The cannabis industry in the United States is worth more than $2 billion (U.S.) a year, Aaron Smith, executive director of the National Cannabis Industry Association, told Inc. magazine, and “we’re now seeing investors enter the space with real skin in the game.”
Along comes Privateer Holdings, which claims to be the first U.S. private equity firm devoted to helping grow pot startups. The bulk of the Seattle-based firm’s capital comes from high-net-worth individuals. Its first investment was in Leafly, a website where users review strains of medical marijuana.
The big problem is how to scale these types of businesses, even as the regulatory environment loosens up in several states. Mr. Smith points to two big legal hurdles: the U.S. Treasury can forcing dispensaries to change banks several times a year, making it tough for lenders to sign on. And the Internal Revenue Service (IRS) won’t allow pot companies to deduct business expenses.
“It’s all devastating and cruelly ironic policy because it doesn’t create problems that black market drug dealers have to put up with,” Mr. Smith says.
Family businesses have some work to do
Talent acquisition is the top concern in the next five years for 62 per cent of Canadian family businesses, according to a new survey from PwC. “Typically, family businesses are not able to compete with multinational players when it comes to compensation,” Sharon Duguid, director of the company’s Centre for Entrepreneurs and Family Enterprise, says in a press release. Other findings include:
- Fifty-one per cent of Canadian family businesses plan to hand over management to the next generation, while 14 per cent will transfer ownership but employ non-family members to run the companies. Sixteen per cent don't have a plan.
- Sixty-five per cent have no global sales, and in the next five years, 26 per cent have no plans to move into new markets. “Growth activity lies in the developing markets, where the demand is,” says Tahir Ayub, Canadian Private Company services leader at PwC. “It's impossible to grow significantly in the next five years unless you dive into the international markets.”
A rare win in court
Twelve days after Santa Barbara, Calif.-based Solid Oak Inc. realized hackers were stealing the company's parental filtering software, CYBERsitter, founder Brian Milburn told Fox News that the offending party repeatedly tried to shut down his business. In court documents, he accused Chinese hackers of interfering with servers, spying on his employees through their own webcams, and accessing sensitive documents. He was awarded a $2.2 billion (U.S.) settlement. The case highlights the fact big companies aren’t the only targets of cyberattacks, merely the most high-profile ones, and experts told Fox News that small and medium-sized businesses are particularly vulnerable. They’re easier to hack, and aren’t as likely to detect unauthorized activity.
EVENTS AND KEY DATES
B.C. trade strategy with India
Business leaders from India and B.C. will meet to discuss investment opportunities at the BC-India Global Business Forum on March 12, at the Vancouver Trade and Convention Centre. India is identified in the BC Jobs Plan as a priority market, and the business forum is a key part of the province’s longer-term economic and trade strategy with India. It will profile key sectors and include discussions and presentations, as well as networking sessions to facilitate business opportunities and business matching.
‘One of the top entrepreneurs in the world’
Gururaj Desh Deshpande will be the keynote speaker at a dinner event jointly hosted by TiE Ottawa and the University of Ottawa on March 12. The serial entrepreneur started his career in Canada and “became one of top entrepreneurs in the world.” He’ll tell the story of his journey from a student at the University of New Brunswick to successful entrepreneur.
EDITOR’S PICKS FROM REPORT ON SMALL BUSINESS
Real estate’s down? No worries
Working in the real estate industry seems pretty risky right now – but is it really? Small business owners tied to the real estate market don’t appear too worried. In fact, a number of entrepreneurs involved in the appraisal, staging, moving and buying-selling business view the uncertainty as an opportunity to grow their independent businesses.
FROM THE ROSB ARCHIVES
Cramped quarters cramping style
For seven years, Aaron Lloyd had found success running Jean Coutu Pharmacy, one of three pharmacies in Sackville, N.B., and the only franchised outlet of the Longueuil, Que.-based Jean Coutu Group Inc. drugstore chain in the small town. By 2008, however, he realized that cramped quarters prevented him from offering the full slate of services to keep customers coming, and opened the door to potential new competition, in this case study from December, 2012.
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