That’s how Noam Hirschberger describes the burgeoning cannabis industry, which has triggered a critical need for financial and advisory services including valuation and tax planning that will play an important role in the ongoing success of firms in this industry. Hirschberger leads the cannabis practice niche set up last year at New York City-based PKF O’Connor Davies, and he spoke at a recent ASA NYC Chapter dinner that BVWire attended. We’ve been to several of these events, but this one really packed them in!

Rapid growth and change: Over 30 U.S. states have legalized cannabis for either medical or recreational usage (or both) and major developments are happening regularly, so it’s important for the practitioner to keep up with the industry and understand its nuances, Hirschberger notes. The cannabis market has hit $19 billion in the U.S., and one report predicts that global industry revenues will top $40 billion by 2024.

The industry has its share of troubles, such as the fact that cannabis is illegal at the federal level, access to banking services has been hampered, companies cannot deduct business expenses for federal tax purposes, just to name a few. Last summer, the industry got caught up in the “vaping crisis,” which, although it is an issue within the illicit market, as Hirschberger points out, it has had an impact on legal cultivators and distributors as well.

More coverage of Hirschberger’s remarks and insights will be in the March 2020 issue of Business Valuation Update. In the meantime, take a look at PKF’s white paper, “Cannabis: An Industry Growing in Every Sense.” There’s also a recent BVR briefing, “Cannabis and Hemp Valuations: A Market Analysis,” written by Ryan Cram and Ron Seigneur (Seigneur Gustafson LLC).