Four Most Common Challenges Faced By Cannabis Vendors In 2018
The demand for legal marijuana is steadily increasing and even though the cannabis market is currently estimated to be worth several billion dollars, it represents only a fraction of the overall demand. The possibility of such great profits attracts established entrepreneurs who open up dispensaries on a regular basis. However, even though selling cannabis is a lucrative business, business owners have to face numerous challenges while running marijuana business operations.
Here are top 4 challenges faced by cannabis vendors in the year 2018:
Cannabis classification. Even though the marijuana business is booming, currently, under federal law, cannabis is classified as a schedule I drug. The federal government imposes restrictive policies and regulations that make legal cannabis vendors vulnerable to federal investigations, possible prosecutions, and dispensary shutdowns.
Business Operations. Lack of federal support stops other businesses from providing services to cannabis vendors. For example, security companies avoid working with cannabis vendors in order not to loose government contracts, and marketing companies like Mailchimp suspend business accounts based on cannabis classification and business policies.
Taxes. Cannabis business owners have to pay high sales taxes. Colorado imposes a 15% sales tax, while the state of Washington imposes a 37% for the sale of recreational marijuana. In addition, IRS started enforcing a 1970’s law, that blocks tax deductions for marijuana business owner’s expenses. This adds an extra financial burden and reduces profit margins for cannabis business owners.
Banking. Cannabis vendors are not able to secure capital or basic business payment solutions. Marijuana business owners deal with cash and end up spending a lot of time and resources on tracking transactions, account reconciliation, and basic payroll. Fortunately, Merchant Club of America offers exclusive, custom payment solutions, like pin-based debit and credit card solutions, for cannabis vendor.
Contact us today by filling out the form below and get more information about our custom cannabis payment solutions.
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