The changes happening across the country when it comes to marijuana, hemp, and CBD laws are creating a new industry. Cannabis products are a hot industry that is taking off.
However, many may wonder if this is a case where the industry starts hot but burns out fast. Is there a future in cannabis, or is this just a trend?
Cannabis products were illegal until the tide turned and states started to individually change their laws, making marijuana legal. Only a handful of states have fully legalized cannabis in all forms. The majority of states have at least legalized medical marijuana in some form. Only a small number of states side with the federal government, keeping most cannabis products illegal.
The federal government made all cannabis products illegal in 1970. However, it did legalize hemp in 2018 with limitations that hemp products must contain no more than 0.3% THC, which is the compound in cannabis plants that causes psychoactive effects in people using the product.
Despite the differences between state and federal laws, the cannabis industry continues to expand. Federal agencies once in charge of cracking down on the use of cannabis products are now under orders to allow states to operate as they wish under their own laws.
This support from the feds allows the industry to thrive in states where the laws are friendly. Within the industry, there are four segments:
- CBD oil
Because of federal law, CBD oil and hemp are legal in all states. However, the recreational and medical use of marijuana varies by state. Some states, such as Colorado, have legalized both, while other states, such as Ohio, have only legalized the medical use of the drug. The differences in laws restrict the industry’s growth in some areas while it flourishes in others.
The industry does have a lot of promise as states keep legalizing the drug in its various forms. Experts expect that to continue. The hope is eventually the federal government legalizes all forms of cannabis Regardless, the industry is already experiencing extreme growth, creating jobs, and becoming one of the top ways to make money.
High Expectations for Cannabis
Forbes reports that the projections for medical marijuana sales is $13.1 billion by 2025. Recreational marijuana has a projection of $16.6 billion in that same time. Overall, experts feel that by 2025, cannabis could be a $30 billion industry, and that is a conservative estimation.
Plus, it is an estimation based on the current legal status of cannabis. If more states move to legalize more forms of the drug, then those estimations could grow substantially.
Roadblocks and Challenges To Overcome
Despite the great outlook for the industry, there are many hurdles that could hold it back or at least slow it down.
One of the biggest issues is federal restrictions. Marijuana is still illegal in the country, and despite the recent legalization of hemp, legislatures do not seem to be in a hurry to legalize all cannabis products. Polls show that while the majority of people do support complete legalization, there needs to be more information about the benefits of cannabis to help shift social and political views enough to reach full legalization at all levels.
Big Business Takeovers
There is also some concern that big business will take over the industry and push out those pioneers who have worked so hard to build it from the ground up. The good news is that consumers seem to seek out local providers for these products. Some states are also limiting farm sizes to help prevent the big company mentality.
Forbes explains that heavy regulation of the industry is already a concern. Cannabis is a very hot market right now with a major rush of companies wanting to be a part of it. The quick growth has the government struggling to put regulations in place to keep people safe when using these products.
CBD is the latest to become popular, but there is little regulation. The concern about the quality and safety of products on the market is serious, which pushes those in charge to want to issue more regulations. Agencies will likely start to issue guidelines for manufacturing and testing for all legal cannabis products.
There is a need for regulation, though, as many within the industry have concerns that the hype over the introduction of new, legal products will saturate the market with low-quality products. They fear this will diminish the value of the industry overall.
Another side of this is regulations between states. Many companies operate at a national level, but in this industry, that is tricky. The variances between state laws mean a company could find itself in trouble very easily.
One of the hardest parts of starting a cannabis business is the restrictions that come with selling a product that is not legal at the federal level. This prevents businesses from having access to traditional capital. Many who want to get into the industry can’t because they just don’t have the money.
Federal law prohibits the use of federally insured banks. The banks could get into trouble for processing or even holding money made from the sale of cannabis products not legal at the federal level.
The Future Looks Bountiful
While there are challenges to the cannabis industry, it has proved thus far to be hardy enough to withstand them all. The fight to continue to legalize and encourage acceptance of cannabis is still progressing at a good pace. The future of the industry looks to be solid, and for those who want to be a part of it, things look good.