Wherever one stands on the debate about whether cannabis should be legal, everyone can agree on one thing: cannabis has the potential to become a $40 billion industry that affects a host of industries. According to a market analysis report from Grand View Research, the U.S. cannabis market size was valued at $10.8 billion in 2021 and is expected to expand at a compound annual growth rate (CAGR) of 14.9% from 2022 to 2030.
Thanks to the Farm Bill of 2018, hemp was removed from the government’s list of controlled substances. The differentiator between marijuana and hemp is the amount of THC (the substance in marijuana that produces a high) contained in the plant. Marijuana plants can contain up to 30% THC, whereas hemp has 0.3% or less.
Legal Profession Recognizes Potential
In 2015, the legal profession formally recognized the potential of the cannabis industry when it organized the National Cannabis Bar Association (NCBA). The NCBA was organized to assist consumers and enterprises operating within the legal cannabis industry. In addition to litigating, cannabis lawyers offer advice about forming companies, drafting contracts, protecting intellectual property and achieving compliance. Currently, the NCBA is in the process of transitioning from the NCBA to the International Cannabis Bar Association.
Banking Industry Takes Notice
The banking industry also has taken notice. Because marijuana still is illegal at the federal level, many of the nation’s largest banks are reluctant to accept legal cannabis companies as clients. This is a significant barrier to entry for these companies, which can process $50,000 to $75,000 in transactions per day. The result is a lucrative new marketplace for local banks and credit unions. About 400 of such entities now serve this market. They charge high fees, but their customers? find paying them to be a better alternative than dealing in large amounts of cash.
The federal government is watching. In March 2019, the House Financial Services Committee proposed a law that would provide safe harbor to banks that want to work with legal cannabis businesses.
Cryptocurrencies are also being utilized by legal cannabis businesses. These currencies might be a boon to cannabis companies because they could increase security and transparency. Many such currencies are being developed specifically for the cannabis industry. Some of them are completely unique, whereas others are based on bitcoin or other blockchain-based currencies.
Other Sectors Enter the Market
Services aren’t the only industries to enter the market. Specific industry sectors are also doing so, including the following:
- Health and wellness. CBD oil products claiming to offer relief from pain, anxiety and depression are rapidly becoming mainstream. These products, which don’t contain THC, are attractive to people who want relief without worrying about becoming addicted.
- Textiles. Hemp, which now is legal to grow in the United States, can be used in textiles. It is ecofriendly, holds its strength when wet and has antibacterial properties. These qualities make it appealing to environmentally conscious markets.
- Construction. Hempcrete is a building material made with industrial hemp hurds (woody fibers from the plant core), lime and water. It is mold resistant, carbon negative and provides structural support. In short, it has the potential to significantly impact the construction industry.
Other sectors are being similarly affected. The burgeoning cannabis industry is creating opportunity for those with the foresight to take advantage of its many possibilities. Call us today for more information about ways to participate in this emerging sector.
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