Since the legalization of cannabis in Canada, US states have been under pressure to follow suit, and many have. In this light, firms like mCig Inc (OTCMKTS:MCIG) are lining up to exploit the market, particularly in California, the most populous state in the Union by far.
A recent report on the US cannabis market projects that the market will grow from $10.3 billion in 2018 to $39.4 billion by 2023. This is 30.7% Compound Annual Growth Rate (CAGR) for the period under review.
MCig to exploit California cannabis boom
Interestingly, another report, “The State of Legal Marijuana Markets” reveals even greater news out of California. The report says that California will account for the largest share of the huge growth in the US Cannabis market.
For mCig to get into the California market at this time is quite strategic. According to a news release, the firm will officially begin operations in the state after acquiring relevant regulatory permits. The firm has already obtained permit licenses via a majority-owned local company.
Cal Acres Inc., the local company in question, received the California Type-11 Distribution Temporary license from the Bureau of Cannabis Control. According to the release, the license will allow Cal Acres to purchase, repackage, transport, and sell cannabis products in the state.
Commenting on the developments, Paul Rosenberg, CEO of MCIG, said the license is very important to them. In particular, it will allow the firm to interact with many players in the California cannabis market. Further, it will help the firm to launch future brands.
Despite the California cannabis boom, the market might not reach its potential due to threats from federal regulators. Particularly, the cannabis market is facing unique challenges that might hamper its growth.
Some of the challenges include sky-high taxes. As such, the price of a gram of cannabis is quite expensive. The other challenges involve complex legislation surrounding the market and also distribution problems.