The cannabis industry can yield huge returns on investment for business owners, and that’s an attractive fact for investors. However, there’s certainly a balance between risk and reward when it comes to investing in marijuana retail.
As we mentioned in a previous article, there’s still the looming possibility that the federal government will enforce law that flies in the face of local cannabis legalization. The DEA can raid and shut the doors of recreational cannabis retailers. However – with the continuing approval for recreational cannabis retail from the voting public, the passing of state legislation, the growth of tax funding from cannabis sales, and a lack of funding for DEA action against recreational cannabis businesses – things look good for cannabis industry professionals. It appears that recreational cannabis retail isn’t just a fad; it’s a growing trend, and it’s likely to stay legal and active here in Colorado.
So, as is true with most growing trends and booming industries, investors’ interests are piqued. There may be no better time than the present to build a business in the cannabis industry, and no better time to make an investment in a cannabis business.
That said, investors should, rightfully, seek out businesses that are fully compliant with state laws. And business owners should take steps to ensure that they maintain their compliance. Why? Being non-compliant is illegal, unnecessary, and an avoidable risk. Businesses caught breaking regulations can expect a major loss of profits for both the business owner and investors who’ve poured funding into a non-compliant business. These businesses may also lose their licensing, if the fees, fines, and bad press aren’t enough. In short, compliance is crucial for cannabis businesses. Let’s take a closer look at why investors are wise to seek out businesses that are compliant with cannabis legislature. And let’s assess why it’s smart for businesses to actively maintain compliance to attract investors.
Compliance Builds Trust
If you’re a business owner, it’s in your best interest to stay active in monitoring your business to ensure it’s consistently compliant. Regulations change on the fly in the cannabis industry, so it’s crucial to monitor the shifting rules surrounding cannabis growing, utilization, and sales. When a business owner provides documentation that they actively assess the compliance of their operations, an investor can rest assured that their investment is sound. The business is above board. Risk is minimized.
Knowledge Is Power
Compliance maintenance boosts the appeal of a cannabis business. If you’re a cannabis business owner. It’s worthwhile to invest time and effort (and possibly some cash) into ensuring that your business is compliant with current regulations. Establishing and documenting your business as compliant adds great value to your business. And investors like value.
Think about it this way: Pretend you’re an investor. You’re scouring the market for opportunities, and you’ve narrowed your search to two businesses – let’s call them Cannabiz A and Cannabiz B. Now, both businesses are yielding some excellent profits, and Cannabiz A is pulling in one percent more profit than Cannabiz B. However, Cannabiz B has always invested one percent of their revenue in cannabis compliance and documentation services. Good on you Cannabiz B. Which business is more attractive? Cannabiz A may earn you a better return on investment up front, but Cannabiz B is safer. If Cannabiz A breaks compliance, you may lose part of your investment; so in the long run, Cannabiz B may earn a better ROI.
Back Yourself With a Cannabis Industry Consultant
So, how exactly do you ensure that your business is compliant with the latest cannabis codes and regulations? Well, that’s exactly why we’re here. Evolutionz provides compliance consulting services for businesses in the cannabis industry (excuse the shameless sales plug!). If you find that you’re uncertain about the law, or that you’re overwhelmed by the constant shifts in legislation and regulation, we can help. Compliance consultation is a beneficial service for cannabis business owners and investors alike. If you’re a business owner, a compliance consultant ensures that your business operations are above board. You’ll protect your operations, assets, and employees. If you’re an investor, compliance consultation protects your investment. Our team can assess the compliance of a prospective investment; or, if you have a current investment, we can continually monitor the operations of your vested company.
Who Is Investing in Cannabiz?
So who’s pouring funding into cannabiz? At the moment, aggressive, smart, legal savvy investors tend to be riding the bullish cannabis cash cow. Cannabis industry businesses hold the potential to yield big returns for modest investments. That’s a smart move for investors. However, there’s the obvious caveat that we’ve mentioned before: Cannabis industry business investing comes with inherent risk, especially since state legalization is quite new in the grand scheme of things. Smart investors invest in safe, compliant cannabis businesses.
A Bit About Our Compliance Services
Here at Evolutionz, we provide a variety of services for cannabis industry professionals, including compliance consultation. We protect cannabis industry business (and their investors) by monitoring business operations, informing owners and investors of changes in regulations, and documenting business procedures properly. If you’re concerned about compliance, take a moment to sign up for our compliance notification newsletter, and learn more about our compliance assessment services. Partner with Evolutionz to ensure that your business is compliant, and your investment is protected.