One of the clear takeaways from the financial track of this year’s MJBizCon is that there’s a lot of opportunity in the legal cannabis industry. The last few years have seen new states open to recreational legalization, like Montana, New Jersey, and South Dakota. And states like Arizona and Mississippi are legalizing.
Startups are seeing more funding this year than they have in years. The U.S. cannabis industry is worth $61 billion and is projected to be worth $80 billion by 2030. That’s a huge market.
However, that doesn’t mean that the industry isn’t without complications.
- The industry continues to face many legal challenges, especially with cannabis classified as Schedule I substance under the Controlled Substance Act. This is the harshest classification of a drug, putting it right up there with heroin and cocaine.
- This legal limbo created by the DEA and FDA means that the market will continue to shift and evolve as this changes.
- Though there are some great banking solutions for plant-touching business, it will continue to be a challenge to work with banks. Many traditional banking options, especially the use of credit cards and certain loans, will continue to be a problem for providers.
- As more established players enter the field, it will be more difficult for businesses that do not have a strong foothold to retain their place among the competition.
- And let’s face it, there’s still a big stigma around cannabis. We haven’t even overcome the stigma of alcohol since the Prohibition. In many states there are still Blue Laws that do not allow the sale of beer, wine, and liquor on Sundays.
Many of these challenges present an opportunity for the technology world to step in to help.
- Better tracking from seed to sell helps bring a level of transparency to the market. MJ Freeway, Elevated Signals, Silver Leaf, and Flourish are just a few of the big players covering everything from cultivation to retail. Many cover the whole vertical.
- To address these shifting markets and the regular legal changes, ProCanna, Viridian Sciences, and Cannavigia offer solutions to help monitor this ever-changing landscape. Many of these solutions are modular and include integration options with other software. Making this an important part of your overall supply chain flow.
- Hypur brings compliance and banking together into an integrated solution that includes bank accounts.
- The best defense against the larger players coming into the market and gobbling everything up at the moment seems to be interesting investment entities like SPACs. And across the cannabis industry, there are regular mergers and acquisitions – even among publicly traded companies. However, there’s still room for things like service co-ops and cannabis related professional service organizations to start making a greater presence in the market.
- One of the ways that technology can help diffuse the stigma of cannabis is to introduce new ways to consume other than smoking. Smoking is never going away, but options such as low dosage edibles, vapors, and even sprays are available for those who wish to be more discrete in their consumption.
These challenges create new opportunities for entrepreneurs and investors to work together to form new solutions that will make the cannabis industry better in the long run. Right now we’re all still at the beginning of a very young industry, so there’s lots of opportunity to find new ways to both meet consumer demands and legal requirements.