The challenges facing the “little guy” will only get tougher.

Despite some states, notably New York, passing laws that mandate inclusion of minorities and women, business will not be easy for small cannabis entrepreneurs, and it is about to get a lot tougher.  Several developments on the horizon signal that this is about to become a game for sophisticated players:

              -The legal landscape is evolving on a number of fronts: medical vs. recreational; range of products available; local NIMBY laws.  It is and will continue to be expensive to keep up with changing legal requirements.

              -With the passage of HR 1996 in the House (The Safe Banking Act of 2021), commercial banks are sure to enter the industry, not just as deposit takers and operators of ATMs, but in making business loans to dispensaries, growers, laboratories and players all along the value chain.  Those unable to meet the many requirements of the banks, e.g. high quality business and legal analyses, risk being left behind.  Access to the best professional knowledge is expensive, and the billion-dollar players will have an advantage here.

              -Tax issues are evolving as well. As described in Marijuana Business Daily (@MJBizDaily), section 280E of the IRS code relates to the ability to deduct certain expenses for businesses selling federally controlled substances.  MAGA believes those businesses with access to quality professional advice will have a financial advantage.

              -Development of sophisticated business strategies in the face of increasing competition will also require financial resources, which are harder to come by for entrepreneurial-scale companies.

The point is, if only those who can afford top professionals have access to quality data, the deck is already stacked against the little guy.

What will the Mid Atlantic Growers Association do about all of this?

Specifically, once properly capitalized, the Mid Atlantic Growers Association will commission best in class business and legal consulting analyses and, with the proper disclosures, make this information freely available to members and in some cases, the public.  This will allow small, newer cannabis businesses to compete effectively against more established players for funding, talent and market share.

Our capitalization strategy will focus on the sale of logo merchandise through the Catalog section of this  website.  In this way, we will raise funds without being beholden to any particular members, e.g. large corporate donors.  Over time, we will introduce additional items in our catalog, devoting a percentage of revenues to obtaining and distributing the professional advice mentioned above.

Please watch this blog (bookmark it!) in the coming weeks and months as we address these and other issues.

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