Marijuana Business Factbook 2019

257 © Copyright 2020, Marijuana Business Daily , a division of Anne Holland Ventures Inc. You may NOT copy this Factbook, or make public the data and facts contained herein, in part or in whole. For more copies or editorial permissions, contact CustomerService@MJBizDaily.com or call (720) 213-5992, ext. 1. Cannabis Testing Labs and Ancillary Firms | Chapter 6 MJBIZDAILY.COM CHART 6.05: Portion Of Ancillary Businesses That Solely Serve The Cannabis Industry Source: 2019 Marijuana Business Factbook © 2019 Marijuana Business Daily, a division of Anne Holland Ventures Inc. All rights reserved. Portion Of Ancillary Businesses That Solely Serve The Cannabis Industry 35% 65% Ancillary Technology & Products Companies 44% 56% Ancillary Services Firms Serve Cannabis & Other Industries Serve Cannabis Industry Only Some ancillary businesses have developed in response to the needs of the maturing cannabis industry and provide goods and services only to marijuana businesses. Other companies began by serving mainstream industries and have expanded their offerings to include the cannabis industry as well. Just over half of ancillary services firms responding to the survey serve both the cannabis industry and other sectors, while 65% of ancillary technology and products companies serve other industries in addition to cannabis. The portion of firms serving multiple industries is up slightly from a year ago, perhaps in response to the increasing number of states that have legalized medical and recreational use. As the industry grows, the need for ancillary services and products grows as well ― and as the stigma attached to marijuana diminishes, more mainstream businesses may feel comfortable entering the space. While ancillary firms are somewhat protected from the risks associated with federal prohibition, their fortunes are still tied to those of plant-touching companies. For example, as wholesale marijuana prices declined in mature markets on the West Coast and in Colorado, ancillary companies serving those businesses in these states reported negative financial impacts as well. This may have been a result of the plant-touching companies opting out of their products or services to cut operational costs. In some cases, ancillary firms responded by expanding their offerings into new and emerging markets, particularly those on the East Coast.