The legal cannabis industry is hurting and ALL cannabis companies need to come together to fight the issues and challenges that prohibit a prosperous industry. Nobody is going to be successful in cannabis unless there are significant changes in the industry. Changes regarding federal regulations, taxation, access to banking, and other significant barriers to successful business operations and financials. While winning over your competition is always a paramount issue in all industries, it is likely that collaborating and working with your competition to drive changes, at this point in the cannabis industry, is likely to impact long-term viability and prosperity for your company.

Let’s examine the key issues that we all need to tackle, together.

Rescheduling Cannabis

Cannabis is currently listed as a Schedule I drug according to The Controlled Substance Act and has equal classification to heroin, LSD, ecstasy, methaqualone (Quaaludes), peyote, and psilocybin mushrooms. Rescheduling cannabis would allow cannabis research and development to take place more easily. It would also allow operational costs to be deducted for taxable revenue.

While many of us look for cannabis to be legalized at the federal level, rescheduling cannabis would be a most positive first step toward that agenda. Most importantly, it would allow benefits to consumers (both medical and recreational adult-use) due to increased research as well as affording cannabis business to deduct expenses for businesses tax calculations as similar in other industries.

Safe Banking Act

Cannabis companies cannot utilize banks the way most companies do so. The fact that cannabis is federally illegal and most banks operate in multi states (and thus under federal regulation) means banks cannot work with cannabis companies. The Safe Banking Act bill (that has yet to pass through legislation) would prohibit a federal banking regulator from penalizing a depository institution for providing banking services to a legitimate cannabis-related business.

Changing Cannabis Taxation

Taxation on cannabis varies from state to state but it is safe to say that tax percentages on cannabis business hamper prosperity. You should check your specific state’s taxation code for cannabis. Cannabis taxes do run higher than all other commerce items. Cannabis taxes are exorbitant and onerous and at numerous points within the supply chain of delivery ultimately to consumers causing inability to compete with the gray or illegal markets that do not pay taxes.

Elimination of Unlicensed Cannabis Sales

Licensed cannabis companies would prefer if there were no “gray markets” for cannabis, but so many “unload” their supply to these markets. It seems to be a necessary component to secure funds for their surplus inventory. While each company does this “just a little bit” and thinks that it makes no difference to the industry as whole, the summation of all that do so is killing licensed cannabis operators’ prosperity. Additionally, a large percentage of cannabis consumers turn to the illegal market because it is cheaper to do so. I get the motivation from consumers and businesses to operate in this manner. But do not be fooled. Such actions are killing the ability to grow and mature legal licensed cannabis operations. If we want to see legal cannabis actually evolve to a real consumer market (and I think all of us ultimately want this), we must band to eliminate the gray market by lowering the barriers to entry so all can participate, ultimately allowing the best to rise to the top.

These are the four main obstacles making it difficult for cannabis companies to be profitable, as I see it. If we want to see rational change to the laws, rules, and operations handcuffing the industry, we must do it in unity. This means collaborating in a collective manner that includes working with your direct competition. There is power in numbers.

While it may seem counterproductive to collaborate and work with your competition, I see no other alternative if we want to drive change. The cannabis industry is nascent and at this point we must all band together to drive necessary change – even with the competition. This is the manner in which we must proceed or no one will prosper.

Let’s do it! There is no shortage of existing associations and organizations committed to driving change as outlined here. If you need recommendations regarding how you can get involved, please reach out to me. You can find me on LinkedIn. Or please reach out to the Beard Bros – Bill and Jeff. Their knowledge of all facets of the cannabis industry is unmatched.

Put skin in the game and make it happen!

About Steve Goldner

Steve Goldner brings 15+ years of marketing leadership experience in the areas of brand, product, communication, and go-to-marketing strategy, planning, execution, and reporting to the cannabis industry. For the past two years he has been marketing for cannabis companies. He has deep passion for the cannabis industry as a whole delivering pro bono marketing support for The Council for Federal Cannabis Regulations (CFCR) as part of their core team, and advising an African-American man who spent years of incarceration as result of the war on drugs. Feel free to contact and connect with him on LinkedIn here.

Enjoyed that first hit? Come chill with us every week at the Friday Sesh for a freshly packed bowl of the week’s best cannabis news!