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1.97 MB
Extraction Summary
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People
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Organizations
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Document Information
Type:
Investment report / market analysis
File Size:
1.97 MB
Summary
This document is page 44 of a Cannabis Investment Report published by Ackrell Capital in December 2017. It analyzes the 'Distribution Outlook' for the cannabis industry, discussing tax issues, regulatory challenges in states like Colorado, California, and Nevada, and compares US distribution models to international markets like Germany and Uruguay. The document bears a 'HOUSE_OVERSIGHT' Bates stamp, indicating it was likely produced as evidence for a congressional committee.
Organizations (5)
| Name | Type | Context |
|---|---|---|
| Ackrell Capital | ||
| Ackrell Capital, LLC | ||
| FINRA | ||
| SIPC | ||
| California’s new cannabis regulatory agency |
Locations (8)
| Location | Context |
|---|---|
Key Quotes (4)
"Tax Issues Related to Distribution. States and localities that legalize cannabis are focused on the potential to generate tax revenue from the industry."Source
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Quote #1
"However, oversaturation in the number of dispensaries in certain jurisdictions, such as Colorado, has led to a very competitive environment, consolidation and moratoriums on issuing new local dispensary licenses by various municipalities."Source
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Quote #2
"For example, the number of dispensaries operating in the greater Los Angeles region is expected to decrease significantly in the short term as California’s new cannabis regulatory agency begins its oversight and enforcement efforts in 2018."Source
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Quote #3
"In certain legalized international markets, such as Germany and Uruguay, cannabis products are sold primarily through existing pharmacy networks"Source
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Quote #4
Full Extracted Text
Complete text extracted from the document (3,097 characters)
ACKRELL
CAPITAL
Cannabis Investment Report | December 2017
CAPITAL
Cannabis Investment Report | December 2017
and other distribution intermediaries are subject to county, municipal and other local regulations that
may restrict or even prohibit distribution activities. The success of any dispensary operator or distribu-
tor depends on anticipating and complying with these regulations.
may restrict or even prohibit distribution activities. The success of any dispensary operator or distribu-
tor depends on anticipating and complying with these regulations.
Tax Issues Related to Distribution. States and localities that legalize cannabis are focused on the
potential to generate tax revenue from the industry. Ambiguous, constantly changing and potentially
burdensome taxation rules may make it difficult for dispensary operators or distributors to remain in
good standing with licensing, regulatory and tax collection agencies and may negatively impact their
financial results.
potential to generate tax revenue from the industry. Ambiguous, constantly changing and potentially
burdensome taxation rules may make it difficult for dispensary operators or distributors to remain in
good standing with licensing, regulatory and tax collection agencies and may negatively impact their
financial results.
Distribution Outlook
We expect dispensaries across the United States to increasingly seek to provide modern retail experi-
ences that are supported by e-commerce applications. We also expect that the most well-run dispensa-
ries will continue to generate significant cash flow at compelling margins. Dispensaries should be able
to gain advantage by producing their own products, by developing strategic or exclusive relationships
with specialty producers or by finding ways to generate customer loyalty. However, oversaturation
in the number of dispensaries in certain jurisdictions, such as Colorado, has led to a very competi-
tive environment, consolidation and moratoriums on issuing new local dispensary licenses by various
municipalities.
We expect dispensaries across the United States to increasingly seek to provide modern retail experi-
ences that are supported by e-commerce applications. We also expect that the most well-run dispensa-
ries will continue to generate significant cash flow at compelling margins. Dispensaries should be able
to gain advantage by producing their own products, by developing strategic or exclusive relationships
with specialty producers or by finding ways to generate customer loyalty. However, oversaturation
in the number of dispensaries in certain jurisdictions, such as Colorado, has led to a very competi-
tive environment, consolidation and moratoriums on issuing new local dispensary licenses by various
municipalities.
The distribution segment is subject to some of the strictest and most frequently changing regu-
lations applicable to the cannabis industry. While distribution opportunities may arise with changes
in law, some legislation may cause significant disruption. For example, the number of dispensaries
operating in the greater Los Angeles region is expected to decrease significantly in the short term as
California’s new cannabis regulatory agency begins its oversight and enforcement efforts in 2018.
lations applicable to the cannabis industry. While distribution opportunities may arise with changes
in law, some legislation may cause significant disruption. For example, the number of dispensaries
operating in the greater Los Angeles region is expected to decrease significantly in the short term as
California’s new cannabis regulatory agency begins its oversight and enforcement efforts in 2018.
The distribution services subsegment in the United States is still in its infancy and has experienced
a number of growing pains related to a lack of well-established distribution channels. For example, a
Nevada law generally requiring dispensaries to use third-party distributors proved troublesome when
dispensaries sold out of product within 48 hours after legal recreational cannabis sales commenced in
the state. As more distribution channels and points of contact are established, we believe that opportu-
nities for third-party distribution services companies will increase.
a number of growing pains related to a lack of well-established distribution channels. For example, a
Nevada law generally requiring dispensaries to use third-party distributors proved troublesome when
dispensaries sold out of product within 48 hours after legal recreational cannabis sales commenced in
the state. As more distribution channels and points of contact are established, we believe that opportu-
nities for third-party distribution services companies will increase.
In certain legalized international markets, such as Germany and Uruguay, cannabis products
are sold primarily through existing pharmacy networks (Argentina plans to do the same). While
cannabis-derived pharmaceuticals may ultimately be distributed the same way in the United States,
we believe the future domestic distribution channels of other types of cannabis products will closely
resemble those of alcohol and tobacco products.
are sold primarily through existing pharmacy networks (Argentina plans to do the same). While
cannabis-derived pharmaceuticals may ultimately be distributed the same way in the United States,
we believe the future domestic distribution channels of other types of cannabis products will closely
resemble those of alcohol and tobacco products.
44
© 2017 Ackrell Capital, LLC | Member FINRA / SIPC
© 2017 Ackrell Capital, LLC | Member FINRA / SIPC
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