When California legalized recreational cannabis in 2018, people all over the country and the world saw the Golden State as a golden opportunity to build a cannabis business. However, things didn’t go as planned for a lot of companies. The market was expected to generate $1 billion in tax revenue in 2018 but came up short — quite short. In 2018, California only took in $345.2 million from legal cannabis.
With high taxes, intense regulatory framework and countywide bans on dispensaries, it is no surprise many cannabis companies didn’t survive. So how can businesses in this industry avoid becoming another California cannabis casualty?
The first necessary step in ensuring you don’t become another California cannabis casualty is having the proper funding to pay the higher price tags you are going to run into.
If you think funding to start a cannabis company is like starting any other business, think again. Yes, you have to pay for buildout, accountants, rent, lawyers, employees, marketing, licensing, etc like other industries. However, the cannabis industry is like paying for a wedding – when you put cannabis in the name, you end up paying much more.
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