Loaded Question: Do you think regulators should address ongoing A/R issues in cannabis, and how?
Marianne Cursetjee | Alibi | CEO
In general, less government interference in business operations makes sense to me. Operators should be able to stand on their own and succeed or fail without regulators dictating the details of business policies and procedures. Suppliers (farms, processors, wholesalers) should follow normal credit processes which would include an agreement from account guarantors and be diligent with extending credit. I think regulators should have oversight upon license transfer and treat the license as an asset that can be collateralized.
However, since cannabis is different from normal businesses, the challenges are greater, and the black market is still a force, a bit of regulatory assistance could be helpful. I’m curious what the data shows, but my experience indicates that unpaid debt is a bigger problem in states where there are too many producers. In Oregon, if a farm isn’t paid by a retailer and chooses to stop selling to that shop, that shelf space is immediately filled by another farm and the cycle is repeated. I believe that oversupply is the biggest driver of the accounts receivable problem and since licenses are issued by regulators and commerce is restricted to single states, that regulators can and should be helpful to operators.