Why Cannabis Businesses Will Fail

While the number of businesses that have failed is relatively small, many more failures are coming.

Summary:
Limited License States
Population Matters
Adjoining States
People Make or Break It
3 Skillsets You Need
The "But I’m Not a Stoner" Bias
An Overpaid C-suite

Let's use Flow Cannabis recent failures as a learning example;

By vowing to help underground cannabis farmers in the Emerald Triangle become legal growers, Flow Cannabis Co. became the vanguard of the historic Northern California growing region. “At the end of the day, I felt like they used the farmers and the product that they got to be able to attract more investment capital.”

The business recently weathered layoffs and executive departures, including its president, chief operating officer and a co-founder of the company as well as the interim CEO.

Further accelerating Flow Cannabis' fall was the fact its high-stakes wager was predicated on the federal government legalizing marijuana.

Flow Cannabis fell victim to many of the same factors that have undercut cannabis and mainstream businesses alike.

Its plight offers lessons for cannabis industry executives and investors, as well as small marijuana farmers, by shedding light on key issues that can trip up a company, an investor or, in this case, an entrepreneur.

Think overly ambitious goals, ill-advised assumptions (Uncle Sam would legalize marijuana sooner than later), tumbling wholesale marijuana prices and failure to read contracts carefully. A limited market makes success likely. A team that covers all the bases, is not filled with ego, and is paid reasonably will do well.

The future will see more cannabis businesses go under than have so far, but much more money will be made than lost.

Episode 878 The #TalkingHedge dives into Benzinga’s article...
https://youtu.be/28V-HMeY4bw