The Marijuana Tax Act of 1937 officially outlawed the growth, production, sale, and general use of the controversial plant. Fast forward to Spring 2021 and the federal government passes a law allowing banks to legally and equitably service the financial needs of businesses within the cannabis industry. How did this entire industry cause Congress and the House to turn over a new leaf?

Complacent Acceptability

Washington and Colorado were the first states to legally permit the recreational use of cannabis. It has barely been a decade since these landmark decisions were made from the State level, but the following changes have been monumental and continue to evolve. Growing public acceptance toward the personal and medical use of cannabis has been the biggest catalyst to more lenient laws at the local and federal levels.

Generational peer pressure has also given way to sound data analysis as a way to promote the public acceptance of cannabis. The natural and arguably effective medical benefits have sparked renewed interest from researchers and medical professionals. The result? Recreational and medical use is now so widely accepted that there are few restrictions on location or frontage for brick and mortar locations.

Effective Marketing

The medical benefits of cannabis products have been touted by business owners, medical professionals, and marketing executives alike. Tablets, oils, lotions, and even food products are being used fairly equally among several different demographics. Ease of use and apparent abundance have made hundreds of products available for people, and even their pets.

Creative marketing within the cannabis industry has quickly boomed, creating new levels of interest for both consumers and investors. Cutting-edge marketing companies have quickly created brand identities and helped develop franchise opportunities for the cannabis industry. Growth and development at this level, which includes everything from packaging to external signage, has made a huge impact on how business leaders see opportunities in the industry.

Lucrative Business Opportunities

Countless farms, harvesting technology companies, and marketing companies have taken their cannabis businesses public. IPOs consistently gained traction and sparked others within the industry to use active markets to raise capital. The obvious next step is for regulated financial institutions to become part of the industry.

Business owners and lenders who are now on board with the growth potential are looking for ways to evaluate their investment risk. Individual investors can track their earnings through individual company stocks. Larger and corporate investors will need a bit more research before backing a cannabis-oriented company.

Independent Evaluations

Valuation reports within the cannabis industry are fairly new and must be considered with many relevant factors. Existing business opportunities may come with previous debts and outstanding promissory notes. Businesses that began without the benefit of a qualified banking institution may have complex financial and tax records. A complete valuation by Appraisal Economics will present an accurate picture of the business or investment opportunity. Our experts will sort through the data to assess growth and profitability within a cannabis-based virtual or storefront business.

Before this federal legislation, legitimate businesses within the industry were forced to rely on cash transactions, private investors, or costly alternative financing programs. With permission from the government to utilize federal banking institutions to operate and even finance, entrepreneurs within the cannabis industry have a whole new opportunity available to them.