Capitalizing on Missed Opportunities: An Overview of Cannabis Fundraising Disparities
Ohio State Legal Studies Research Paper No. 694
Drug Enforcement and Policy Center, No. 46, March 2022
14 Pages Posted: 23 Mar 2022
Date Written: March 21, 2022
Abstract
Demanding state regulatory schemes render the operation of cannabis businesses an expensive endeavor and create an urgent need for reliable sources of cash. Historically, the federal ban on cannabis has hindered the industry’s fundraising efforts, but larger cannabis companies have begun to make inroads toward friendlier deals with manageable interest rates. This progress has not extended to smaller cannabis businesses, which has prevented many from effectively competing and contributed to a wave of intense industry consolidation around the largest companies in 2021. This paper explores this fundraising disparity and its policy implications. Proposed solutions at the state and federal level are also evaluated along with an overview of the limited fundraising options which are currently available to small cannabis businesses.
Keywords: Fundraising, Startup, Banking, Regulation, Capital, Disparity, Marijuana, Cannabis
Suggested Citation: Suggested Citation