So far, 21 states have legalized recreational cannabis use for adults, while medical marijuana is legal in 37 states, but some industry insiders have had a hard time making green money off their bud.
For instance, along the West Coast, there’s tons of cannabis, but federal law prohibits growers from selling outside their home state. The result has led to some licensed growers funneling products to the out-of-state illicit market just to stay afloat, according to The Associated Press.
The federal government could alleviate some of the monetary issues by passing the SAFE Banking Act, which would prohibit federal banks and other depository institutions from being penalized by federal banking regulators for providing banking services to cannabis businesses.
Barry Walker of Tradecraft Farms says the current situation is unsustainable.
“It’s about having operating capital, being able to get a loan, not paying egregious interest rates,” Walker explained to HuffPost by email. “Paying north of 30% for debt is not out of the normal in our industry right now. And we are appreciative when we get it. That’s where the industry is at right now.”
But he said everything would change when the SAFE Banking Act passes.
“The entire U.S. investment pool opens up,” Walker said. “Rates come down to five, maybe 6%, and then companies don’t have to make dangerous moves to survive.”
However, Senate Banking Chairman Sherrod Brown postponed hearings last month to deal with the banking crisis caused by Silicon Valley Bank and Signature Bank, according to Crain’s New York.
That’s causing problems for people like Bryan Gerber, co-founder and CEO of Hemper, a cannabis subscription service.
“With the continued failure of Congress to pass the SAFE Banking Act, cannabis retailers continue to lack access to safe, secure financial institutions,” Gerber told HuffPost by email. “This complicates capital-raising opportunities and dries out markets. Once this challenge is overcome, the market will finally have a chance to reach its full potential.”
But for that to happen, the federal government will also have to remove cannabis from Schedule 1, the federal law’s classification of drugs, substances, or chemicals that have no currently accepted medical use and a high potential for abuse.
Some cannabis insiders like Lisa Black, a training coordinator at Insa Cannabis, are optimistic that the change in classification could come soon.
“There’s hope on the horizon! President Biden has told his attorney general to initiate the process of reviewing how marijuana is scheduled under federal law.’” Insa told HuffPost by email. “It’s a small step but a crucial one!”
Others, like cannabis industry consultant JM Balbuena, say many socio-economic and political factors, including international cooperation, need to align before that can happen.
“The United States is a signatory to several international drug control treaties that prohibit the production, distribution, and use of cannabis,” Balbuena emailed HuffPost. “To remove cannabis from Schedule 1, the U.S. would need to work with other countries to renegotiate these treaties or to establish a new global framework that allows for the federal legalization of the plant.”
But despite the challenges, there are plenty of positives, according to cannabis activist Steve DeAngelo.
“Our underlying market continues to grow, even though regulations have, for the most part, prevented us from effectively serving it,” DeAngelo told HuffPost in an email. “Every recent statistical study of cannabis consumers shows more and more people are consuming in almost every part of the world, so once we get workable regulations, there will be a rich and robust market for us to serve.”
George Sadler, the CEO of GelatoCanna, a San Diego-based cannabis purveyor, says the country is getting closer to the normalization of cannabis.
“If you look at the statistics, Gen Z prefers cannabis to alcohol,” he told HuffPost. “The ‘stoner stigma’ just isn’t there with the younger generation, and that shows a lot of progress within the cannabis industry.”
Sadler is also happy that the legal market has become more consistent in terms of quality, something he says “you don’t find… in the illicit market.”
Arshad Lasi of the Oklahoma-based Nirvana Group said cannabis “has the potential to become as ingrained into our lives like coffee or vitamins” and says the industry is trending towards commodification.
“We’re transforming specific aspects of cannabis into different forms for a variety of functions, such as gummies marketed for sleep, post-workout beverages, topicals for cosmetics and more,” he told HuffPost.
Katie Enright, whose company Lavinia creates cannabis products designed to enhance sex, says there has been “a surge in demand” for cannabis-infused consumer products, such as edibles, beverages and topicals.
However, she predicts as more research comes out regarding the potential medical benefits of cannabis, the substance will increasingly be used to treat a range of conditions, including chronic pain, anxiety and epilepsy.
The way cannabis is consumed is changing, too.
Although some people still prefer good old-fashioned flower, edibles have taken a foothold for a good reason, according to Colby Wohlleb of Diet Smoke.
“I think in today’s culture, convenience is king,” Wohlleb admitted. “You can’t light a joint on a plane and watch ‘Crazy, Stupid, Love’ for the 20th time, but I can eat gummies. I love the smell of weed, but I can’t walk about my day-to-day smelling like it.”
Wohlleb says the growing popularity of edibles also re-opens the door to people who haven’t “smoked” in years.
“For some,” Wohlleb said, “a little gummy at the end of the day can be less intimidating than rolling a joint or packing a bowl.”