There is nothing worse than trying to build a company that is under-capitalized. The entire cannabis industry is undercapitalized.
Raising money to build a cannabis brand is nearly impossible. Sure, there are family and friends and, if you are lucky, a family office, but do not look to venture or private equity. There are always exceptions to the rule but few and far between in this $30B industry.
I have seen more than a few balance sheets of cannabis brands. The ones that are succeeding run solid operations, but because cannabis is Federally illegal, few want to participate. The Federal Government benefits tremendously, but staying afloat as a company is almost impossible.
The opportunities in the cannabis space are endless for investors but, most importantly, jobs for the economy. In the next few years, we will witness countless companies go under that were insanely well-capitalized but poorly managed. Those jobs are in need of new industries for these employees to hang their hats. It is not going to be pretty.
What is holding the Federal Government back? Pharms and cigarette lobbyists? Back-end deals? We do not know the answer, but we do know the cat is out of the bag, and it is time to legal cannabis so investors capitalize these businesses.