There are so many forces pushing on a common sense approach to the industry. I think what CTrust is doing to mitigate risk by understanding what all the drivers are so lenders and brave equity people can come in and lend.

For the first time since the industry’s birth, we are seeing signs of potential market contraction – a decrease in consumption, misalignment between supply and demand, lack of access to capital, and consequent increasing number of businesses failure.  While we await potential regulatory improvements supporting continued industry maturation, the only thing that will truly have a positive and immediate market impact is more equitable and cost-effective capital flow; and the only way that will happen is via quantifiable, verifiable, systematic, and ultimately trusted visibility into cannabis businesses performance. The time for true transparency is now and today is the day we must embrace sophisticated business credit scoring allowing mature access to capital.

The starting point is always finance. It is the fundamental precepts of the building of any organization.

A cannabis credit rating and score a unique blend of both financial health and folks behind that can actually shepherd a business through this industry because the rules don’t make sense.

It is difficult for lenders to get a strong position to limit their risk. They can’t take the license, they can’t take the cannabis, they can take PP&E, it is a difficult environment for new capital in today’s market.

We are at the end of the beginning…I think CTrust is a breath of fresh air, I can’t imagine any other rating company coming into this industry. It takes years to have the institutional knowledge, its complex and its fascinating.

In a usual industry there are different ways you can construct a business based on the data, on who your consumer is, the cost of doing business, the cost of compliance, the cost of staying licensed, none of these numbers are real in the cannabis business and can change monumentally over night.

There’s a lot of similarities between the risk evaluation and the due diligence that I do as a regulator as much that is done in the lending space to determine whether or not it is a good loan.

There are great risk adjusted opportunities. There is not enough capital to pass up the large appropriated levered businesses to even get to the smaller operators in this environment.

Understanding the limitations put in place by the regulatory structure is important. We create a framework for the whole industry to operate in. If built correctly, neither benefits or negatively impacts any company at a higher ratio. Everybody has the same opportunity to fail in an effective regulatory structure. The receivership model has seem to be effective in this jurisdiction.

There is so much need for capital in this space right now and so few dollars going into it. There’s actually not a lot of reason to invest without good corporate governance. You would have to pass up all the groups with corporate governance to get to an operator that doesn’t have corporate governance.

Businesses have no place to go for more money. When things change and businesses go back to their investors for more money it stills up lack of confidence in the business.