Succeeding as a small business in the legal weed market is challenging. From government regulations to technological advancements, small businesses find themselves facing more competition and growing expenses.
Here’s a look at some of the hurdles facing cannabis entrepreneurs in a growing but fiercely competitive weed market.
Weed has been popular a lot longer than it has been legal. The shift from black market to a regulated legal market only started a few years ago. Adult use weed is only legal in 10 states and medical cannabis is still illegal in 17. Each state writes its own laws independent of every other state. Cannabis containing THC is federally illegal but the feds aren't enforcing against state-legal businesses, but strictly speaking they could decide to start. Hemp with just a trace of THC was made federally legal last December but is subject to regulations that the Department of Agriculture hasn't written yet. The biggest cannabis derived product on the market right now is CBD, which is legal but subject to regulations the FDA has said might take years to write.
In other words, the legalization process is far from complete and the market is turbulent, which takes a toll when you’re trying to survive as a small business. Small growers and retailers are the most affected by market instability.