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Cannabis companies cite lack of banking access as the biggest issue facing the industry according to a new survey.
Some of the other issues facing the industry were listed as difficulties accessing investment capital, the legacy market, market volatility, big business competition, and taxes.
Researchers conducted a survey of 396 licensed cannabis companies about challenges facing the US industry. Over 70 per cent of businesses said that the lack of access to banking or investment capital was their top challenge. A further 42 per cent said that state regulations were a huge problem with only 39 per cent referring to the influence of the legacy market.
The report also highlighted that fewer than half of those who responded are currently making a profit. In terms of profitability, women respondents and non-white respondents are faring much worse than white, male respondents. Only 40 per cent of those surveyed believe that the industry is ‘heading in the right direction.’
The banking difficulties are often caused by federal laws and regulations that discourage banks and financial institutions from working with cannabis companies. The Safe Banking Act aimed to amend federal banking laws although the senate refuses to debate this issue.
Beau Whitney, founder and chief economist at Whitney Economics said: “Operators are kept up at night worrying about how to survive in an environment where there is little support, extremely strong competition from illicit dealers from one side, and the existential threat of corporate competition on the other. The only solution for operators is to advocate for a level playing field and hope that reform will occur sooner, and not later,”
The ‘U.S. Cannabis Business Conditions Survey Report‘ was conducted by Whitney Economics. They collect data on hemp and cannabis cultivation, processing, investment, manufacturing, regulation and legislation to build insights into the industry.
The survey was conducted in October 2021 and collected responses from businesses in 20 states. It aimed to examine policy, regulations, success and the industry. It will be the first in a series of ongoing quarterly reports into economic conditions.
