When the new frontier of rescheduling comes, what can cannabis cultivators learn from microbreweries?

With the drive to federalization starting to accelerate, momentum is building around rescheduling cannabis. This would bring a host of changes that are frequently discussed, such as easier access to capital and banking along with the removal of 280E. A crucial big picture issue that is less front and center, however, is the type of competition that shifting legal boundaries will welcome into the sector.

Specifically, the likely entry of two formidable forces—Big Pharma and Big Tobacco—could reshape cultivation and distribution. It could spell a dramatic shift for an industry that was built on small- to mid-sized companies growing their market share state by state.

There is a parallel to be found in the rise of microbreweries, which gained incredible traction when mainstay national and global brands began watering down options for consumers. The evolution of Sam Adams from local brew to global distributor and the purchase of Anheuser Busch by In-Bev stunned beer enthusiasts and created an opportunity that burgeoning microbrewers did not miss.

The ascent of microbreweries not only revitalized the beer industry, but it also underscored the importance of fostering intimate customer connections, building exclusive brands, developing strong financial budgets and projections, and adapting to new challenges. These lessons can serve as a compass for cannabis entrepreneurs navigating an industry that may see the entry of synthetics and mass distribution.

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This article is part of our regular series contributed to Cannabis Business Executive by  AAFCPAs’ Cannabis Practice leaders Dave McManus, CPA, CGMA, Janice O’Reilly, CPA, CGMA, and Joshua England, LLM, Esq.