The cannabis market is attracting more and more savvy investors and companies to the field, both established and new. If you’re seeking to compete and maintain and an edge, get to know some of the business challenges remaining on the horizon.
Banking and Funding
Each country has different stipulations regarding permissions for the CBD, and the U.S. has not as yet entirely removed banking restrictions related to the cannabis industry. Businesses based primarily in CBD have to deal strictly in hard cash, which dramatically limits the room for smaller players to expand and market. A concrete business plan is instrumental to keep moving forward.
Public Perception
A firm that deals solely in CBD as its primary product still has to overcome the traditionally negative views of marijuana. While society is light years beyond the outdated demonization of the product, much work remains to make it as socially acceptable as alcohol or even tobacco.
This leaves room for large companies that only have CBD as a sector of their portfolio to squeeze out smaller competitors since the obstacles do not put pressure on their bottom line. A group focused on CBD must strategically enter markets where the barriers are low and can allow the product to slowly build a positive reputation.
Big Competition
Major companies with deep pockets in the beverage and pharmaceutical space have been able to sweep in and establish a firm foothold. This will be a significant obstacle to small businesses trying to create a presence in the field. A small local supplier should lean into its ability to be flexible and personable with customers to keep an edge.
Regulations and Legalities
U.S. laws present a veritable minefield for any CBD enterprise. States vary widely on what is permitted regarding funding, importing, and exporting. This leaves many American firms to rely on foreign investment and banking. A shop near state lines needs to be exceptionally watchful not to run afoul of the law. An astute entrepreneur should retain counsel for clear advice on how to avoid legal entrapments.
Unique Products
Educated customers expect products that can provide their preferred CBD experience, from flavoring to edibles to topical options. Just as in the alcohol industry, trends can sweep through unexpectedly and create a myriad of copycats. An innovative CBD business will be alert to what types of fresh products are coming on the scene, ready to supply the next big thing.
Players in the cannabis industry should constantly watch the changing trends and laws to recognize how to adjust for success. As obstacles and business challenges to the legal cannabis market are obliterated, astute companies will be positioned to take advantage.
