'Building a new industry from scratch is hard': Cannabis firms brace for more spilled blood in 2020

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The new year is likely to kick off with a wave of bankruptcies and consolidations as struggling pot companies run out of cash

As the cannabis industry comes off an annus horribilis, things are expected to get worse before they get better in 2020.

“Cannabis is just a little baby, it’s barely able to sit up yet or roll over,” said Paul Rosen, managing director of BreakWater Venture Capital and a co-founder of the company that became Cronos Group Inc. “The takeaway of the last six months is that building a new industry from scratch is hard and you’re going to have some skid-outs, you’re going to have some blood spilled. It’s natural.”

Consolidation is also likely, but not necessarily to the benefit of the companies being acquired, said Troy Dayton, CEO of cannabis investment and research firm Arcview Group.Paul Rosen, managing director of BreakWater Venture Capital “You’re going to have opportunities for distressed-asset deals,” Dayton said. “We’re going to start seeing a lot of roll-up strategies, collecting companies for pennies on the dollar.

“That means there will be a Wednesday morning in November when 14 to 18 Republican senators wake up representing a state that has legalized medical cannabis or cannabis in some form, and they’ll go to work that day with that frame of mind,” he said. “That’s the beginning of the end” for federal prohibition.

 

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Maybe they need some help from those who were involved in this so called 'new industry' for decades before the government decided it should be legalized You know the ones who not only managed to make money but provided a far superior product

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