Which Are the Various Challenges Affecting the Cannabis Industry in 2023?
The United States will likely face various challenges in its cannabis market. But many companies can safeguard their products and customers and use well-planned risk management schemes to help maintain operations. Because of the unfavorable and applicable labor shortage, regulations, and continuous supply, people running the cannabis business will keep facing difficulties in remaining useful in today’s world. Some of the challenges of cannabis to watch out for include the following:
1.Value
Under the Politico findings, over 30 of the most renowned and publicly traded cannabis companies had fallen in monetary value to about $550 million and had lost up to $4.5 billion in revenue before 2022 was over. As a result of their loss, cannabis companies have experienced inflation, which is expected to continue in 2023.
2. High Taxation and Access to Interstate Commerce
One of the biggest challenges that can affect your cannabis business name is taxation, and this might linger on in 2023. High taxes cause hindrances to eCommerce operations within the state. As the problem continually affects the cannabis industry, investors and lenders are threatening to withdraw if there are no blueprints for crystal-clear proof about the safety of their investment and the possibility of their profits. In addition, people more interested in raising new capital must demonstrate to investors how their businesses will grow and yield more profits through risk management practices that will help them withstand losses.
3. Higher Product Costs and Management
The cost of production includes building materials, product packaging, and fertilizer costs. When rising inflation meets higher issues in product management, the cannabis industry carries a burden they might not have solved so quickly in the past year. However, the cannabis industry will proceed with caution to raise its value.
Even though these problems will likely persist into the current year, the industry will not stop looking for ways to get back on the fast growth track through multiple opportunities for improved insurance accessibility. Through insurance developments, cannabis companies can expect favorable outcomes in the future.
How Can the Cannabis Industry Prepare for Potential Issues?
1. By prioritizing strategies to manage risk
Since cannabis facilities fall into a series of hazards within the company’s systems and integration, they must be equipped to grow unusual cannabis plants, including discharge lighting, severe radiance intensity, extracting butane from oil, and chemical exposure.
To insure a property, one of the conditions is that inspections will determine everything. Your insurance company will assign an underwriter to look at the property’s equipment, the regular productions, and the systems used to suppress fire hazards in the system. Your property regulations might not guarantee external buildings for those cultivating cannabis near destructive zones like wildfire or hurricane areas.
Many more operators are excluding or curtailing insurance coverages due to the incidence of significant natural disasters. Sometimes, insurance does not cover the loss of cannabis crops if a catastrophe suddenly strikes. If there is a need to look into such disasters, they are usually expensive to manage.
Therefore, cannabis companies are temporarily bracing themselves for all risk strategies by using resolution policies to cover insurance gaps and taking new strategies to address them. They do this by adding insurance policies because they can be at risk of losses through internet setups.
2. Pay Attention to Current Risks
Some products can cause more problems in the cannabis market when introduced—for example, new products like CBD-containing baking staples and THC-infused sugarless cannabis tarts or beverages. There is a need to conduct proper research on these products before they are produced, packaged, and stored for consumer distribution. Also, most new cannabis products require correct bottling and refrigeration, as they can complicate distribution.
The continuous manufacturing of new cannabis beverages and edibles has also led many companies to develop unique strengths, formulas, and products. However, every new production involves risk factors. For instance, the US reported the outcome of marijuana edibles, including contaminants from mold, salmonella, and poor labeling. The problems usually necessitate filing a lawsuit by the complainant’s lawyer to assert a consumer’s legal rights. They can demand injury rights from contaminated or incorrectly labeled products.
3. Invest in Employee Training
Cannabis companies will continue to have an influx of turnovers and will not stop in 2023. Between 2021 and 2022, the number of jobs in the cannabis industry increased by 33%, necessitating the hiring of more skilled workers. Therefore, operators use additional money and time to search for new employees they would love to retain in the long run.
However, cannabis companies can invest in programs that can benefit the existing workforce to enhance skills and experiences rather than train new individuals from scratch. If a company still needs more hands, they can add attractive packages like health insurance and higher wages to create a more comfortable working environment that helps retain workers.
4. Be Ready Ahead of Product Recall
The unusual thing about a company facing a product recall is that it can be too expensive. Your defense priority is your procedures and internal guidelines, which include a formal evaluation of your affiliates and suppliers. Think about the product and general responsibilities you must cover for your purchases, and make sure your sales mediator gives you a breakdown of your coverage difference.
5. Create a Company Recovery Policy
It would be best to build resilience to have coverage in specific areas of your cannabis industry. Set up structures that will help you protect your workforce, create directories for executives and officials, and prevent cyberattacks, office liability demands, and interruptions to your cannabis business. Let your sales mediator help you pinpoint the correct principles for your business.
Conclusion
Even though there is a rise in problems in the cannabis industry, you can withstand some of these challenges through careful practices. You can hope for the best in the new year as the industry continues its fast-paced growth. You can also take advantage of numerous opportunities to increase your insurance accessibility and develop more skills for various opportunities within your cannabis company.
