We’ve all seen it. Converted ambulances or ice cream trucks on city streets with big Cannabis signs, shopping menus, and pricing on pre-rolls, 1g, 3.5g, and more; for all to see. Or the CBD shops masquerading behind the scenes as a Cannabis dispensary; to the street dealers setting up booths out in the open. With legalization in places like New York City and others, “legal Cannabis” has turned into a bit of the “Wild Wild West”. Or hear a news story of a shop selling Cannabis illegally to underage patrons. It is a fair question, “Is the grey market killing the Cannabis industry’s credibility?”
Grey Market Sales put a Stain on the Entire Industry
Cannabis merchant service provider
When we read stories of Cannabis paraphernalia shops or CBD stores selling Cannabis without a license to anyone who wants it, it is bad for the entire industry. Legal recreational Cannabis is supposed to be legal on both the buyer and seller sides. Just because Cannabis is “legal” doesn’t mean anyone can buy or sell it. It is supposed to be regulated and taxed just like alcohol or tobacco. If you are operating a CBD or Cannabis related shop and are selling flower or other THC-containing products without a proper license to do so, you could be in for some serious legal consequences.
Local and state governments in Canada and the USA are beginning to crack down on these illegal grey market sales. This is good news for the industry as a whole. What Cannabis retailers need to know is that they can apply for and receive licenses and turn their operation from the grey market into a legal business. That was and is the idea with legalization legislation in both Canada and the USA. Remove the criminality and make Cannabis a safe space for patients and recreational users. What we are seeing now is doing nothing more than damaging the entire industry and putting into question the future legal status of the space as a whole.
Avoiding Taxes and Selling Illegally is Still Illegal
What Cannabis businesses operating in the grey market don’t realize is that they can destroy their business overnight with sales that are not authorized, taxed, or legal. We need to work within the legal framework of legalization, or we may face a time moving backward towards Cannabis illegality once again. Is that what we want? To grow our legal industry to have it revoked because too many businesses laugh in the face of authority? Fines and legal fees abound for those sellers in the grey market who get caught. Considering the crackdowns of late, it is not “if” you will be caught but “when”.
The thing is, getting the proper licensing, banking system in place, and taxation is not difficult. They are even easy to do if you know where to look. Working with a dedicated Cannabis merchant service provider who will help you receive your license and set up proper taxation with credit and debit card sales is commonplace for the dispensaries who plan to stick around for a while. Trying to cut corners for some quick cash sales may seem nice for now, but when you face a police raid, legal fees, and operational shutdowns that far exceed any sales profits, you’d wish you had done things differently.
Understanding the Cannabis Industry in 2024
Legalization in Canada and more and more states in the USA following suit means all eyes are on Cannabis businesses. Questions around the space are abundant: Will they abide by local and national laws? Is the grey market too prevalent? Where and how can I buy flower? Whether we’re talking about Cannabis producers, processors, or consumers; people have questions, and the industry is talking.
But what people are hearing is not only tarring the name of legitimate cannabis retailers but is making lawmakers think twice about signing things into law when there is such poor governance and accountability. We need to step up and make the industry a better place for all. If we do not nurture the gift that we have in our hands it will likely disappear before it is too late.
Run a Cannabis or CBD Dispensary?
If you are operating in the grey market today, you should immediately pull the rip cord on that operation. With just a minute or two online or a quick phone call, you can be discussing converting your business into a 100% legal one in no time. But who do you talk to? Is there a dedicated Cannabis merchant service provider who can help you navigate the common pitfalls of the Cannabis industry in 2022 and 2023?
The answer is yes, but you need to know where to look. It is up to you to make the most of the gift of legalization and work within the legal framework to ensure your business can stand the test of time. When others fail, you will prevail.
BrotherProcessing.com is a leading Cannabis & CBD merchant service provider out of Montreal, Canada, and works with businesses across the USA and Canada. They have partnered with local and regional banks for more than 5 years to ensure every client is compliant and able to operate without any question of legality. Give them a call today and get set up with proper credit and debit card processing, and cash management systems, to make your Cannabis business legal for the modern era today.
