Financial Roadblocks In Cannabis: What's Hindering Growth And How To Fix It According To Experts

As the cannabis industry continues to grow, a roadblock keeps holding it back — access to traditional banking and capital markets. That’s according to William Muecke, a co-founding managing member of Artemis Growth Partners and upcoming speaker at the Benzinga Cannabis Capital Conference. Despite the increasing demand and the industry’s robust growth projections, many cannabis companies struggle to thrive due to financial constraints.

Safe Banking and Capital Access: The Missing Links

Muecke emphasized that the core issue for cannabis companies isn't demand but rather the lack of access to institutional capital. "The biggest issue for valuation and for companies to be repriced multiple times is the involvement of institutional capital," he said.

See Also: Nvidia Analysts Say Pullback Is Buying Opportunity: ‘Pushing AI Envelope Too Significant To Slow Down’

Without access to traditional banking and capital markets, many companies are left financially vulnerable, unable to secure the funding necessary to scale their operations.

The cannabis industry has long-faced financial barriers due to its legal status, leaving many businesses underfunded. Muecke pointed out that while the market is growing, it's bifurcated between companies with adequate funding and those without. "If you’re making money in cannabis, you’re in the world of the haves. If you’re not making money in cannabis, you’re in the world of the have-nots," he noted.

A Need for Regulatory Change

Muecke stressed that allowing institutional investors to participate in the cannabis market is crucial for the industry's long-term success.

"Until we get changes on the regulatory side that allow institutional investors to play in cannabis as they play in any other healthcare or consumer stock, we’re going to get stuck with, you know, a very thin market and a very difficult environment for cannabis companies to read cash," he explained.

Muecke also highlighted the need for safe banking and access to capital markets — both essential for the industry’s growth. “The devil is in the details,” he said, adding that the industry will continue to face financial constraints without these critical regulatory changes.

Want To Learn More?

As the cannabis industry anticipates regulatory shifts, the focus remains on how these changes will impact the financial landscape. While rescheduling cannabis at the federal level could provide some relief, Muecke pointed out that it isn't a complete solution. "Rescheduling really isn’t the cookie. I think it’s more of a symptom that the process is moving forward, rather than a cure or save to the industry," he said.

At the upcoming Benzinga Cannabis Capital Conference, industry leaders will discuss these financial challenges and explore potential solutions. The conference promises to be a platform for meaningful discussions on the future of cannabis finance. Muecke and other experts will provide valuable insights into what lies ahead for the industry.

Now Read:

• US Dollar, Oil Prices, Tech Stocks Rise As GDP Roars By 3% In Q2; Bonds, Yen Slip As Bets For Large Rate Cuts Ease

Photo: Courtesy of SD_FlowerPower via Shutterstock