Despite the current administration’s hostility, the overall trend for the cannabis industry remains positive. States with some form of legalization now outnumber those without it. Bills are being proposed in Congress to legalize marijuana to various extents. Recent press, such as reports that medical marijuana has reduced opioid abuse, remains overwhelmingly positive.
Nonetheless, the industry continues to carry unique risks. No federally-chartered institution accepts deposits derived from marijuana revenue. That leaves the industry with few places to bank, or none in some parts of the state. Landlords (commercial as well as residential) may refuse to lease to tenants who are involved with or use cannabis. Many insurance companies refuse to insure companies involved in the industry. Even title insurance can be difficult to obtain.
But the biggest risk may be the most mundane. The industry may be getting too crowded, too fast. Oversupply has caused prices to drop by 50%, according to some estimates.
And if a cannabis-related business fails? The bankruptcy court system is unavailable. It is federal, and so it cannot aid in liquidating or restructuring any assets associated with cannabis. https://www.justice.gov/ust/frequently-asked-questions-faqs-consumer-information#marijuana_faq1