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Crowdfunding Is Revolutionizing The Cannabis Industry. Here’s Why.

Crowdsourcing investments may be the thing that speeds up the legalization processes in the U.S. and Europe.

The cannabis industry has seen two major upward surges in the last 5 years, the first came with the national legalization of cannabis in Canada which was subsequently followed up by many states in the United States and the second has come during this COVID-19 pandemic.

While this time has been a hard time for the U.S. and all other countries currently impacted by it, cannabis has helped ease anxiety and stress for many people. The consistent affirmation of cannabis businesses as essential services during this era has done wonders for the industry.

The cannabis industry is not just enjoying the upsurge caused by the epidemic, it is also experiencing the proliferation of crowdfunding or crowdsourcing platforms internationally.

Here are 4 reasons why crowdsourcing has been and will continue to be great for the industry.

1. Crowdfunding is rapidly reducing the shortfall in supply

In the U.S. and most of Europe, the demand for cannabis products especially of medical cannabis is still way higher than the supply and the Covid-19 crisis has upped it even more. Even if demand were to fall post-COVID-19 (Which is highly unlikely) there will still be excess demand and a shortfall of supply.

The typical way to tackle this is to grow more cannabis, but not every business green-agribusiness can grow more than their present capacities. The limits on a budget make it quite difficult for some to increase production significantly.

However, crowdsourcing is doing a great job of encouraging cultivators and cannabis producers to make more by giving them access to funds that they would have been unable to raise otherwise. This has already caused a slight increase in production but is predicted to cause a larger shift in the coming months as the world recovers from COVID-19.

2. Crowdsourcing can break monopolies in the growing sectors

Before the dawn of the widespread legalization of cannabis, at the time when growing marijuana was still dubious, to say the least. It was private cannabis growers who braved the consequences and weathered the unlicensed storm. To a large extent, these private growers have been left in the dust since legalization hit and as major agri-businesses swept in and took over the market, building huge monopolies in the sector.

However, the crowdsourcing innovation that has recently taken the industry by storm has given them a fighting chance. It is common knowledge that good amounts of competition are healthy for any industry to flourish. The kind of competition that crowdsourcing envisions is very beneficial for the cannabis industry; an industry that still has a massive margin for growth.

The potential for breaking these huge monopolies is exceedingly desirable in the industry at a time like this, to enable it to grow to potential.

Crowdsourcing also helps individual growers overcome the red tape that currently limits their abilities to grow and scale.

To Read The Rest Of This Article By Chidike Samuelson on Green Entrepreneur

Published: May 13, 2020

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