US cannabis industry still face huge risks
Insurance Business Magazine explores some of the top risks facing cannabis businesses in the US today.
The publication highlights that the industry saw sales of recreational and medical cannabis top USD$27bn in 2021 – this is around a third more than what was generated by Starbucks in the same year.
Despite these successful sales, the industry still faces major risks including:
- The supply chain
- Reputational damage
- Product liability
- Regulatory compliance
- Natural disasters
- Workplace injury
- Cyber security
“Maintaining compliance with industry regulations can make or break a cannabis business,” notes risk intelligence platform Resolver. “Cannabis regulations differ depending on the location of the business. But it’s clear that regulators are not turning a blind eye when it comes to ensuring that cannabis companies are compliant.”
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Calls for Biden to federally legalize and grant local clemency
According to Marijuana Moment, Rep. Eleanor Holmes Norton (D-DC) is calling on President Biden to allow Washington, D.C. to establish a commercial cannabis market and grant clemency on its own.
The congresswoman has said Biden’s announcement is a step in the right direction, but that the clemency process needs to be reformed.
The publication highlights that officials in D.C. have their hands statutorily tiedm, as only the president is able to pardon people for D.C. violations. Most other States have some independent process by which governors and pardon officials are able to provide that relief.
“D.C. should not have to rely on the president to exercise mercy and mitigate the harms of unjust policies,” she said. “D.C. should have the authority to grant clemency for D.C. crimes, like the states and territories have for crimes under their laws.
“The Biden administration should publicly endorse giving D.C. this authority.”
STOP RIGHT THERE
Ontario retailers warned against selling to unlicensed operators
MJ Biz Daily reports that the Alcohol and Gaming Commission of Ontario (AGCO) is warning licensed retailers against selling their inventory to “unlicensed third parties upon the closure of the store.”
According to the publication, the warning came in response to an offer from a company called Leafythings Canada to buy struggling stores’ cannabis inventory.
With more than 1,600 cannabis stores set to open in the State and 300 more in the application queue, there are increasing concerns that significant numbers of stores might not survive.
The regulator stated: “Failure to properly dispose of inventory before you close may result in compliance activity by the AGCO or action from other law enforcement agencies.”
Despite market turmoil, now is a ‘great time’ to be investing in European cannabis
It has been a difficult year for cannabis investors, reports BusinessCann, in light of global bear markets. However, speaking to the publication, venture capital fund Oskare Capital, said it believes now is actually a “great time” to be investing in European cannabis.
Managing Partner Alexandre Ouimet-Storrs explains he is optimistic about the sector for a variety of reasons, including:
- Big pharma is looking at the endocannabinoids system in earnest.
- There is a large amount of research being carried out with cannabis in oncology, pain and central nervous system disorders.
- New money is coming into the sector.
- The medical cannabis sector is well regulated.
- The sector is seeing an increasing amount of interest in private equity and venture.
“Building an industry, professionalizing it and making it more sustainable from a financial and ecological perspective is a big task, with a lot of work to do. Because of this, it’s a market extremely well suited to venture capital. We believe the returns will be excellent, but more importantly, that these medicines and products will significantly improve people’s lives, and often those people are those who most need help,” said Ouimet-Storrs.