity to set a new course and implement new plans to grow revenue, provide opportunities for your employees to grow and thrive, and make an impact in your local community.


Benny Herman, CPA, Director


Heather Carter, Technology+, Global Consulting Solutions



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