A dozen states have legalized the recreational use of marijuana, and many more are sure to follow. Medical uses of cannabis have been legal in many states for quite a few years, and more are getting ready to liberalize their rules.
The cannabis industry has entered into the kind of a golden age that proponents have been dreaming of for decades. While there are still plenty of opportunities to look forward to, there are also some risks that need to be accounted for.
In fact, there are three dangers that experts have highlighted as most likely to cause problems for participants in the cannabis industry. Become familiar with these and plan appropriately, and you will be less likely to run into trouble.
#1. Many Cannabis Business Do Not Have Enough Liability Coverage
A flood of legalization initiatives in recent years has seen thousands of cannabis-based companies come into being. Many of these were founded and are operated by people who have relatively little previous experience with business.
That is not an inherently bad thing, but it does leave many companies sitting on foundations that could be firmer. Many cannabis business owners, for instance, have not yet made the effort to acquire enough liability insurance.
Whether for slip-and-fall accidents at retail stores or lawsuits alleging false advertising, that can end up being costly. As those who find out more will discover, though, obtaining liability coverage for cannabis companies is as easy as could be.
It is almost certain that many otherwise-viable marijuana businesses will suffer large losses in the near future because of a lack of insurance coverage. Fortunately, this is a danger that is especially easy for proactive owners to address.
#2. Consolidation Could be Coming
Young industries often feature many relatively small players, and the cannabis business is no exception. At a certain point in the development of any industry, though, ambitious, well-funded participants will inevitably become acquisitive.
When that happens, the fortunate owners of takeover targets will often make out like bandits. Consolidation endows buyers with economies of scale and market reach, though, that makes business more difficult for many others.
Certain cannabis companies that get forced to face off against competitors who have suddenly become much larger will likely struggle. Some of these businesses will probably even go under, unless they have planned appropriately.
#3. Hiring Will Get Harder
The nascent cannabis industry has attracted many bright, ambitious people who are excited to get in on the ground floor. As the industry matures further, though, it will become more difficult to hire and retain truly talented workers.
Eventually, the industry will start to seem like a pedestrian-enough place that it will no longer have as much appeal as it does today. When that happens, business owners will need to work a lot harder to recruit the kinds of workers who can help them achieve their goals.
For now, job sites are still going a good job of attracting applicants who are interested in transferring into the industry. Cannabis-business owners, though, are going to start coming up with new ways to keep the resumes coming in.
An Industry With a Bright Future
While these three dangers need to be accounted, the cannabis business will almost certainly remain strong for a long time to come. Simply accounting for these risks by making appropriate arrangements should be enough for any owner of a cannabis-focused business today.