This year in cannabis has been a game of evolution—an industry maturing through consolidation, recalibrated investment strategies, and stark shifts in how success is defined. From the lens of The Panther Group, here’s a breakdown of the year’s highlights, challenges, and what lies ahead for the cannabis space.

The Rise of Consolidation: A Win for Stability?

Consolidation has been the name of the game, particularly in mature markets like Massachusetts. A key example is Pioneer Valley’s acquisition, where a larger player integrated their manufacturing capabilities to form a full vertical. This type of consolidation reflects the cannabis industry’s natural evolution, mirroring patterns seen in other emerging markets.

For businesses, consolidation strengthens operational frameworks, bringing smaller players together to create robust entities. For consumers, the potential upside is better quality products as seasoned operators enter the fold. However, not all markets experience consolidation equally. In Florida, for instance, consolidation often favors monopolistic tendencies, resulting in fewer consumer benefits and higher barriers for smaller operators.

This dual nature underscores a hard truth: consolidation isn’t inherently a win or a loss—it’s about execution and market dynamics.

The Pivot Away from Equity

A defining challenge of 2024 has been the scarcity of equity capital. By midyear, Panther shifted focus from raising equity to prioritizing debt financing for established businesses. This wasn’t a decision taken lightly but reflected broader economic headwinds and investor sentiment.

Early in the year, our goal was to help every cannabis entrepreneur we could, but as reality set in, we became more selective. The pivot marked a sobering realization: not all businesses can survive. Our role evolved into supporting the top-tier 20%—the stable, scalable operators who are critical to the industry’s long-term health. Helping these businesses sustain and grow is crucial for market survival and maturation.

Lessons from the Investment Landscape

A significant shift in cannabis investing over the last several years and even more pronounced this year and expectedly moving forward has been the demand for historical performance. Dreamy pitches and ambitious projections no longer cut it. Investors are looking at track records and proven expertise, especially in saturated or price-pressured markets. 

For new market entrants, this means one of two paths:

1. Partnerships: Align with experienced operators to leverage their knowledge and avoid costly missteps.
2. Learning by Failing: Enter independently but be prepared to fund your learning curve—a strategy requiring deep pockets and resilience.

Either way, success is about strategy, not just enthusiasm.

If your business has a board of directors or a management team, provide a list of board members and key decision-makers. Having clear governance, accountability, and leadership in place helps give lenders confidence in your ability to manage the business and the debt they’re considering offering.

Financial preparedness is arguably the most important part of securing debt financing. Lenders need a clear and accurate picture of your company’s financial health, and that starts with up-to-date financial statements. This includes profit and loss statements (P&L), balance sheets, cash flow statements, trailing 12-month financials, and forecasted financial projections. These documents must reflect the complexities of the industry, from compliance costs to cash-only transactions, and be an accurate, reliable financial representation of the business. Lenders will be especially interested in your historical financials and current financial projections these documents must be accurate and aligned with every component of the business. Lenders will want a detailed plan of how you plan to use the loan to grow the business. Having a clear 3- to 5-year pro forma that shows your current and projected revenue models is key. It’s essential to disclose any financial liabilities, such as existing debt your business already holds, as well as their terms. Lenders want to see that you’re managing your existing debt responsibly and that taking on new debt won’t overburden the business. Transparency is important and helps get deals across the finish line.

A Shift in Operator Dynamics

The green rush is over. The cannabis space, once open to anyone with a license and a dream, now demands sophistication and adaptability. While the first generation of operators often relied on trial and error, today’s market rewards expertise and innovation.

Even established Multi-State Operators (MSOs) aren’t immune to the pressures of evolution. Many struggle to innovate, leaving room for smaller, more agile players to disrupt the status quo. This dynamic underscores a key theme: staying on top requires constant reinvention, whether you’re an MSO or a newcomer with a fresh approach.

A Shift Towards Localized Events for Targeted Value:

The industry is witnessing a move from large-scale, biannual trade shows to more localized and frequent events. These localized shows are tailored to connect businesses with regional opportunities, customers, and niche markets. This shift reflects operators’ reduced willingness to spend on large booths and the need for tangible ROI, as the large-scale gatherings increasingly serve as networking hubs rather than deal-making venues. Meanwhile, pre-vetted, curated networking opportunities at such events could still enhance their relevance and impact for capital-raising or M&A activities.

Finally, having clear and documented internal policies and procedures is another important aspect of investor preparedness. This includes your accounting policies, cash handling procedures, and decision-making processes. Lenders want to know that you’re running a tight ship and that your business has the internal controls needed to manage finances responsibly. A well structured business with defined policies is not only more efficient, but it also gives lenders confidence that their money is being managed by a team that knows what it’s doing.

What Lies Ahead: Challenges and Opportunities

The cannabis industry is still in its early days—perhaps the first quarter of a long game. But the field is narrowing, and only the best-equipped will thrive. For Panther, this year reinforced several truths:

• Resources are everything: Talent, capital, and experience are non-negotiable for success.
• Investors are smarter: The days of funding untested operators are behind us. Experience and proven results drive investment decisions now.
• Partnerships matter: The path to success increasingly lies in collaboration, not competition.

The industry will continue to evolve, and with it, so will the opportunities. For those who adapt, innovate, and approach strategically, there’s still plenty of green ahead. But for the unprepared, the risks are higher than ever.

Closing Thoughts

At Panther, our mission remains to guide the industry toward sustainable growth, prioritizing operators who can weather the storm and drive progress. While 2024 brought its challenges, it also solidified our belief in the potential of cannabis. The rush may be over, but the game is far from finished. The winners will be those who play strategically, think long-term, and evolve with the industry.