The marijuana industry in the U.S. has been noted as the largest sector of the industry in the world for some time now. The U.S. market, however, is not without its flaws, and the recent legalization of recreational cannabis throughout the whole of Canada has helped to point some of these out.
Canada effectively legalized the use of recreational cannabis several months ago, but this only went into place a few weeks back on October 17th. Since that time, the country has been working to secure its new laws into place and getting ready to meet the high demands of the people domestically. The country has also decided to change some of the older laws that deal with the criminalization of the substance and how these individuals are treated by the judiciary system there. The idea is that the legalization in Canada could help to create a solid test case for not only the U.S., but other states to follow as well. Terry Taouss, present of the company Tidal Royalty, stated that “The Canadian experience has required co-ordination across all levels of government (federal, provincial, municipal) and it is going to provide a framework.” This coordination is something that has helped to completely shape the space into a feasible way to run the market.
Many people in the banking industry have also decided to get into the cannabis space due to the massive amount of potential that has been shown across the industry. The real prospect here however lies in the fact that when cannabis is federally illegal, businesses cannot use the traditional banking services that they would normally need to survive. This has created a very complicated system in the U.S., where companies have ended up using armored money transfer services as a way to hold their income when they aren’t able to have bank accounts. The other issue out of many comes from paying workers. Without bank accounts, often times those who work at dispensaries have to be paid in cash. This creates a difficult and often dangerous system to work off of, and one that desperately needs to be fixed.
Cannabis companies in the U.S. have not been able to access these various methods of gaining capital which has meant that they have had to go through private equity firms. Dan Anglin, founder and CEO of CannAmerica, stated that “Banks more than most should be pushing Congress for better guidance on doing business with Cannabis companies through federal legalization.” The situation on the banking side of things in the U.S. can solely be contributed to the federal illegality of cannabis as a substance. In order for these issues to begin to get ironed out, cannabis needs to be rescheduled from its high listing in the U.S. Then and only then can cannabis begin to flourish nationwide as one of the fastest growing industries of the modern day. Until then, cannabis remains a billion dollar market whose growth is ultimately in the shadows.