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High & Dry: Banking crisis to further choke funding for cannabis sector

Cannabis Daily News

BANKING

High & Dry: Banking crisis to further choke funding for cannabis sector

The global banking turmoil threatens to squeeze U.S. cannabis companies already struggling with meager funding sources by drying up support from regional lenders and tightening fundraising from alternative avenues, reports Market Screener.

The publication highlights that U.S. cannabis borrowers could also see their interest rates go up further due to the crisis, with the average interest rate in the cannabis sector can be as high as 20% compared with the 5% to 5.7% average rate for business loans from traditional banks.

Expensive loans may not be the only challenge for the sector. Chances of weed companies securing new capital have now deteriorated, and Morgan Paxhia, co-founder of cannabis hedge fund Poseidon Investment Management told the publication: “It’s incredibly hard raising capital in cannabis, but we now think (opportunities to secure new capital) are even lower as investors are cautious.”

REGULATION

Canada consulting on possible amendments to Cannabis Regulations

Canada’s federal government is launching a consultation that could lead to amendments to the country’s Cannabis Regulations, which govern the production of legal cannabis, reports MJ Biz Daily.

According to the publication, the consultation opens the door to possible cannabis regulatory reforms in several areas, including licensing rules, security requirements, production requirements and packaging and labeling regulations.

Health Canada’s notice stated that the country’s “legal cannabis industry has matured, the marketplace has evolved, and there is increased knowledge and data on public health and public safety risks associated with certain activities.”

VAPING 

Marlboro maker plots new path to smoke-free future after losing billions on Juul

America’s biggest cigarette company has a new plan to shift its business toward less-harmful products, after a string of failures, reports The Wall Street Journal.

Marlboro maker Altria Group Inc. earlier this month divested itself of e-cigarette maker Juul Labs Inc., recording a loss of at least $12.5 billion. The publication has reported that Altria now hopes to take its reduced-risk products overseas and is considering expanding into non-nicotine offerings such as cannabis products or caffeine pouches.

Commenting on Altria’s past attempts to develop or acquire vaping products, Chief Executive Billy Gifford said: “Previously, we were chasing the market. You’re constantly watching what the consumer is telling you in the marketplace, but none of them were satisfying the consumer enough to ultimately meet all of their needs and desires.”

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