Main Challenges Affecting the Cannabis Industry in 2021

The cannabis industry is growing rapidly and the annual market value of the industry is expected to hit $30 billion by 2025. With many states and countries legalizing the use of recreational or medicinal marijuana, things are expected to get better for the industry. However, there are many challenges affecting the industry. If the challenges are addressed, the cannabis industry will continue to grow and employ more people. Read on to learn the challenges affecting the industry in 2021.

The Ever-Changing Regulations

Use of medical cannabis is legal in 36 states in the U.S.A. Many countries in the world have allowed the use to medical cannabis too. Also, there are many regulations governing the use of recreation marijuana. Regulations governing the use of medical or recreational marijuana are ever-changing. As a result, many investors take it slow because they never know about tomorrow. As an investor, you may not be able to expand your business if neighboring states or countries haven’t legalized the use of cannabis products. What’s more, most of the regulations remain a hurdle as It’s hard for cannabis industry players to comply with the ever-changing regulations.

Banking and Capital

Most banks are not offering services and supporting the cannabis industry. And if they do, they charge the cannabis dispensaries high fees which are not applied to other businesses. As a result, most business operate in cash. This is not only risky, but also can lead to mismanagement of funds. In addition, cannabis businesses find it hard to get financial support from banks in most states. And without enough capital it’s a bit hard to run and expand your cannabis dispensary or business.

Oversupply and Counterfeit Products

In most states, there are no regulations to govern the supply of cannabis products to the market. As a result, you can find that there is oversupply of marijuana and that will affect the prices and even lead to losses. In addition, there are many counterfeit cannabis products on the market. As such, genuine farmers and manufacturers of marijuana products end up getting losses. With many products being sold online, it’s a bit hard for buyers to differentiate genuine with fake products.

Stiff Competition for Small Businesses

Large cannabis businesses in the industry are using huge money to cripple upcoming small businesses. Also, there are many small businesses coming up offering different cannabis products. As a result, there is fierce competition that leads to the closure of some businesses that can’t withstand the competition. Yes, competition is essential in business, but large companies using their financial muscles to bring down small businesses isn’t fair at all. As a result, small businesses have to be more creative and use more resources to withstand the competition.

Stigma

Cannabis has been illegal for so long and many people find it hard to accept its use in the society. Therefore, those who use cannabis products face stigma and that limits many people to use them even for medical purposes. It will take time to overcome the stigma as society is slowly accepting the use cannabis, especially the medical cannabis.

Final Words

Although cannabis industry has been growing fast, there are many challenges affecting it. The main challenge remains the regulations governing the farming, selling, and use marijuana products. However, there is light at the end of the tunnel as the society is slowly accepting the use cannabis, especially for medical purposes. Also, in the near future many banks are likely to support cannabis businesses to grow and expand.

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Created on Apr 8th 2021 00:28. Viewed 340 times.

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