Despite the significant decline from the previous year, the legal cannabis market has not only opened up opportunities in cultivation and sales but has also given rise to a thriving sector of ancillary cannabis businesses.
Ancillary cannabis businesses encompass a vast array of services beyond cultivation and sales. They cater to various sectors, such as packaging and labeling companies, secure transport businesses, security companies, e-commerce websites, software and mobile application developers, testing labs, licensing and branding companies, marketing and design agencies, media networks, retail design firms, hydroponics and greenhouse systems providers, nutrient suppliers, extraction equipment manufacturers, commercial kitchens, banking and accounting services, compliance firms, point-of-sale system developers, and real estate agencies.
While plant-touching businesses directly handle cannabis, ancillary businesses provide a vital support to the industry, particularly in terms of compliance with regulatory guidelines in a sector where its cash-based nature poses many challenges. Due to the federal illegality of cannabis, banking remains a challenge, leading to cash-based transactions that make businesses vulnerable to robberies.
This is why more and more dispensaries are prioritizing security to protect their premises and assets. Implementing comprehensive security measures involving alarms, locks, video surveillance, and personnel training seems crucial, as well as trained security guards for ensuring compliance with laws and minimizing legal liability.
In addition, as the global cannabis market transitions from an illegal to a legal industry, the packaging sector undergoes significant changes and growth. Several experts forecast that the global cannabis packaging market will reach $1.6 billion in 2024. However, government regulations and the shift towards decentralized cannabis production present supply challenges. The market is characterized by small producers and retailers, and the packaging industry must adapt to changing regulations and demands. Key trends and drivers include the need for environmentally friendly packaging solutions and the development of advanced packaging technologies.
As security and packaging solutions emerge as high-demand services in an industry looking to meet consumer demands while complying with evolving regulations, the growth of ancillary cannabis businesses highlights the broader impact of cannabis legalization beyond cultivation and sales.
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