Cannabis entrepreneurs are hardworking men and women who just want to take control of their financial destiny. And for those who are willing to take a chance and bet on themselves, there’s never been a better moment than right now to start a marijuana business.
People working in the cannabis industry have been called outlaws, scum, deviants, and a few other names I can’t repeat here.
The mainstream media hasn’t helped. When they write a story about a cannabis farm, they go out of their way to feature a picture of a college-aged person with dreadlocks, trimming a marijuana plant.
When I talk to cannabis executives today, they tell me they used to be afraid to tell their friends and family what they did for a living. They didn’t want to be thought of as drug peddlers.
But fortunately, perceptions are changing.
Folks starting cannabis businesses are now called entrepreneurs, and they deserve to be.
Just like any entrepreneur, these are hardworking men and women who just want to take control of their financial destiny.
And for those who are willing to take a chance and bet on themselves, there’s never been a better moment than right now to start a marijuana business.
Here’s why this is such an exciting time for anyone involved with the $10 billion marijuana market…
The Farm Bill
The 2018 Farm Bill legalized the production of hemp on December 20, 2018.
Hemp should have been legalized a long time ago, since it doesn’t contain the same psychoactive compounds as a marijuana plant. It won’t get you buzzed.
But it’s better late than never.
Even with restrictive laws, the U.S. hemp industry reached $820 million in sales in 2017. With production finally legalized, the Hemp Business Journal projects the U.S. hemp market will be worth $1.9 billion by 2022.
Within the same market, we are also excited about a new wave of CBD products.
CBD, or cannabidiol, is the main non-psychoactive component of cannabis. It, along with other non-psychoactive compounds in cannabis, shows enormous promise for treating a variety of symptoms, including post-traumatic stress disorder, autism, schizophrenia, and more.
Within a few months, CBD will be available in a much larger variety of products. You will be able to choose among tinctures (currently the primary form of consumption), gummies, energy shots, nutrition bars, skin moisturizers, infused ingredients like honey, and more.
In fact, I’m predicting the demand for CBD products to at least triple to nearly $2 billion in 2019. Hemp can be used for almost anything.
I’m talking about fueling your car with hemp seed oil or using hemp seeds to bake pasta and cookies.
But that’s just the start.
As creative entrepreneurs enter the space, expect to see a flood of hemp-derived products.
Legalization in New States
In the 2018 elections, voters in a slew of “conservative” states made their voices heard, legalizing some form of cannabis.
Missouri and Utah both legalized medical marijuana, and Michigan voters decided to legalize recreational cannabis.
Michigan could bring in $134 million per year from cannabis taxes, according to the Detroit Free Press.
At last week’s Benzinga Cannabis Capital Conference in Miami, we had a chance to meet up with Founding Advisory Board Member John Vardaman, Executive VP of Hypur Inc. and co-author of the Cole Memo. John had a lot to say about banking, legalization, and prospective attorney general William Barr. Click here to watch the whole interview.
I believe one of the big sells of legalizing cannabis in Michigan was the jobs it would create. The whole state was looking for something to replace the jobs the auto industry used to provide. Thankfully, they now have it with cannabis.
Legalization means cannabis entrepreneurs can start a business from scratch, establishing an early foothold in a new market.
More startups will mean more opportunities to invest in IPOs – but we’ll get to that in just a bit.
Voters in other states will also want the opportunity to access well-paying cannabis jobs. In 2019, Connecticut, Illinois, New Hampshire, New Jersey, New Mexico, and New York are all candidates for legalization.
And be prepared for legalization to happen fast…
At the American Cannabis Summit, Former Speaker of the House John Boehner went as far as to say he has a strong suspicion we won’t be waiting five years for the federal government to legalize cannabis.
“When that happens, whenever that happens, our guys are saying the industry will double, practically overnight,” Boehner said.
Make no mistake…
The Farm Bill and cannabis legalization will create an unprecedented number of jobs, and we’re going to see even more opportunities for entrepreneurs with legacy companies finally feeling comfortable enough to enter the market.
Name-brand firms will create entire divisions dedicated to integrating CBD and THC into their products.
In September 2018, Bloomberg reported Coca-Cola was in discussions with Aurora Cannabis (NYSE: ACB, TSX: ACB) to develop CBD-infused drinks. Coke CEO James Quincey said he doesn’t “have any plans at this stage” to make CBD drinks, but it will happen sooner than later.
But this is what would really unleash the flood gates for a new wave of cannabis entrepreneurs in 2019…
Cannabis Businesses Finally Accessing Bank Funding
Banks avoid risk like the plague, and they don’t want to lend money to a business that is illegal under federal law. They have to worry about being accused of money laundering.
Unfortunately for cannabis entrepreneurs, that means they generally can’t receive a loan from a bank or credit union to buy property, equipment, or to expand their advertising.
Also, operating as an all-cash business, security costs become astronomical.
Because of this, some of the best and brightest minds are sitting on the sidelines.
I don’t blame them. In the startup world, 9 out of 10 companies fail.
Especially for a U.S. cannabis entrepreneur, the odds have been stacked against them.
However, there’s some good news.
Some banks are willing to take the risk and will lend to cannabis entrepreneurs.
As of March 2018, 411 banks and credit unions actively operated accounts for marijuana businesses, according to Forbes.
They are most likely working with medical marijuana firms, but that will hopefully expand to recreational companies.
Also, Treasury Secretary Steve Mnuchin understands that banks not opening accounts for cannabis entrepreneurs is holding back the industry.
In testimony on Capitol Hill, he said that solving cannabis business’ financial problems is at the top of his list of concerns. He has also said separately that he wants to find a solution for cannabis businesses that need to deposit large amounts of cash.
This is great news for cannabis entrepreneurs, but it’s even better news for cannabis investors. The more new startups enter the market, the more startups there will be that eventually go public.
Those who get in early will make the biggest long-term gains.
As the latest news breaks, we are going to be right there with you, each step of the way.
Once again, I’d like to thank you folks for being an integral member of the National Institute for Cannabis Investors,
Executive Director, National Institute for Cannabis Investors
P.S. I’m going to be frank with you. The astronomical profits we’ve seen in cannabis so far are just the warm-up act. 2019 is gearing up to be another landmark year for the cannabis market. In fact, compared to 2018, 2017, or any other year, cannabis is expected to create wealth at an unbelievable speed in the New Year. And if you click here, we can help put a team of experts – who’ve made real money in this industry – by your side to help you become a millionaire this year from cannabis.
13 responses to “Why It’s the Perfect Time to Be a Cannabis Entrepreneur”
January 22 2019