1 Major Problem for the Cannabis Industry
Summary by: David Eyler
CED Clinic Intern
A Global pandemic is an obvious dilemma every company is facing around the world today. Unfortunately for the cannabis industry, this is not the only problem. As a whole, these companies are having trouble creating a positive cash flow for their company. This problem has only been enhanced due to a majority of cannabis related stocks losing upwards of 70% of stocks over the course of a year. This leaves companies with only one realistic option: get a loan or line of credit from a bank. Obviously this is not an ideal proposition given the global economic situation many individuals will be facing in the future.
Unfortunately, there aren’t many other options for these companies. Most investors have no desire to invest in something that has no money, nor does not have the economic capability to pay them back over a certain amount of time. Given the additional variable of economic uncertainty, many potential investors that may have been interested a month ago will not take such a financial risk. As companies try to get through uncertain times, the cannabis industry will attempt to keep themselves financially afloat.