The cannabis space is one of the most exciting industries at the moment. At least 30 states have legalized cannabis, with several more considering legalizing it in the near future. Valued at $13.6 billion in 2019, the industry is projected to reach. $73.6 billion by 2027. These crazy numbers have attracted entrepreneurs and investors looking to cash in on cannabis’ popularity in droves. The fact that most states that allow cannabis declared it essential at the start of the pandemic made the industry even more attractive to entrepreneurs.
Like every other industry, cannabis has its own set of risks, especially for an entrepreneur who doesn’t know the ins and outs of the cannabis space. While there is plenty of demand for cannabis products, the fact that it is still federally prohibited poses quite a challenge. Here are a few of the issues you will have to contend with if you decide to start a cannabis business:
Regulatory nightmare. One of the biggest challenges you will have navigating the cannabis industry is the wide-ranging regulations. The federal government prohibits cannabis and the states that allow it all regulate their programs differently. In California, for instance, there are three different cannabis regulatory agencies, each with their own regulations on how to handle cannabis waste. Additionally, most states with cannabis programs allow cities and municipalities to enact their own cannabis policies.
The legal cannabis landscape is also constantly shifting, and with laws and regulations constantly changing, you will have to keep an eye on them to make sure your business is always in compliance.
Banking issues. Another issue you will have to deal with is lack of access to banking services. Fearing retaliation from the federal government, financial institutions have avoided working with cannabis businesses, and you may have a hard time securing loans as well as setting up cashless payment services. The Secure and Fair Enforcement (“SAFE”) Banking Act, which would grant cannabis businesses access to banking services, was passed by the House in a historic vote but it is stuck in limbo in the Senate Banking Committee.
Stiff competition. State legal cannabis is one of the hottest industries right now, and its allure will increase exponentially when the federal government legalizes it. The sector is flush with firms looking to make a killing on the cannabis craze. You’ll be up against players who have been in the game for years and have amassed tons of experience and funding, and you will have to find a way to stand out from the pack.
These issues notwithstanding, savvy entrepreneurs can still earn big from this sector, as the success stories of companies like Sugarmade, Inc. (OTCQB: SGMD) clearly illustrate.
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CNW420 spotlights the latest developments in the rapidly evolving cannabis industry through the release of two informative articles each business day. Our concise, informative content serves as a gateway for investors interested in the legalized cannabis sector and provides updates on how regulatory developments may impact financial markets. Articles are released each business day at 4:20 a.m. and 4:20 p.m. Eastern – our tribute to the time synonymous with cannabis culture. If marijuana and the burgeoning industry surrounding it are on your radar, CNW420 is for you! Check back daily to stay up-to-date on the latest milestones in the fast -changing world of cannabis.
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