The polls say it all.
A whopping 68% of Americans support the legalization of marijuana and 91% support its medical use.
As 2021 unfolds and new legislation that falls in line with the demands of the American people is put into place, a promising future for the marijuana industry lies just over the horizon.
This also means that the need for marijuana financing and banking is only increasing. What do the current cannabis industry changes mean for your business?
Increasing Availability of Cannabis Real Estate
The future looks green. In states where cannabis is legal, landlords are enjoying strong tenants and an increase in demand for commercial properties.
Trends from 2019 show that states that have legalized marijuana for medical and recreational use for over three years have seen an economic boom in the cannabis real estate sector.
These increases in demand included:
- 42% for warehouses
- 27% for storefronts, particularly for cannabis businesses
- 32% saw commercial lease addendums addressing this growth
- 30% saw lease addendums taking sales of marijuana into consideration
Neighborhoods in both Colorado and Washington saw a 7% increase in home appreciation after dispensaries opened.
This could lead to an ongoing trend as Biden’s policies on marijuana legalization across the country take flight. Real estate markets in states that are fully legalized attract homebuyers. This results in:
- Strengthened labor force
- Increased property sales
- Need for homes
- Higher rents
However, the future isn’t certain. The positive effects of demand for cannabis real estate might taper off once neighboring states legalize marijuana for recreational use. As of now, your cannabis business may experience easier access to real estate and increased profits as cannabis enthusiasts flock to your state.
As state after state moves to legalize recreational marijuana use, this will have an impact on pricing. You can expect changes in:
- The price of marijuana itself
- The cost and availability of equipment
- Increase in new legal growers
One challenge for new legal marijuana producers will be offering their cannabis supply at a cheaper rate than most black market dealers. They’ll also be facing increased competition from other new producers.
Luckily, grow costs will be significantly less for legal producers as the variety of tools available expands. The availability of the cannabis equipment needed is becoming more streamlined. This will cause an increase in demand for customers by default. No fear of arrest means a higher chance of buying.
Accessible Cannabis Financing
Cannabis financing is a powerful tool post-legalization because it helps cannabis businesses avoid taking unnecessary financial hits. Many financial institutions now have the ability to provide marijuana distributors incentives to grow their business, while many now can, most are still not…. But Sweet Leaf is!
The California Assembly Bill 1525 has proven this. Let’s take a look at how it works:
- It legally affirms banks that they are not committing a crime by serving cannabis clients. All cannabis-related penalties are removed
- Cannabis entities can now be assessed for loans without legal ramifications
This bill allows licensed cannabis businesses to sign a waiver that permits state and local licensing with financial institutions in-state.
The only issue that both financial businesses and cannabis businesses may run into is hefty banking fees and other annoying cannabis financing barriers.
If you’re interested in acquiring financing for your cannabis business, get in touch with our team.
What Are Some Additional Legislation Changes?
Lawmakers are making headway in 2021. They’ve introduced dozens of bills to push toward legalization of marijuana.
Policies are becoming more humane, taking into account how marijuana legalization can positively impact decriminalization policies and improve the social economy. New decriminalization bills are in four states:
- South Carolina
As of now, 31 states have decriminalized the possession of marijuana.
Want to Know More?
Cannabis industry changes are happening swiftly and for the better. Legalizing marijuana and marijuana financing isn’t just good for the economy. It’s the smart choice and the moral choice.
If you’d like to know more about the future of the cannabis industry, contact us! We’d love to keep you up to date and help you and your cannabis business grow.