Roadblocks still exist despite promising future for recreational marijuana
May 03, 2016 02:38 AM EDT
The lack of financing tools in the cannabis industry is considered as one of its pitfalls. Although projected sales could reach to billions, entrepreneurs in the weed trade still need more assistance from the government.
According to Forbes, the size of the market of legal marijuana in the United States is projected to grow to $7.1 billion in 2016. It represents 26% growth over the previous year which was driven largely by adult recreational sales of cannabis.
As reported by Fox News, with more states allowing the sales of recreational marijuana, the legal retail sales could reach to $6.7 billion in this year's sales alone. Experts believe that the blooming industry of cannabis is on fire and will not be burning out anytime soon.
But according to a Colorado-based cannabis business expert, Jill Lamoureux, there is a misconception that money is just everywhere in the cannabis industry. Lamoureux has established a dispensary in Colorado and has helped in creating the framework in legalizing marijuana sales in Colorado in 2014.
Lamoureux reiterated that creating a scalable and legal cannabis business is not easy. She added that the transportation of the product alone across states can be tricky and sometimes illegal. The business is very capital-intensive, she said as per CNBC.
Despite the hurdles, Nick Hofmeister, a mentor at CanopyBoulder, said there are already infrastructures that help the businesses do customer development and aid in networking. CanopyBuoulder, which was founded in 2014, is a seed stage business accelerator that focuses mainly on legal marijuana. The company partnered with ArcView Group, which is a cannabis research company.
Patrick Rea, the co-founder and executive of CanopyBoulder, said there is a belief that investors are writing checks left and right but it just doesn't work that way. Rea added that marijuana doesn't have a free pass from the laws of economics that affect every business. He said getting investors to write a check is a hard one considering the business is just starting to grow.