If the state government enacts legislation to legalize and regulate recreational cannabis, there would be yet another roadblock that could stifle the growth of a potentially budding industry: the stigma around marijuana.
The four-member panel featured Stacey Udell, director of valuation and litigation services at accounting firm HBK; Ashesh Shah, founder and CEO of Solo Sciences, a company that provides patent verification to certify the authenticity of a product; Peter Kelly, a partner at law firm Fox Rothschild LLP; and Brian Staffa, a partner and chief operator at BSC Group, a cannabis operations consulting firm.
Staffa and Shah both agreed the stigma around marijuana and a fear of a run-in with the federal government will continue to make most companies wary of offering services to marijuana businesses.
And those often are much-needed back-end services any business would need to function, such as financial lending and deposit services, equipment leasing and software and information technology.
“Because of the situation and the lack of resources, they can’t lease equipment or a crane, they can’t actually even get base financing on hard assets,” Shah said, noting the struggles the cannabis industry faces in other states.
The most notable case in point: the unwillingness of banks to offer lending and deposit services to marijuana businesses because the practice is barred under federal law.
Staffa said if New Jersey legalized adult-use cannabis and ramped up the surrounding infrastructure, then vertical integration — when a dispensary manufactures, cultivates, processes and sells marijuana — would gradually phase out in place of a “legit supply chain.”
“Ultimately, we’re trying to create an industry,” he said.
And such an industry would be dependent on the back-end support services offered by companies still wary of getting involved with the marijuana business.
“Is it the same that Microsoft sells office to dispensaries? Like are they in the cannabis business? Shah asked. “Whether you put cannabis in this glass or wine or water, it’s still a glass.”