By Dan Garms
The cannabis industry has exploded over the past 10 years. Cannabis has gone from being a mere speck on the map in 2011 to becoming a massive $17.5 billion sales power in 2021. However, this growth presents some thorny issues.
The rapidly changing markets are creating a lot of confusion among growers, producers, distributors, sellers and consumers. The marketplace as a whole is only now starting to settle from a series of challenges most of its players have never faced before. This article offers a way to cut through the confusion in the cannabis space.
The Cannabis Industry Today
Even with billions of dollars in sales, federal law still puts the brakes on industry growth. Although legislation permits cannabis usage in 36 states, businesses still have to face the frustration of its classification as a Schedule 1 drug. In other words, it remains technically unapproved for use.
Despite this official restriction, in 2014, President Obama directed the Department of Justice not to interfere with state laws permitting the sale, cultivation or possession of cannabis. Unfortunately, the Trump administration returned to the former path of enforcing federal statutes.
With a turnover in control of both Congress and the White House, your cannabis prospects brightened once again. President Biden stated his support for both the decriminalization and legalization of medical cannabis.
In the House of Representatives, Judiciary Committee Chair Jerry Nadler reintroduced the MORE Act, legislation aimed to legalize cannabis. Senate Majority Leader Chuck Schumer also gave his support to cannabis reform. While the justification for the act is based on increasing social justice, passing it will also greatly benefit the cannabis industry.
However, until the MORE Act is voted in, state laws governing cannabis form a crazy quilt. Regulations range from total prohibition to allowing both medical and recreational legal use. In many states, laws are actively in dispute. Navigating this obstacle course presents you with many complications as you try to market to this industry.
Another piece of legislation crucial to the cannabis sector is the Secure and Fair Enforcement Banking Act (SAFE). Like the MORE Act, it has been around Congress for years and may gain new life under the current administration.
Current banking regulations create barriers to normal ways of doing business. They restrict how the industry can finance operations and limit sellers to cash-only transactions. SAFE would provide more access to banking services.
While changes in federal regulations are in limbo, confusion reigns.
From US statistics gathered in 2020, cannabis sales increased 67%. Across the nation, legalization support was at 68%, an all-time high. Communities hardest hit by the drug war crave relief. Other findings to consider include:
- 12% of Americans use cannabis.
- The industry was worth $61 billion in 2021.
- Senior-level salaries increased.
Unfortunately, in the pandemic economy, capital raises also declined 67%. This drop can give advantages to large companies with established sources of capital.
Mature markets like California and Colorado continue to see sales increases. States like Illinois, which expanded their medical markets, present considerable growth opportunities as well. New state laws provide more freedom to create more products. Edibles, THC, CBD, vaping and other options pave the way to innovation. Whether with gummies, oils or pain-relieving compression wraps, the growth possibilities appear endless.
Succeeding with Prospects in the Cannabis Industry Today
If you’re looking for leads in the cannabis industry today, you have every reason for optimism. Cannabis stocks have become a safe harbor. Recently, cannabis stocks saw double-digit gains. Since mid-March, a rise in demand led to positive trading. The upward trend continues to this day.
Companies attempting to develop supply chain connections or market to industry participants need to both learn and master the rules that keep them out of trouble and more easily identify target prospects. There are both broad and specific regulations and laws that may or may not apply to your business or business activities.
For identifying prospective vendors, partners and buyers, you’ll need a database source, like MNI. That’ll ensure you stay current with the cannabis sector’s ever-changing requirements.
Before you move forward with your program, understand the nuances associated with this specific niche:
- Building a strong company culture. That will include locating sources to service human resources, payroll and staffing. If they provide training and education, you will build a stable core you can depend on and promote from within.
- Making quality number one. When you consider a new prospect, make sure that their offerings won’t disappoint. By learning market trends, they can take action on solid data. You don’t want them to chase an idea if they can’t successfully follow through. In a fast-moving market, one crash and burn can turn off their customers.
- Developing realistic timelines. Lots of companies in the space are relatively new and need time and nurturing. If they need a reliable outside consultant to analyze your business situation, they should hire one. In an arena where trust is already shaky, a company must deliver on its promises. Access to the right expertise will help it come through.
- Finding a source of reliable information. Your marketing is only as good as your data. The right tools can cut through a lot of busy work and help structure your sales process.
The bottom line is that there are significant rewards to market entrants in this industry. But those rewards are not without risk. Understanding and adapting to the evolving legal and regulatory framework can mean the difference between success and failure. Having a comprehensive industry database available to you and your team can help cut the complexity of reaching the right partners, vendors and prospects
MNI’s North American Cannabis Industry Business Database can provide you with the timely information you need to easily find prospects in the cannabis industry today and speed your entry into exciting new opportunities. To try out a free demo of the database, click here.