Every time another state seems poised to enact a medical cannabis program, entrepreneurs begin lining up in hopes of obtaining a license. Some want to be growers. Others want to be processors or set up dispensaries. The one thing they all have in common is the belief that medical cannabis is their ticket to success. They soon find out that the medical cannabis industry is not for the faint of heart.
Running any kind of business has its challenges. That may be one of the reasons most people are content to find a job working for someone else. It takes a lot of fortitude and perseverance to operate a successful company. Yet in the medical cannabis sector, the normal challenges of running a business are amplified many times over.
Banks Don’t Want the Business
Every new business needs access to financial services. Entrepreneurs need loans to get things up and running. They need checking accounts to pay their bills. They need access to credit cards, revolving line of credit, etc. Unfortunately, one of the first things new cannabis business owners discover is that banks do not want their business.
Banks have to walk that fine line between serving customers and not running afoul of the law. So many do not even want to consider the cannabis space because marijuana remains a Schedule I substance under federal law. No banker in their right mind wants to risk feeling Washington’s heavy hand in order to do business with medical cannabis growers, processes, and dispensaries.
For a dispensary like Salt Lake City’s Beehive Farmacy, not having access to banking services presents a number of challenges. For example, both their Salt Lake City and Brigham City locations operate on a cash-and-carry basis. They do not have much of a choice.
E-Commerce Operators Are Interested
Struggling to find a willing bank is just the start of the challenges faced by medical cannabis businesses. Even if they can find alternative banking solutions, entrepreneurs struggle with online services as well. Web hosting companies and e-commerce operators alike are not interested in doing business with them. Why? Because of the same liability concerns expressed by banks.
E-commerce operators are particularly wary. They know that e-commerce crosses state borders. So facilitating sales between customers in one state and retailers in another would constitute trafficking across state lines. Operators just don’t want to take their chances.
Shipping Is Another Challenge
Even shipping can be a challenge for legitimate cannabis businesses. For example, imagine you run an industrial hemp operation in Utah. Industrial hemp is legal throughout the U.S. But what if you want to ship some of your product to Nevada for testing? Most of the major shippers will not touch it due to liability concerns.
You can ship industrial hemp via the U.S. Postal Service, but your average postal worker isn’t familiar with the law. With every shipment, you run the risk of overzealous postal workers confiscating your packages because they smell like marijuana. It happens all the time.
Perseverance Is a Must
Banking, e-commerce, and shipping are just three of the challenges business owners in the medical cannabis industry face. There are even more, including community resistance whenever a new business is established. Suffice it to say that legal medical cannabis business is one of the hardest to establish in this country.
Perseverance is a must. If you want to start a growing operation, a processing plant, or a community dispensary, be prepared for one hurdle after another. Yes, there is money to be made. But only those willing to persevere find success.