The money problems of the cannabis industry are collecting – and there is no security net

The cannabis industry stares at a financial crisis and, unlike traditional companies, there is no bankruptcy safety net that can fall back on. Since the debts are piling up and the cash flow runs thinly, many cannabi companies are in a difficult location and have difficulty remaining water and at the same time navigating strict federal regulations.

No bankruptcy protection, no easy way out

One of the biggest problems confronted with cannabis shops is the exclusion from the federal bankruptcy protection. Since wees is still illegal at the federal level, companies cannot register in bankruptcy like a fighting restaurant or a retail chain. Instead, they are looking for alternative solutions, e.g. B. to restructure his debts or the search for a buyer who is ready to take the risk.

A market in the river

The financial problems of the cannabis industry are not only about debt, but also about a market that is not entirely determined. In some states, high taxes and hard competition on the black market have created a challenging environment for legal cannabis operators. In addition, investors who once tried to pour money into the green rush are now withdrawing and leaving companies without the financing they need to survive.

So what's next?

Without access to bankruptcy protection, cannabis companies have to become creative. Some negotiate directly with lenders, while others restructure through state recipients. If the federal laws do not change, the industry will continue to confront financial hurdles that do not apply to traditional companies.

Since more states that legalize cannabis and federal reforms are discussed, there is hope that the industry will finally receive the same financial protection as everyone else. Until then, cannabi companies have to continue to grind out there through one of the toughest financial landscapes.