Top Cannabis Industry Challenges

  • By Nicholas Garcia
    • Oct 17, 2023
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Cannabis industry

Despite popular belief, the cannabis industry is not an easy industry to be in. Since cannabis was legalized in Canada in 2019, entrepreneurs who have ventured into this new frontier have faced significant challenges which threaten to undermine the economic feasibility of their operations. High operating costs, stringent government regulation and strong market pressure have all been obstacles for cannabis production companies, but a focus on technological innovation holds the promise to help mitigate the impacts of these factors and pave the way to profitability.

Legalization of cannabis has led to the creation of a unique economic climate for this industry, and the fact that it existed so long as a black market commodity implies that it is much more difficult for legitimate entrepreneurs to flourish in this space. Notably, the regulations imposed on legal producers imply higher operating costs when compared to the black market,  and while these regulations exist to ensure the safety and quality of the produced cannabis, black market suppliers still hold a significant share of the market. In addition to this, high demand for cheap and potent product leads to thin profit margins for producers, creating further financial pressures for producers.

Hope for the Cannabis Industry

All is not lost however! Technological and scientific development in all fields related to cannabis cultivation hold the promise of a better future for producers. Through the development of new and improved cultivation techniques, producers aim to make their operations more energy efficient while improving their yields and the quality of their product. And, developments in a variety of scientific fields are leading to a deeper understanding of the plant itself as well as all aspects of the cultivation process.

These scientific developments are actually the major competitive advantage of the legal industry, as this type of work is not typically undertaken in the black market, but it holds the potential to resolve major issues which plague the industry such as the degradation of genetic sources through repeated cloning or the vulnerability of cannabis plants to pests and pathogens. While much of this work is still in its infancy, it represents a path towards a better future for cannabis producers.

It is also worth noting that the work undertaken within the cannabis industry for indoor cultivation could have impacts which extend far beyond the industry itself, as the reduction of costs associated with improved indoor cultivation technology could completely change the farming and agriculture industries and lead to an increase in decentralized and local production, reducing transport costs and associated carbon footprints.

Furthermore, companies that are innovating technologies in the cannabis industry are likely to be eligible for several funding programs including government grants, and SR&ED.

Want to learn about funding opportunities for your project? Schedule a free consultation with one of our experts today!


Nicholas Garcia
Nicholas Garcia

Senior Consulting Manager - SR&ED Manufacturing

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