Hartford Business Journal

HARTFORDBUSINESS.COM | SEPTEMBER 2, 2024 19 FOCUS | LAW Beth Gianesello Judd, president of Konover Commercial Corp., has been elected to Middlesex Health's board of directors. Judd is a founding member of the Middlesex Health Women's Wellness Fund, and her daughter was born at Middlesex Hospital. At Konover Commercial, Judd oversees a portfolio of more than 4 million square feet of commercial real estate, acting as asset manager and owner representative for all owned and third-party parties. Secretary of the State Stephanie Thomas was recently elected secre- tary of the National Association of Secretaries of State (NASS) Executive Board, the nation's oldest nonpartisan profes- sional organization for public officials. Thomas has been Secretary of the State since January 2023. As an active NASS member, she serves on the elec- tions, cybersecurity and business services committees. Mostafa Analoui has been appointed director of the M&T Bank Center for Innovation and Entrepre- neurship at Quinnipiac University. As director, Analoui will focus on several key priorities, including expanding Quinnipiac's innovation ecosystem through external collab- orations with corpora- tions, small businesses and community organizations. He also will work to enhance hands-on workshops that promote multidisciplinary collaboration, develop programs designed to support faculty members in pursuing innovative ideas and aiding student entrepreneurs, and grow the network of mentors and executives to guide Quinnipiac innovators and entrepre- neurs from concept to product. Analoui, who holds the Carlton Highsmith Endowed Chair of Innova- tion and Entrepreneurship and serves as a teaching professor of entrepre- neurship and strategy, joined Quin- nipiac in September 2023, following an international search. Hartford nonprofit Our Piece of the Pie's President and CEO Hector Rivera has been named a co-chair of Hartford's Blue Ribbon Commission on Education. In addition, OPP's Director of Finance and Hartford City Councilman Amilcar Hernandez will serve as a commission member. Hartford Mayor Arunan Arulampalam recently launched the commission to iden- tify opportunities for improvement in Hart- ford Public Schools. The Talcott Mountain Science Center & Academy (TMSCA), a STEM education organization, has added two new members to its leadership team. James "Jay" C. White II has been appointed the inaugural director of science and innovation, and Kenneth J. Wright has been named the new dean of Talcott Mountain Academy. White earned his Ph.D. in astro- physics from Indiana University and has an extensive higher education background as a professor of physics for three institutions. He also served as provost and vice president for academic affairs at Gettysburg College and Wash- ington & Jefferson College. Wright received his Ph.D. in educational psychology from the University of Connecticut's Renzulli Center for Creativity, Gifted Educa- tion, and Talent Development. As dean, Wright will oversee the acad- emy's K-8 educational programs. Movers & Shakers young industry, with just a few active players, valuations between two parties don't always align. "I've been in situa- tions where I've had clients that couldn't come to terms on value, so the buyer has walked away," Glassman said. "Buyer and seller sometimes don't agree on value, and sometimes the buyer is just not willing to make that commitment." And the reality is, cannabis is a capital-intensive industry. Richards said some people who had plans to enter the market have become hesitant over the last several years with the increasing costs of doing business, and product saturation concerns nationally in more mature markets. There has also been a recent pullback in cannabis industry investment from large corporations, Glassman said. "You can't just go into this business now and expect that there's this trend toward appreciation of values of operations just because it's a new industry — it's now a maturing industry," Glassman said. "It's expen- sive to run a cannabis operation, and you have to turn a profit." Ross, the Nova Farms CEO, emphasized that cannabis is a hard business to navigate — his company ballooned from one employee to almost 500, and back down to about 400 in just a few years as economic headwinds and other industry reali- ties set in. "You're essentially building the fire truck on the way to the fire, and you've got to be able to pivot, you've got to be able to move as it's changing every day," Ross said. "Every day is like 10 days in another industry, so you've got to move quickly. It's a race." Due diligence Glassman said most elements of buying or selling a cannabis license or business align with a typical M&A deal for any other industry. It requires an analysis of profit margins, debt and equity struc- tures, and licensing paperwork needed to complete a deal. Having a deep understanding of a company's financial records, location, competition and regu- latory environment is key in preparing for an acquisition, added Richards, the Marcum CPA. Companies are typically valued based on multiples of revenue or EBITDA (earnings before interest, taxes, depreciation and amortiza- tion), Richards said, but there isn't a lot of public data in Connecticut to gauge how much licenses are going for on the secondary market. And valuations are even tougher at the pre-revenue stage, when businesses are just starting out, Richards said, leaving it up to financial projections and esti- mates based on the market. While M&A activity could heat up in the year ahead, it's been slow in the last few years. Cannabis industry M&A deals were down 59% in 2023 compared to 2022, according to data from cannabis investment firm Viridian Capital Advisors, with just 69 total deals occurring last year, compared to 109 the year prior, and 220 in 2021. So far in 2024, about 40 M&A transactions have closed with a total disclosed value of $313.44 million, Viridian reported. Beth Judd Stephanie Thomas Mostafa Analoui Hector Rivera Amilcar Hernandez Kenneth J. Wright James C. White ADULT-USE CANNABIS BUSINESS LICENSES IN CT FINAL LICENSE PROVISIONAL LICENSE ISSUED, LICENSE TYPE ISSUED BUT NOT FINAL LICENSE PRODUCERS 4 0 DIA CULTIVATOR 1 12 MICRO-CULTIVATOR 3 3 DISPENSARY FACILITY 2 0 HYBRID RETAILER 25 10 RETAILER 18 24 FOOD & BEVERAGE MANUFACTURER 3 7 PRODUCT MANUFACTURER 0 7 PRODUCT PACKAGER 0 7 DELIVERY SERVICE 5 8 TRANSPORTER 1 3 TESTING LABORATORY 1 1 TOTAL 63 82 Source: CT Dept. of Consumer Protection Andrew Glassman

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