Cannabis industry challenges In 2023
These are some of the challenges that the Cannabis industry must overcome in 2023.
The cannabis industry has experienced exponential growth in recent years thanks to legalization in several countries and states, and is expected to continue to grow in the coming years.
However, the success of the cannabis industry has also given rise to a number of challenges that must be faced in 2023. From fierce competition to a lack of supplies and the need to educate consumers, the cannabis industry will have to face and overcome these challenges to maintain its success and growth.
The cannabis industry is set to expand into new sectors and its market value is expected to increase exponentially. But, as a budding industry, it has many challenges ahead for its survival.
Here are some challenges we can expect to see in 2023:
New Laws On the Way
We anticipate that 2023 will see the reintroduction of several federal legalization bills, such as
The Cannabis Administration and Opportunity Act (CAOA) in the Senate.
The Marijuana Opportunity and Reinvestment Act (MORE) in the House of Representatives
The Safe and Fair Enforcement for Banking Act (SAFE)
The State Reform Act (SRA).
These bills are intrinsically related to cannabis: some seek to end federal cannabis prohibition, others to protect financial institutions and other professional service firms doing business with state-legal cannabis companies, and others to decriminalize cannabis at the federal level.
This will pose a challenge for the sector this year, as the approval or not of these and other bills will depend on how the various cannabis-related activities are carried out.
Limited Banking Services
Banking is and will continue to be a major challenge for the cannabis market in 2023.
Despite medical and recreational cannabis being legal in many U.S. states, banks continue to be reluctant to offer their services to cannabis-related businesses. The main reason for this skepticism is the fear of losing their FDIC status or being accused of money laundering.
This obstacle has serious consequences for cannabis dispensaries, as they are forced to keep large sums of cash on their premises, making them potential targets for robbery and extortion.
In addition, not being able to use standard banking services hampers the financial management of these businesses and increases their vulnerability to criminal activity, not to mention making it more difficult for them to access credit and loans that could help dispensaries and small and medium-sized businesses get ahead.
For this reason, many in the cannabis industry have lobbied the government to pass the SAFE Banking Act, which would ensure access to financial services for legal cannabis businesses and reduce the risk of criminal activity.
While this is a sound solution, it is unknown when or if Congress will pass this legislative proposal in the near future.
Insuring Cannabis Businesses
The cannabis world faces another major challenge: ensuring its businesses. The discrepancy between federal and state laws on the consumption and sale of marijuana complicates the situation for insurers, which could expose themselves to criminal charges if they offer coverage to cannabis businesses in some cases.
This legal uncertainty regarding marijuana also causes some insurers to charge high premiums to cover cannabis businesses, which in turn leads some cannabis business owners not to insure their assets.
Lack of insurance in the cannabis industry can expose owners to personal liability and leave their assets unprotected, which can have serious consequences for the business.
Despite the difficulties in obtaining insurance in the cannabis industry, some experts see this as an opportunity for insurers to enter this emerging market and offer solutions tailored to the needs of cannabis business owners.
The Ever Present Stigma
Cannabis stigma has been a major obstacle for the cannabis industry and looks set to remain so this year.
The bad reputation associated with cannabis may deter investors and companies in the industry from engaging with it or restrict industry-focused campaigns to some extent.
Despite advances in cannabis legalization, stigma is still present in many parts of the world. This may be due to a lack of education and accurate information about the effects of cannabis, which has led to a lot of myths and misunderstandings.
It is, therefore, important that the cannabis industry continues to work hard to change this negative perception and to banish the negative stereotypes associated with cannabis.
Dispensaries and businesses must continue to create a professional and respectable environment for cannabis users, which can help reduce stigma and discrimination.
A Constantly Changing Landscape
The cannabis landscape is dynamic and constantly evolving. As the legal cannabis market continues to expand, new challenges and opportunities present themselves for businesses.
In the United States, laws vary significantly from state to state, making it difficult to create a uniform legal framework for cannabis nationwide. In addition, other countries also have different laws and regulations affecting the production and sale of cannabis, and this will be a challenging year after year.
Big Companies Get In The Game
More established and experienced companies, such as those in the alcohol, tobacco, and pharmaceutical industries, have begun to invest in the cannabis market. These companies have been acquiring smaller companies and developing new cannabis-infused product lines, including cannabis beverages as an alternative to alcohol.
This trend could have a major impact on the cannabis industry, as these corporate giants bring their expertise in mass marketing and distribution of products, which could accelerate the adoption of cannabis into mainstream society.
On the other hand, there could also be concerns about product quality and standardization, as well as the impact of the entry of these large companies into the cannabis market on small local businesses and growers
Shortage Of Supplies
Supply shortages are one of the most critical challenges facing the cannabis industry today.
Cannabis production is highly dependent on the quality of seeds, fertilizers, and cultivation equipment. Lack of access to reliable, quality supplies can have a significant impact on production and the quality of the final product, which can negatively affect the profitability of businesses.
To address this problem, companies in the industry are looking for ways to ensure a consistent and reliable source of supplies. This may involve investing in growing equipment and finding reliable seed and fertilizer suppliers. Companies may also consider entering into long-term agreements with supply providers to ensure constant access to these items.
Another approach is to explore alternatives and innovative technologies that can help reduce dependence on traditional supplies. For example, tissue culture technology and feminized seed production can help reduce the need for traditional seeds and improve crop efficiency.