17 September 2021
By Roger Jones
roger@TheCork.ie
There has been a recent trend of marijuana legalisation which has affected many industries without any exceptions. Marijuana is being legalized in more states which have resulted in different sectors not knowing how to react. One major sector affected by this legislation is the banking industry and banks are now trying to navigate these uncharted waters by trying to establish ways for their customers and businesses to make deposits safely without risking their safety or breaking the law. This article will focus on a few of these challenges that are affecting the cannabis industry in 2021 as well as what can be expected from the industry as they come into fruition each year.
The cannabis products
Thanks to legalization there has been massive innovation in the cannabis industry which has resulted in many cannabis products and devices becoming available to users. A few examples of cannabis products and devices include bongs, vaporizers, tinctures, topicals, and dab rigs to name a few. There is a vast offer of these products on the market, and manufacturers like Molino Glass offer even coated bongs which you can look at here. These consumption products are extremely popular among cannabis users and it makes it hard for new companies to come up with something unique and attractive. The stigma attached to marijuana consumption is something that is still very prevalent though because for the longest time this substance was illegal and criminalized which led to a reputation being given to marijuana and its consumers who were labelled as drug addicts. Now that society is embracing cannabis and it is becoming legal for recreational and medical use, there is massive competition in tech and innovation. Soon, it will be a huge challenge for new game-changing products to be created.
Unpredictable collaborations
Cannabis was still widely used when it was illegal but now that that legalization is happening, the cannabis industry is growing rapidly and is contributing a ton of money to the economy. On the 14th of July 2021 alone, the cannabis industry generated a whopping $400 million in just a single day which demonstrates just how lucrative and popular this industry is. Many other industries see the success of this industry and true to capitalist nature, they want a piece of the pie. Industries such as the alcohol and tobacco industry can benefit a lot from being associated with the cannabis industry especially because many stoners who consume via inhalation methods, will mix their dry cannabis with dry tobacco and the rise of CBD has seen the innovation of CBD beer and CBD wine being introduced to consumers. As much as the cannabis industry is a good investment for these other industries, there is a lot of uncertainty surrounding the cannabis industry however there is hope that we will see more deliberate collaborations in the future.
Banking opportunities
Possibly the biggest obstacle for businesses that exist within the cannabis industry has to do with issues brought to the industry by federal regulators and the media. One major issue that might influence cannabis businesses in 2021 is being able to find the right banking opportunities that are legal. The problem faced is that businesses in the cannabis industry cannot work with banks that are federally insured which creates this barrier to smaller operations. This all results in private funding within the cannabis industry continuing to dominate because banks are simply refusing to grant loans to cannabis companies because they fear prosecution. Private lenders are very risky to rely on and this also creates severe economic stability. Budding business owners within the cannabis industry have a lot to look forward to but this is a massive challenge that they have to face.
Although these are real challenges that are faced by the cannabis industry, there is a glimmer of hope for the future and many people are predicting change. One of the biggest indicators of this change is the fact that society is starting to embrace cannabis and countries all across the world are legalizing this substance for medical and recreational use. The more that the negative stigma gets extinguished in society and the more support cannabis gets from the government as well as the medical industry, the more the industry will grow and these challenges will slowly start to be overcome.
