In recent years, the Cannabis Industry has displayed phenomenal growth. It is one of the fastest growing industries, and brings in billions of dollars to the market every year. The growth has been rampant after the pandemic, and researchers have noticed that cannabis flowers have become the most popular product across the world. While cannabis sales in 2020 were recorded to be $13.4 billion, the total sales for the year 2024 is estimated to be around $103.9 billions.
If you think about it, the reasons behind the growth of the cannabis industry are pretty simple. A lot of places have gradually started to legalize it. This means that while marijuana seeds were easily available in California for ages, countries like Thailand and Malta have recently made the distribution of products with cannabidiol legal. Moreover, mental health issues have been on the rise since the pandemic. Experts have recognized the medicinal benefits of cannabis and how small amounts help keep anxiety and other health issues in check. So, the plant has found a market in the medicine industry.
But it is not going to be a smooth ride for the industry. Even with a forecast of unprecedented growth, it needs to tackle many challenges that could spell trouble for the market. These are some of the problems that the industry faces:
- Legalization Issues
The debate over marijuana legalization is a major challenge facing the cannabis market. There are still many jurisdictions that view it solely as a drug, despite widespread recognition of its potential benefits. In these regions, cannabis use and distribution are still illegal. This results in extremely narrow consumer bases, which in turn stunts the industry’s development.
- Lack of Banking Facilities
Because cannabis is classified as a drug for all legal purposes, banks are unable to finance any related ventures. The law states that if an institution gets money from selling drugs (drug trafficking), it would be counted as money laundering since it is a criminal activity. This puts banks in a pretty tight spot since they cannot finance the industry. This renders cannabis entrepreneurs helpless.
- Dealing with Illicit Sales
Even though cannabis is now legalized in quite a few regions, there are still illicit markets that operate across these regions. Since these products are not regulated by any administrative body, they often consist of poor-quality marijuana and other products, which can be harmful for the people who use them. The low prices at illegal markets draw in lots of customers, but it’s easy to overlook the fact that the goods there are of low quality.
- Unfair Taxing Practices
For the longest time, cannabis has stayed on the fringes of society, having been shunned for being “addictive.” The labeling of the products from the plant has resulted in higher taxation policies when compared to other small businesses. They have to pay as much as twice or three times the taxes paid by other companies, which barely leaves any scope for profits. Professionals in the cannabis industry should try to make sure that fair tax laws are put in place so that more people can join the market.
- The Stigma Around Cannabis
While a large number of people have gradually come to recognize the benefits of cannabis and its various products, there are still a lot of people who believe that it should be illegal. The negative media representation of stoners and weed addicts in TV shows and series only adds to this stigma. Steps need to be taken to educate people about the various merits that cannabis has. The public needs to realize that moderation in consumption prevents addiction.
What Does the Future Hold for the Industry?
It is clear that the industry has a lot of potential to grow, but it needs to tackle these challenges first. While the outlook for the industry is gradually changing as more and more regions legalize cannabis distribution, there is still work to be done. The stigma surrounding cannabis and its products has resulted in laws that are still in place and have an impact on the industry, either directly or indirectly. If the officials at the top truly recognize the potential of this plant, they need to take steps to tackle these issues, which result in unfair treatment of the industry.
There are many institutions, like the Cannabis Canada Council, the Cannabis Canada Association, and the National Institute for Cannabis Health and Information, that are fighting to ensure that the industry does not face any unfair treatment.
Qrius does not provide medical advice
The Narcotic Drugs and Psychotropic Substances Act, 1985 (NDPS Act) outlaws the recreational use of cannabis products in India
CBD oil manufactured under a license issued by the Drugs and Cosmetics Act, 1940 can be legally used in India, for medicinal purposes, only with a prescription, subject to specific conditions. Kindly refer to the same here for the legalities of use in India
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