Why Are So Many Cannabis Businesses Losing Money Hand Over Fist?

By Terry Hacienda, The Fresh Toast on

Published in Cannabis Daily

Well, the hard truth is that while cannabis businesses surely can bring in the dough, it won’t be easy. Cannabis products are notoriously expensive to do, as well as maintain, no matter what part of the process you’re in: growing, processing, producing, or selling products. It will easily require hundreds of thousands of dollars, to as much as millions of dollars just to pay for the initial licenses, equipment, security, compliance fees, and property to name a few.

Not to mention taxes. In states where cannabis is legal, cannabis products have high taxes. For example, in Washington, cannabis products are subject to 37% excise taxes. And on top of that, since the marijuana industry is still illegal in the eyes of the federal government, you won’t be able to apply for any tax breaks or tax write-offs.

And because it’s still federally illegal, it’s also challenging and near impossible to get a loan from the bank. If you can handle not having the support of financial institutions, and have a lot of capital on your own, then you can perhaps make it work.

Any cannabis business owner, big or small, can also tell you that it’s near impossible to open a bank account. You’d have to think about where you can keep your money, which has also become a huge security issue for cannabis businesses. You can’t just hide it all under your bed. Then how are you going to ensure that it’s not going to get stolen, monitor your income and expenses, and ensure your suppliers are paid?

It’s a tough world for the finances of any cannabis business owner, that’s for sure.


The cash issue brings about security problems too, which is why marijuana businesses are prone to high theft and robbery rates. Operating solely on cash means that these specific businesses are a big target among thieves. Conclusion At the end of the day, no matter how tough it is in the industry — you could have lots of capital, an excellent business plan, and consumers that can’t wait to get their hands on your product — you still have to comply with the current rules. And despite all the hardships that come with being in the cannabis business, it hasn’t stopped many from starting their own with the hopes that one day soon, cannabis will finally be legal in the federal government.

This article originally appeared on and has been reposted with permission.

The Fresh Toast is a daily lifestyle platform with a side of cannabis. For more information, visit

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