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Today’s progressive investors must contend with 3 major business problems facing the cannabis industry which limit the rate of return they can realize from their cannabis portfolios.

 

1. Legal:  Cannabis’ Schedule 1 status complicates interstate commerce, creates numerous obstacles for banking and prevents cannabis businesses from claiming legitimate tax deductions. 

 

2. Market:  The cannabis arena demonstrates all the classic characteristics of a mature technology market, including increasing consolidation, intensifying competition, and price erosion. 

 

3. Investment: Cannabis VCs are often simply acting as community banks; providing low-risk/low-yield loans to farms and Main Street businesses.