The “Headaches” of the Legal Marijuana Industry
The “Headaches” of the Legal Marijuana Industry
The legal-marijuana industry faces many challenges to doing business.
Most companies in the space are frozen out of bank, cannot use credit cards for transactions, and cannot get loans, huge headaches for the industry.
And marijuana is like any other commodity: when there’s a supply glut, the price falls. That is what is happening in legal markets like Colorado.
Cultivators are ramping up production and the price of marijuana is falling, causing profit margins for growers to decline.
Marijuana companies, especially those that deal with the plant directly, are squeezed between the high cost of doing business and lower profit margins from the falling price of cannabis.
Then there’s the banking problem.
Financial institutions that do business with marijuana companies often charge exorbitant fees to offset some of the risks of dealing with these businesses, as marijuana is still federally illegal.
In its most recent “Beige Book,” the...
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