Market Pains
Challenges of the Cannabis Market: An Overview
Last updated
Challenges of the Cannabis Market: An Overview
Last updated
The global cannabis market, despite its rapid growth, faces a series of complex challenges that limit its full development.
These issues are particularly evident in emerging markets like Brazil, where regulatory and cultural barriers create significant obstacles to the adoption and acceptance of the plant.
In this chapter, we will explore the main challenges faced by the sector.
Traceability is one of the pillars to ensure the safety and quality of cannabis products. The ability to monitor the production chain, from cultivation to the final product, is crucial to ensuring compliance with regulations and preventing contamination or counterfeiting.
However, many producers, especially smaller ones, struggle to implement effective tracking systems. This is exacerbated by the lack of technological infrastructure and the inconsistency in regulations, which vary widely between different regions.
The absence of traceability undermines transparency and fuels distrust, both among consumers and regulators. Without the necessary trust, the legal cannabis market struggles to compete with the illicit market, which continues to thrive.
Given the dominance of drug trafficking over the global cannabis trade, this challenge becomes even more pronounced.
The historical prohibition of cannabis has resulted in a robust illegal market that continues to operate despite legalization initiatives. Even with the expansion of the legal market, the transition to a regulated environment is slow and faces resistance from established groups that profit from illegal sales. This dominance perpetuates a cycle of violence and corruption, hindering the entry of legitimate companies into the sector.
Furthermore, the presence of the illegal market undermines efforts to establish a regulated and safe market by offering cheaper and more easily accessible products, albeit with questionable quality and safety.
Historically, the plant has been viewed through a lens of prejudice, associated with illegal recreational use and marginalized subcultures. This stigma is fueled by decades of prohibitionist policies and the lack of public education about the therapeutic and industrial benefits of cannabis.
As a result, many consumers, investors, and even policymakers remain reluctant to support the expansion of the cannabis market. This prejudice hampers the adoption of progressive legalization and regulation policies, which, in turn, limits consumer access to safe and regulated products.
Cannabis can be seen as a life-saving medicine that can improve a country's economy or as a popular drug associated with organized crime.
The cultural stigma directly affects the public perception of the market, negatively influencing the growth and acceptance of cannabis as a legitimate product.
In addition to these main challenges, there are other significant barriers that the cannabis market faces. Inconsistent or non-existent regulation in various parts of the world creates an environment of uncertainty for producers and investors. Regulatory policies vary widely, with some regions adopting strict frameworks and others operating in a legal vacuum.
UNODC - World Drug Report 2021: www.unodc.org/unodc/en/data-and-analysis/wdr2021.html
The Guardian - California's Cannabis Market Struggles: www.theguardian.com/us-news/2021/nov/01/california-weed-cannabis-legalization-illegal-market
BBC News - Uruguay's Cannabis Legalization: www.bbc.com/news/world-latin-america-40282882
