A warm welcome to our guest blogger! Kathrin Garner is an enthusiastic journalist and writes article on social issues. As an activist, she takes part in NCSM program, which is a discussion platform on relevant cannabis topics, such as “The Best Way to get Weed out of your System”. She searches for and writes about current issues for a wide range of readers.
The cannabis industry in the United States has expanded in both scope and size as more and more states legalize recreational and medicinal cannabis. Each year, the size of the industry increases steadily, thus showing the potential of the product for healthcare. For example, the industry brought almost $7 billion last year, which represented a 30 percent growth over 2015.
According to analytics, the cannabis industry will explode to about $22 billion in the next five years. This claim is certainly reasonable given that some states are pulling in incredible amounts of money in taxes from recreational cannabis sales. For example, Nevada sales recently reached $33 million, which resulted in $5 million in taxes. This windfall will create a wide range of legal business opportunities, and even though cannabis remains illegal on the federal level, there is a good chance the industry will be allowed to grow unabated. So if you’re an entrepreneur dreaming of discovering an untapped market, you should definitely consider investing in legal cannabis sales.
Are Businesses Allowed to Sell Cannabis?
The states that have legalized the use of medicinal and recreational cannabis strictly regulate the business. For example, a person wanting to enter the industry must obtain a number of permits to be able to grow and sell the plant, such as a $200,000 cannabis processor permit and $30,000 dispensary location permit.
Following the cannabis permit application deadline, the state reviews them and the “winners” are awarded the right to grow and sell marijuana legally.
One major concern with legalization is
the identification of intoxicated drivers
Read: “How Long Should I Wait to Drive?”
Challenges Faced by the Cannabis Industry
As was already mentioned, there are no cannabis divisions in banks. That’s because many of them don’t want to do business with cannabis startups and shops. Even if it is completely legal, most banks will not give a loan to start a “weed shop.” The same is true for credit card companies. The main reason for this is a lack of legality on the federal level. Simply said, they fear that the federal government will take their investments away.
Types of Legal Cannabis Businesses
Let’s consider how cannabis business works using Pennsylvania as an example. The authorities there have recently allowed 39 companies from all around the country to obtain permits to grow and sell medicinal cannabis. Twelve of these were permitted to plant cannabis seeds, in order to grow and process the plants, to create ready-for-use healthcare products, while the rest sell the products at dispensaries.
Despite Difficulties, Cannabis Industry Continues to Expand
Serious cannabis projects like large grow facilities are few and far between. At this point, it is extremely difficult to obtain sufficient financing to enter a business that is still illegal on the federal level. The industry is still in its infancy, and there are no big corporations or subsidies, nor a cannabis division at Bank of America.
However, the predictions on the growth of the industry are mostly positive. “Right now, we’re about two years away from being too late to get in early,” David Feldman, a partner at law firm DuaneMorris, said. According to him, it is a great time to enter the cannabis industry.
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