Entrepreneurs and companies are likely feeling weary after what has proved to be a particularly challenging year for the cannabis industry.
Legalization continues to expand, and yet an unprecedented string of events directly impacting cannabis businesses this year presented remarkable new difficulties for the nascent legal industry. As the East Coast appears poised to become the next multi-billion dollar frontier in the U.S. cannabis market, tapping into the resiliency that has guided the cannabis industry since the days of the underground is more crucial than ever. In this post, we explore how the industry was tested while also celebrating the incredible progress made in 2019.
2019: One for The History Books
One of the industry’s biggest setbacks this year stemmed from the vaping crisis. Since June there have been over 2000 reported cases, including more than 40 deaths, attributed to e-cigarette, or vaping, product use associated lung injury, (EVALI). Over the course of investigating the outbreak, health officials identified illicit THC cartridges and Vitamin E acetate as both playing a role in the crisis – leading to an FDA warning for consumers to stop using all THC-containing vaping products, and to Massachusetts banning vaping products altogether in September.
While companies were left reeling from EVALI, mass layoffs from multiple established brands – placed greater attention on the industry’s vulnerabilities beneath the aggressive valuations and revenue forecasts. From companies trying to manage heavy tax burdens and consumer preference for the illicit market, to legal disputes and disappointing stock earnings for some of the industry’s biggest players, such hurdles shed light on the industry’s growing pains as it works towards achieving footing on solid ground.
But this year also saw significant progress.
The House of Representatives passed the SAFE Banking Act in September, which, if passed in the Senate and signed by the President, means banks will no longer be punished for working with legal cannabis- and hemp-related businesses. Additionally, small businesses will finally gain access to traditional lending offered by financial service providers.
Conversations on the EVALI issue emphasized the need for Federal legalization, and this week, the House Judiciary Community reviewed and voted on the bipartisan Marijuana Opportunity, Reinvestment, and Expungement (MORE) Act. If ultimately passed, the MORE Act – the most comprehensive cannabis legislation ever introduced into Congress – will remove marijuana from the list of federal controlled substances, decriminalizing the plant and allowing states to set their own policies.
And despite the vape crisis, industry layoffs, and discouraging sales numbers, the cannabis industry is still experiencing record job growth, with employment opportunities increasing 79% from 2018.
Hear more from the experts on the industry’s highs and lows during the educational session, “The Beauty and the Beast of Resilience,” at the National Cannabis Industry Association’s upcoming Northeast Cannabis Business Conference. Formerly the Seed to Sale Show, #NECannaBizCon is the only true B2B cannabis trade show focused on the East Coast. Broaden your network, explore emerging business opportunities, and discover the latest insights impacting the burgeoning Northeast industry. Join NCIA members, entrepreneurs, policymakers, industry leaders, and services providers on 40,000 square feet of expo floor when it all happens February 19-20, 2020 at Boston’s Hynes Convention Center – Registration is now open!