The cannabis industry is growing rapidly, but are banks willing to lend money to marijuana businesses? If you are a cannabis business owner, it is important to understand this before you get started. In addition, you need to be aware of how the market is changing and how to make sure you stay competitive. You also need to keep in mind that the cannabis market has been hit by a pandemic, COVID-19.
Females are the largest demographic of cannabis consumers
For the first time, females have become the largest demographic of cannabis consumers. In fact, women are consuming more of it than men are. A recent survey by the Cannabis Consumers Coalition revealed that a majority of women report using cannabis at least once in their lifetime.
Women also tend to use more wellness-related products. For example, they spend more money on CBD and other wellness-related products than men do. However, many companies have yet to capitalize on the women who consume cannabis.
To measure the popularity of cannabis, the Canadian Tobacco, Alcohol, and Drug Survey (CTAS) asked respondents about the use of various substances. For example, the study found that people with lower education reported a higher percentage of use than those with higher education.
In terms of the best-known cannabis product, the sex-tested “flower” topped the list. Males, on the other hand, overwhelmingly dominated the concentrates market.
Another survey from Weedmaps, a Canadian firm specializing in cannabis, found that consumers reported increased consumption of cannabis in response to the pandemic. The most notable statistic from the survey was that women were older than men when they first tried it. It took an average of 18.6 years for a female to try it, while a male had to wait 19.2 years.
In terms of frequency, the most common use was less than a day a month. On a typical use day, people used between 0.6 and 1.4 grams of cannabis. They also consumed an average of 1.3 servings of edibles.
Legalization efforts of states without adult-use programs
There are several legalization efforts in the works in states that have not yet created adult-use programs. As the nation’s cannabis policy shifts from prohibition to legalization, some state governments are rethinking their marijuana policies.
For example, Oklahomans for Responsible Cannabis Action are working to have a marijuana use initiative placed on the November ballot. The group must gather at least 178,000 signatures by August 24. If the measure is approved, lawmakers will be able to create a statewide licensing program for marijuana by July 1, 2023.
The Drug Policy Alliance believes that marijuana should be removed from the criminal legal system. In New York, the DPA launched an initiative aimed at reducing marijuana arrests.
Across the United States, the War on Drugs has harmed millions of lives. As a result, Americans want to see the government regulate the drug for adult use. Nearly half of all Americans have used marijuana at some point in their life, and more than 60 percent of the population supports legalizing it.
In some states, such as Maryland and South Dakota, voters passed recreational and medical cannabis initiatives. But in other states, such as North Dakota and Arkansas, voters rejected them.
Activists in these states are now working to expand the failed measures and get them back on the ballot. While they are unlikely to make it into the election, voters in these states will have a chance to consider whether they support cannabis for adult use.
COVID-19 pandemic has harmed the cannabis supply chain
The Coronavirus (COVID-19) pandemic has harmed the cannabis supply chain in a variety of ways. It’s been a real challenge to get products out of the country and into the hands of consumers.
During the outbreak, a lot of cannabis businesses took measures to keep customers and employees safe. This includes the use of stay-at-home orders.
As the marijuana industry continues to evolve, it will continue to need a supply chain that can handle the growing demand. Currently, there are not enough facilities in the U.S. to produce the packaging for cannabis products.
With fewer companies producing cannabis, prices may rise. Companies that handle logistics in-house will feel the effects the strongest.
A lack of human capital could also affect the supply of flower. In fact, ninety-four percent of Fortune 1000 companies are experiencing some kind of supply chain shock.
There are many factors to consider when examining the cannabis industry’s supply chain, including its diversity and international nature. To truly understand how it works, it’s important to look at the overall picture.
Although the industry is growing, the flurry of new products and strains means that the market is shifting. Legalization has also had a positive impact on the cannabis industry, as consumer demand has increased.
The industry has also experienced some supply shortages over the last two years. In fact, some dispensaries in Las Vegas have seen a decline in sales.
CBD has hit mainstream since becoming federally legal in 2018
It’s been a year since cannabis became federally legal. The number of Americans living in states with legal recreational marijuana rose to 44 percent. In addition, more than half of the nation’s top retailers are preparing to sell CBD.
However, the FDA is still wary of allowing CBD to be sold in unapproved products. For example, the FDA prohibits sales of CBD if the product contains an unknown amount of THC.
Fortunately, there’s an alternative to FDA regulation. A group of Canadian health regulators are working on a three-year review of CBD. They’re expected to issue a recommendation this summer.
This will enable companies to market CBD as a dietary supplement. That’s a good first step, but it could take years to see CBD products hit the shelves.
There are also a few obstacles to selling CBD interstate. While the drug is legal, it’s still a Schedule I substance. As such, the U.S. has strict laws against its possession, cultivation and export. And many states are enforcing strict restrictions on its use.
Some national corporations are looking to get into the CBD market, too. Ben & Jerry’s, Coca-Cola, CVS and Kroger all have plans for CBD-infused products. Eventually, they may even acquire some of the companies that lead the CBD market.
One of the biggest hurdles in this process is educating consumers about cannabinoids. Currently, there’s little research on safe dosages, drug interactions and long-term effects. But as CBD becomes more mainstream, education will be the key to increasing consumer safety.
Ancillary businesses offer a lower barrier to entry
There is a lot of buzz around ancillary or non-cannabis related companies. They have the opportunity to capitalize on the burgeoning legalization of marijuana to varying degrees. Among their ranks are lighting companies, human resources, manufacturers, CPG canna-beverages, and others. Ancillary jobs can make up over a quarter of the industry’s total workforce.
The ancillary industry was not without its own pitfalls. For instance, ancillary cannabis businesses may be illegal in some jurisdictions, including Pennsylvania. However, they offer a less constrained pathway into the industry. As such, they have the opportunity to glean some of the best practices from other players. And the rewards may be in spades.
While the industry has its challenges, it has also displayed an impressive growth. A recent report from Leafly demonstrates that there are now over 321,000 full-time equivalent jobs in the industry. But, if you want to build a viable business, you need to consider many variables before you delve into your wallet. In fact, the number of jobs may grow as the legalization of recreational cannabis continues to unfold.
To the untrained eye, the ancillary industry is an unlikely place to find success. Nevertheless, with the right guidance, ancillary companies can turn heads. With a little research, you’ll be on your way to a thriving cannabis company in no time. From building a brand to acquiring social media handles, these companies can help your cannabis business thrive.
Banks hesitant to work with cannabis businesses
Despite the fact that marijuana is legal in 36 states, banks are hesitant to work with cannabis businesses. Although there are some small financial institutions that are willing to cater to the industry, the majority of national and federally insured banks are still on the fence.
This lack of banking options is putting the safety of customers and employees at risk. In addition, the risks associated with working with a marijuana company are more complex than for other industries. It can be difficult to secure financing, purchase inventory, and pay workers.
There is also the question of how to protect cannabis business revenues from legal penalties. Banks need to be able to follow cannabis regulations and make sure they are compliant with the law. They may need to hire additional staff to handle regulatory requirements. The additional costs can be significant.
One way that cannabis companies can reduce these costs is to use alternative banking services. These services can eliminate the need for a bank account and allow businesses to conduct payments via the internet. Some financial institutions have developed internal guidelines that they will follow when working with cannabis businesses.
There are also some community financial institutions that are more likely to work with cannabis businesses. Several state-chartered banks have been tentatively exploring the industry, and even a handful of credit unions have gotten into the game.