Over 40% of Canna-Businesses Are Planning to Expand Into New Markets, According to Survey
Businesses providing ancillary services to the cannabis industry reported the biggest plans for growth.
Published on October 17, 2017

Lead image via Wikimedia Creative Commons

The cannabis industry is one of the fastest-growing new markets in the country, and while hundreds of start-ups scramble to get in on the green rush, many existing canna-businesses are also looking to expand their market share. A recent online survey conducted by Marijuana Business Daily found that 42% of current canna-businesses are hoping to break into new markets within the next year. The majority of businesses who are planning to expand have their sights set on both the recreational and medical markets.

The biggest plans for expansion were reported by businesses involved in the ancillary sector of cannabis sales. These businesses do not handle the cannabis plant directly, but provide services and equipment to companies that do, which means that they face fewer regulations and restrictions than companies that touch the federally-prohibited cannabis plant.

Over half of the ancillary business owners who responded to the survey reported that they hope to expand into an average of eight new markets each. For businesses looking to enter the recreational sector, California and Nevada were the most popular states for these new potential ventures. For ancillary businesses considering entering the medical marijuana market, Florida and California were the most popular destinations.

The percentage of business owners in the retail and cultivation markets planning to expand into new markets is significantly lower. Because these businesses handle the cannabis plant directly, they face a number of constraints that limit their potential expansion. Licenses to produce or handle cannabis are limited in every canna-legal state, and the difficulties of dealing with local and state regulations and taxes have put a serious damper on the expansion plans of many plant-touching businesses.

Around half of the business owners in the infused product market said they are planning to expand, even though these companies also handle the cannabis plants directly. These businesses have greater flexibility than other plant-touching businesses, because they can enter licensing agreements allowing their products to be made by manufacturers in states where the products can be sold. This makes it easier for these companies to sell their product in multiple states, which is much more difficult for a company that only sells pure cannabis flower.

Chris Moore
Chris Moore is a New York-based writer who has written for Mass Appeal while also mixing records and producing electronic music.
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