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Challenges Faced by the Medical Marijuana Industry

Challenges Faced by the Medical Marijuana Industry

A bunch of Marijuana, business law

Every since lawmakers passed the pilot medical marijuana program in Illinois in 2013, the marijuana industry has experienced its own share of growing pains. Despite generating more than $42 million in retail sales, entrepreneurs continue to suffer from the stigma that surrounds marijuana. Just a few of the challenges faced by those in the marijuana business include:

  • Capital: Like with other industries, the challenges for a marijuana start-up often begin with capital. Although the United States Department of Treasury has given the go ahead for lenders to work with marijuana entities that are legal in certain circumstances, many still remain hesitant. In fact, only a few lenders in Illinois are willing to develop business relationships with those in the marijuana industry, which makes finding access to the money needed to fund a developing business difficult.
  • Bank Accounts: There is a lot of red tape that goes along with marijuana companies simply having a bank account- like having extra paperwork to prove compliance. As a result, banks charge expensive fees that make it more tempting for those in the industry to run solely off of cash and money orders. Since having a large amount of cash is tempting for criminals, many marijuana companies are forced to beef up security.
  • Qualifying Conditions: In Illinois, there are only 41 conditions that qualify patients to obtain medical cannabis legally. With such a limited clientele, many companies have been expanding their business to other states.Those in the industry must be in compliance with the laws in all states with which they do business.
  • Strict Regulations: Although many of those in the medical cannabis industry agree that strict regulations could help do away with the stigma that companies face, many of the rules in Illinois have interfered significantly with the industry’s growth. Cultivation centers, for instance, are restricted from advertising their products to the general public. And rules for the disposal of cannabis waste are another expense companies face.
  • Facilities: In Illinois, dispensaries are required to be at least 1,000 feet away from schools and daycare homes or centers. And since very few landlords are willing to work with a marijuana company, finding a suitable location for a business can be like finding a needle in a haystack.

As the marijuana industry continues to grow, new laws and changes are continuously on the horizon, and cannabis companies, business law attorneys, real estate professionals and others should stay updated in the coming years.

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