Hard Questions for Cannabis Founders: Tony Schor on Creative Capital and M&A Strategies

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Guest (Tony Schor): Creative ways to secure capital oftentimes come through partnerships, and I'll tell you — the only way this industry will continue to thrive is through these partnerships. Bryan Fields: What's up guys, welcome back to another episode of The Dime. I'm Bryan Fields, with me as always Kellen Finney, and this week we've got a very special guest: Tony Schor, President of Schor Strategic and Chairman of the Cannabis Hall of Fame. Tony, thanks for taking the time — how are you doing today? Tony Schor: Great, Bryan, appreciate being here — Kellen as well, thank you. Kellen Finney: Excited to dive in, Tony. I'm doing really well, really looking forward to talking with you and diving into all the fun aspects of M&A and how capital moves around the cannabis space. But how are you doing, Bryan? Bryan Fields: I'm stoked. One of the topics I'm really excited about is partnerships — I don't think people recognize how challenging that is, and how crucial it is, because if you start off on the wrong foot it can be detrimental. For an industry like ours, partnerships are likely one of the most important things to future success. But before we get into the fun topics, Tony, we've got a very serious East Coast/West Coast loyalty question — if you had to choose a coast? Tony Schor: I'm based in Chicago, smack in the middle. From a business standpoint, the East Coast is thriving right now — that's where cannabis is moving, where deals are being done. Finally, after a long time of people being afraid to step into New York, they've done so — you've seen some of the large MSOs move in. But you have to appreciate and respect the legacy of cannabis, and that legacy starts on the West Coast and mountain states — Oregon, Washington, Colorado. So I'm waffling, but my loyalty is to the industry growing, and it grows through partnerships, because nobody can do it alone. Bryan Fields: I love it — a beautiful PC answer from the Chairman of the Hall of Fame. Tony, can you give a quick background on how you found your way into the cannabis industry? Tony Schor: Sure — after 30 years running an investor relations consulting business, working with publicly traded companies across all types of industries, I always had a desire to get into cannabis. After working with a small California public company that was struggling and trying to grow by acquisition, I saw the opportunity and thought this was the right pivot for me. Back in 2020 I pivoted my business completely into cannabis, representing the M&A side. Today I represent both buyers and sellers of cannabis assets across the country, in both limited and mature markets. Bryan Fields: Let's talk about M&A. A lot of people have an idea of what they think it is, but being in it might be different. Can you give us a scenario — are you working with a company that says 'we're looking to partner with a cultivation brand' and then you go find it? Tony Schor: A lot of it comes from the brand side — I get brought in by leading brands with great presence and sales in a few markets that want to expand. I put the pieces together, finding them a manufacturing partner that makes sense not just operationally but culturally, because they have to get along. If you're a chocolate maker expanding into a new market, you don't necessarily want to partner with a group that only makes vapes and doesn't know chocolate. Groups come to me for a lot of different things, but from the brand side it's usually to find manufacturing partnerships — asset-light deals where they license their brand and SOPs without heavy equipment investment, sharing revenue instead. Kellen Finney: Have you ever been the catalyst for bringing two parties together — where they weren't looking for each other but it just clicked? Tony Schor: Every day — that's what I work toward. What's interesting about cannabis is it's a very slow industry when it comes to regulations and getting deals done — even getting parties together takes longer than in other industries. It's important to find the right parties. I've had success bringing leading brands into new markets, but a lot of it is education, because a brand used to succeeding in a mature market has to understand a limited market like Illinois or New Jersey might only have 200 open stores instead of 2,000. Customers there want new brands, so it's exciting. For example, I'm doing work with the Cheech & Chong brand — probably the truest name in cannabis entertainment legacy — and I brought them into Illinois, onto the shelves of the largest player in the state. That was an exciting accomplishment given the legacy behind that brand. Kellen Finney: I want to go back to the culture aspect, because that's so hard to quantify — it's almost a feel for the psyche and personalities of the people running these companies. For newer companies, do you spend a lot of time on that internal culture piece, or is it more high-level with executives? Tony Schor: I'm typically working at the high level — CEOs, owners. It starts from the top. If it's a non-operational deal, you don't get the luxury of talking to employees or feeling the vibe, so it comes down to due diligence and asking hard questions. I've always prided myself on not being afraid to ask them: if you're coming with money, show us proof of funds. If you've done this before, who did you do it with — can we talk to them? Managing expectations is key to any transaction, so understanding both sides starts with culture. Kellen Finney: Have there been times a partner said 'I want to get into Maryland manufacturing, I have my eye on this target,' and after research you realized it wasn't going to be a good fit? Tony Schor: Absolutely, many times — if you don't know a market, you can't presume you know the right players. That's why groups need to rely on consultants and brokers tapped into those markets. You need legal counsel in that market and to know the local rules — packaging changes from market to market. In Illinois, for instance, you can't have animals or pictures of fruit on gummy packaging. Understanding those nuances in each market makes a consultant more valuable to the operator entering it. Bryan Fields: The cannabis industry is quite diverse — is there a questionnaire you've developed over the last four years that's unique to cannabis when you're doing this matchmaking? Tony Schor: It's literally about holding people's feet to the fire — until you can put that check on the table, the transaction isn't happening. Early on I spent months vetting people, trying to understand who's real and who has the ability to get things done. There's no set checklist because every transaction and every group is different, but it's great to learn from other people's mistakes, so I ask new clients about problems others have hit. Cannabis is one of the most diverse industries out there, blending people from very different cultural, economic, and educational backgrounds — understanding legacy is important too. You can't discount somebody who doesn't have formal business education but has been one of the best growers for 30 years, from a family of growers. Bryan Fields (joking): I think Kellen's wondering what type of animal are you? Tony Schor: I'm a tiger. Kellen Finney: Does personal motivation play a role in the M&A experience? Some people might be motivated by desperation, making them more eager for partnerships even when the timing isn't right. Tony Schor: Timing and expectations really matter. Somebody may not be ready to sell even though they think they are — they'll say 'I've been open two months and I want to flip this dispensary.' They're used to hearing valuations based on pro forma projections, but once you're open and operational, everything becomes actual — actual sales, actual earnings, actual payroll. Being prepared means having accurate financials and making sure everyone on the cap table is aligned. Timing is also market-driven — I don't tell people to sell based on my personal opinion, but on what the market's willing to pay, because people's self-valuation is almost always higher than the actual market value. Kellen Finney: I can see a world where founders, ahead of a sale 6-12-18 months out, could get their house in order and start partnership conversations early so the process is smoother when the timing's right. Did I lay that out correctly? Tony Schor: 100%. I'll often tell groups who want to sell that I don't think they're ready — wait six or eight months, and if your revenue increases the way you expect, show it, because no one's going to pay for an expectation. Bryan Fields: That must be a really hard, honest conversation — founders are emotionally invested in their product. How often are people accepting versus pushing back? Tony Schor: It's often difficult. If they keep pushing, sometimes I'll put them on the phone with a potential buyer to hear the real interest level directly — that can be a rude awakening, which I try to avoid by not wasting people's time. I always try to be honest. Sometimes, rather than telling someone to sell, I ask why not merge your dispensary with several others and rebrand them all under your name, becoming part of something bigger instead of selling outright. Bryan Fields: Hypothetically, once your house is in order and you're ready for those transactions, is there an estimated timeframe from first conversations to closing? Tony Schor: There's no crystal ball. People need to be patient — things take time, and it's not always about you; due diligence takes real homework. It depends on whether it's an operational business or a paper license. Paper licenses move faster than operational businesses, where you have to review financials, building ownership or leases, and more. I'd like deals to take 30 to 90 days, but they rarely come close, because cannabis is heavily regulated — the new owner has to be approved by the state even if already licensed there, and license transfers alone can take six to twelve months. Bryan Fields: Can you give an example of a paper business versus an operational business? Tony Schor: A paper license is a conditional license awarded by a state — the legal right to open a dispensary, craft grow, cultivation, or manufacturing facility, without operations yet. In Illinois, for example, you can't transfer a paper license until the store is open and operational; only then can you file for the transfer. So the license holder has to wait for real payment until after the store opens and the transfer is approved, which can take twelve to eighteen months before they see real dollars. Kellen Finney: M&A is fascinating in cannabis specifically — outside the industry, market share is easy to value, but in cannabis you could be a single-state operator with unlimited licenses looking to acquire an asset in a limited-license market, making valuations all over the place. Is it hard to standardize fair market price? Tony Schor: Market conditions change every week in cannabis, not just every month. What's hot today might not be hot tomorrow from a transactional standpoint. I'm seeing more interest on the East Coast right now. Kellen Finney: Maybe a couple of states or companies you have in mind? Tony Schor: I pride myself on privacy — until a transaction is public, I don't like to mention specifics, for competitive reasons. But you've seen big moves: GTI recently purchased a major beverage company getting into hemp beverages, and Canopy Growth just announced the final closing of their acquisition of Acreage. A lot of what I work on is with independents or single-state operators looking to grow within their market or replicate their success elsewhere. One client is a Pennsylvania vertical operator with a cultivation license in New Jersey who's now looking to acquire dispensary licenses to go fully vertical there. Operations, SOPs, and branding often transfer easily, but regulations differ by state — on the East Coast you sometimes have to wait three years before you can transfer a license, so you're partnering with the seller through the finish line, unlike buying a house where the deal closes and you never see the seller again. Bryan Fields: Is there ever a time where non-public information affects deal urgency — like knowing company X is buying company Y and needing to move faster because resources are limited? Tony Schor: It's not rocket science to open dispensaries if you've done it before — the problem is people entering cannabis without experience who think their unrelated background translates directly. I always tell people to surround themselves with smart money and smart people, and be a good listener — the best CEOs are the best listeners. A lot of legacy pioneers who sold out big in the past are coming back, wanting to strike gold again, but capital constraints are tighter now. Access to money is the most important thing in cannabis, because public markets are limited — only a few U.S. companies can trade, mostly on Canadian exchanges. To date, $890 million has been raised in cannabis, and 98% of that has been debt — very little equity — so a lot of acquisitions come with debt attached, which is part of why deals take so long. Bryan Fields: There was a huge influx of capital back in 2017-2019 — is the type of capital being deployed today different, even though it's limited? Tony Schor: Back then there was a 'gold rush' excitement, almost like the tech boom, driven by expectations that more states would legalize recreational use and that federal legalization or the end of 280E would come. It hasn't happened yet, and those tax burdens are what's squeezing operators from growing. Once those tax burdens go away, capital will come in. Personally I don't need full interstate federal legalization, but I do want federal banking and the end of 280E, because that will free up money for M&A. Until then it's a turtle race — start raising money locally, in your own town and state, before going outside that network. Bryan Fields: Have you seen companies use creative ways to secure capital? Tony Schor: Creative capital usually comes through partnerships, which I believe are the only way this industry will keep thriving. If you're a successful brand wanting to enter a new market without spending a lot, find a partnership — maybe co-branding with another brand that wants to enter a market where you already have a manufacturing relationship, so you bring them into your market and they bring you into theirs. Since 98% of capital raised is debt, there's not much room for creativity — smart money means understanding it takes years to see real returns, not a gold rush. Bryan Fields: What do you think has been one of the most impactful mergers in the space, in terms of success? Tony Schor: Canopy Growth and Acreage is a great example. Canopy had serious debt problems in Canada, so they changed strategy — sold off their Canadian retail assets and redeployed that capital into markets with greater upside, giving them a stronger multi-brand presence in the U.S. through Acreage. That's a solid acquisition that should have a good long-term effect both in the U.S. and Canada. Kellen Finney: Going back to partnerships — on paper, a manufacturing tie-up between two markets sounds like a clean win-win, but it always feels like one party gives more. Is there a way to make both sides feel comfortable with an uneven split? Tony Schor: That's part of the shared risk each group takes on — success in California doesn't guarantee resonance in Nevada, Colorado, or Maryland. Shared risk is always better than one side bearing it all, and limiting that risk comes down to education — understanding the market, distribution channels, and who's handling sales. It's about being true to each other about what you can each provide — there's no way to make it perfectly fair, just as fair as possible. Bryan Fields: That makes me think of the conversations we've seen with some big players, where the word 'predatory' gets thrown around — that balance based on trust, with a period of grayness where you just have to take the risk after due diligence. Tony Schor: The hardest thing to understand is where you'll need to put out capital. If a brand comes into your existing facility, you may not need to put out much money — you're basically leasing them space, which lowers your risk. The risk is if the brand doesn't perform and can't pay the lease. You can have a great celebrity name and a lot of flash, like Cheech & Chong, but if the product isn't good, it won't sell. The product has to stand behind the brand, and it has to be replicated well from state to state, which is tricky because the underlying cannabis biomass differs by market. Bryan Fields: How much cross-industry activity have you seen — outside industries buying cannabis companies, or cannabis companies acquiring outside businesses? Tony Schor: Given the capital constraints we just discussed, if you ask me what's hot right now, it's technology. If you can't find ways to make more money with current operations, how will you grow? Manufacturers and operators are always looking for new technology to increase yield, which makes the business more attractive to a buyer. Cannabis-specific technology doesn't really exist yet, so it's borrowed from other industries — oil and gas, pharma — anywhere manufacturing or cultivation techniques can transfer over, if shown to be cost-effective. For example, I work with a med card company with around 50,000 patients nationally, and bigger med card companies want to acquire them for the patient base. As these technologies prove themselves, bigger players will acquire them as portfolio plays, which is exciting because improving yield could mean higher potency and more consistent products for consumers. Bryan Fields: As we close out the year, people often reflect on milestones — what would you say to an operator about that? Tony Schor: If you're still standing, you're successful — in this space it's very easy to run out of money, close up, or sell at a heavily discounted fire sale. I've personally avoided being involved in those fire sales; I like finding the 'diamonds in the rough' — independent, single-state operators who aren't big on anyone's radar — and bringing them real opportunities. Bryan Fields: One more M&A question — have regulated cannabis companies been looking to acquire hemp companies? Tony Schor: Yes — GTI's Ben Kovler recently joined the board of and helped acquire a hemp beverage company, and Cresco and others have realized their dispensary across the street from a smoke shop is sometimes doing better than they are. Some states are starting to regulate and squeeze the unregulated hemp Delta-8/Delta-9 market, which I think is a good thing, but big cannabis players are still paying attention to and buying into hemp. Personally, I like the regulated cannabis industry because it's safer for consumers, similar to how the FDA oversees food. Another example of cross-industry entry is a candy company that got into cannabis-infused edibles, succeeded, then got a craft grow license to produce their own biomass, started white-labeling other brands, and just came to me wanting to buy a dispensary — going fully vertical in under two years. You're also seeing alcohol companies pay attention to cannabis and form partnerships, partly because of lingering stigma that's fading as more people learn about the medicinal and recreational benefits. Bryan Fields: That personal passion led you to one of your biggest opportunities a year ago, becoming Chairman of the Cannabis Hall of Fame — can you tell that story? Tony Schor: Through relationships from past transactions, someone told me this group could use my help — the Cannabis Hall of Fame, founded by Vincent Norman, a wonderful former Marine and true legacy figure in cannabis, based in Chicago, with a great network spanning entertainment, legacy growers, and medical professionals. I was asked to chair his advisory board, and unfortunately he passed away a year ago; the directors then asked me to take over and turn his idea into reality. There are already 40 inductees who've received trophies and recorded acceptance videos, including Snoop Dogg, Wiz Khalifa, Willie Nelson, and Seth Rogen, alongside true medical pioneers — including recognition tied to the Charlotte's Web story, the patient whose case helped drive marijuana legalization forward. The Hall of Fame's mission is to provide exhibit space to recognize these legends and use it as an education tool to help destigmatize cannabis. I had to build this like a startup, assembling an advisory board of about five people, including the head of Florida operations for Planet 13 and a leading fractional cannabis marketer. We're planning to exhibit in a 13,000-square-foot, two-floor, fully immersive art exhibition space that Planet 13 built in Las Vegas, where cannabis brands can lease space to showcase their products to tourists — similar to the immersive Van Gogh-style exhibits popping up around the country, where people pay $20 to $80 to visit. Planet 13 already gets about 130,000 guests a month, and we hope to capture that audience starting next year. Bryan Fields: Planet 13 has a really cool, hidden consumption lounge that Kellen and I got to try — not easy to find, especially when you're stoned. Tony Schor: Right next door to that lounge is Cannabition, where our exhibit space will be. We wanted to be there because of the built-in foot traffic — 130,000 consumers a month, one of only a handful of consumption lounges in Nevada, right next to the Cannabition space, which is doing an incredible buildout and hopes to open soon. For now, we're finding the right sponsors to fund the exhibit space, since nothing in cannabis is free. We kicked off our sponsorship program at the Benzinga conference in Chicago with an after-party consumption event featuring about nine brands and representation from across the industry. Bryan Fields: I could talk to you for hours, but for those who want to get in touch, where can they find you? Tony Schor: Best place is email — tony.schor@gmail.com. You can also call me anytime at 847-971-0922 — just don't spam me. I like talking with and working with good people in cannabis, and you two have been nothing but gentlemen and fine representatives of the industry. For anyone who doesn't know what M&A means, it's mergers and acquisitions — whether you're merging something together or acquiring something to bring into your business, that's the space I'm in. I get sourced for all kinds of things, from personnel searches to new operators, so happy to help however I can. Bryan Fields: Appreciate that — we'll link everything in the show notes, and maybe remove that phone number if you want. Tony Schor: Now that I think about it, let's get that deleted. Bryan Fields: Thanks, Tony. All right guys, have a wonderful day.