The Cannabis Industry Market: Ethics and global coverage

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Ethical issues around the emerging cannabis industry

Even as the emerging cannabis industry continues to grow at an unprecedented rate, the cannabis market remains a highly complicated industry for cannabis organizations and investors. In most parts of the country, cannabis is still illegal, while a surging number of states have opted for local legalization decisions. A significant dilemma in running a cannabis enterprise is that it is illegal under the Federal Controlled Substance Act to sell marijuana (Gregorio, 2014). The federal regulations surrounding the cannabis industry conflict with the local state laws which permit the sale of marijuana for medical and recreation use. The federal law prohibits organizations from supporting any illegal activity or knowingly accepting funds derived from illegal activities. Financial organizations like banks, insurance companies, tax firms, and accounting companies are, therefore, wary of cannabis enterprises to fear going against federal laws. Most banks do not offer banking services to marijuana businesses due to the government policies in the Controlled Substance Act and the anti-money laundering regulations. Consequently, cannabis enterprises are forced to handle vast amounts of cash, thereby demanding the need to address the risk of theft, fraud, and internal quality controls.

In addition to restricting government policies around the cannabis industry, cannabis enterprises are faced with a skeptical attitude of society on the use of marijuana. A huge number of people believe that cannabis use undermines an individual’s rational capacities. While there is numerous medical use of cannabis products, many people have an ingrained negative attitude to the recreational use of cannabis. The popular belief around recreational marijuana use is that it will lead to addiction, increased crime levels, and trigger mental health conditions with a potential defect over long-term use. We have yet to get a conclusive statement over the effects of long-term cannabis use on a person. While there is no proof of any advance effects arising from the continuous use of cannabis products, the society has not yet embraced and normalized medicinal and recreational use of cannabis (Sagy, Sagy, Barski, Zeller, & Jotkowitz, 2018). Cannabis businesses and investors alike face uncertainty over the acceptance of cannabis enterprises to their target customers.

There is a pressing need for the cannabis industry to step up their pursuits in establishing ethical standards for self-regulation and responsible behaviors. It would widely legitimize the commercial sale of cannabis products while relieving some of the anxiety arising from the suspected harmful societal effects of cannabis consumption. As Aaron (2018) suggested, consumers, tend to seek the same standards in their cannabis products as in their food products. Following the Cannabis Certification Council (2020), consumer education is necessary when drawing parallels between the buying choices of food and cannabis products (Shapiro, 2020). Advertisement and informative programs that aim to provoke the consumer in questioning about the ethical and environmental sustainability of their cannabis products can be useful. Such a campaign will profit the upcoming cannabis companies that produce ethical and sustainable cannabis products. In this way, consumers are alerted about their products’ quality while producers are rewarded for their high quality and integrity products. As a result, the transparency in the cannabis industry is increased, which in turn drives demand.

To counter the unfavorable government policies that inhibit a seamless operation of the cannabis industry, congress and other regulatory agencies should be pressured to provide more legal clarity to the production and distribution of marijuana. Proposals made to both the Senate and the House are a solid starting point for deliberations. Discrepancies between state and federal medicinal marijuana laws complicates the operations of cannabis enterprises. Government regulations around the cannabis industry downplay the values of individuality, autonomy, and personal rights. Pushing for a clear interpretation of cannabis regulations can prove useful both to the local and the federal governments (Focus, 2019). Suggestions are made to the government to legalize and decriminalize production and distribution of marijuana and instead employ excise taxes to cannabis enterprises. It is estimated that revenues arising from cannabis excise tax can reach up to $10 billion annually (ABA, 2020). While many government organizations are facing dire budgetary challenges, innovative solutions presented by the cannabis industry can be a viable option for the government. In addition, support industries like banking, insurance, and inventory services who were wary of the cannabis industry are likely to join and streamline business processes.

The Global Cannabis Industry Distribution.

There is a growing trend of the establishment of cannabis enterprises all across the world. According to Forbes, the global cannabis market is estimated reported to grow by 38% in sales to hit an unsurmountable revenue of $19.7 billion in 2020 (Dorban, 2019). The skyrocketing growth of the global cannabis market is pegged on the legalization of the production and distribution of cannabis for medicinal and recreational use in several countries of the world. Spending on legal cannabis is expected to surpass a worldwide mark of $57 billion. The recreation market forms the lion’s share of 67%, while the medicinal market takes up the remaining 33%. There are several factors responsible for the worldwide growth of the cannabis industry.

The preliminary decision of by many states in the USA and Canada to introduce medical-only cannabis policies and regulations prompted other countries to act correspondingly. Further legalization of recreational use of cannabis for adults in the USA and Canada triggered a second wave where other countries internationally considered easing the rules and regulations around the production and distribution of cannabis.  In South America, countries like Brazil, Peru, Uruguay, and Argentina introduced liberal medical cannabis programs. In the European cannabis market, Germany and Italy are leading the cannabis industry since they were the first European countries to legalize cannabis operations (Torgerson, Roberts, Lester, Khojasteh, & Vassar, 2020). At the moment, cannabis is legal in 22 countries across Europe. On the other hand, Australia had remained uptight on cannabis regulations until recently when Australia’s citizens voted for the legalization of cannabis in the country.

The cannabis market is not, however, well defined in Africa.  African governments have not yet cozied up to the legalization of marijuana, as seen in other parts of the world. Lesotho is Africa’s first country to offer legal licenses for growing and distributing marijuana. The nation has also signed several trade agreements that allow the unencumbered export of cannabis products to some of their trading partners worldwide. In September 2018, South Africa joined the bandwagon after their constitutional court unanimously voted to legalize adult consumption of cannabis. The parliament of South Africa is expected to amend the laws to decriminalize cannabis following the constitutional courts’ ruling.

In a popular upcoming trend of the cannabis market, cannabis edibles have proven to be popular worldwide. Cannabis edible products include various product types varying from cannabis infused beverages, brownies, gummy bears, and mints. Most countries where recreational cannabis is legal to allow a certain amount of THC in cannabis infused products. In a report made by Arcview Market Research, the consumer spending on cannabis edibles and concentrates is set to hit $3 billion and $8 billion, respectively (Arcview Market Research, 2018). The cannabis edibles and infused products market is projected to grow from 37% to 50% from 2017 to 2022. Leading cannabis enterprises are already exploiting the cannabis edibles and concentrate niche all across the world.

References

ABA. (2020, January 12). Cannabis Banking: Bridging the Gap between State and Federal Law. Retrieved from American Bankers Association: https://www.aba.com/advocacy/our-issues/cannabis

Arcview Market Research. (2018, December 10). The Tasty Future of Cannabis Edibles. Retrieved from Arcview: https://arcviewgroup.com/product/edibles/

Biros, A. (2018). What is in My Weed Campaign? Cannabis Industry Journal, 1-4.

Dorban, I. (2019, September 24). New Cannabis Report Predicts Legal Sales To Reach Nearly $30 Billion By 2025. Forbes, pp. 21-25.

Focus. (2019, May 12). U.S. Government Position on Cannabis/Marijuana. Retrieved from Foundation of Cannabis Unified Standards: https://www.focusstandards.org/us-govt-position-cannabis/

Gregorio, J. (2014). Physicians, Medical Marijuana, and the Law. AMA Journal of Ethics, 732-738.

Sagy, I., Sagy, P., Barski, L., Zeller, L., & Jotkowitz, A. (2018). Ethical issues in medical cannabis use. European Journal of Internal Medicine, 20-22.

Shapiro, K. (2020, February 3). A Certified Organic Labeling Program Is Coming To Cannabis In 2020. Forbes, pp. 12-14.

Torgerson, T., Roberts, W., Lester, D., Khojasteh, J., & Vassar, M. (2020). Public interest in cannabis during election season: a Google Trends analysis. Journal of Cannabis Research, 31-33.