KING OF THE ROAD
Recession-Proof Franchises: Cannabis and CBD
By Holly A Ford of Cannabis10x
As seen in Franchise Connect Magazine
As seen in Franchise Connect Magazine
O n March 4th, 1933, amidst the bleakest moments of the Great Depression, President Franklin D. Roosevelt delivered his first inaugural address. Tagged to the famous line; “The only thing we have to fear is fear itself,” the president declared, “We will act swiftly to face the dark realities of the moment.” Act swiftly he did, surreptitiously deriving a source of funding for The New Deal by quietly repealing prohibition—a move that would increase federal revenue by 9%. In the wake of a global pandemic, history appears to be repeating itself with the impending federal legalization of cannabis to fund the Biden administration’s plans. One of the soundest investments, in an economic recoil of any level, is in a business that represents a need that will not go unrealized even in the wake of thwarted income. Such businesses as discount stores, essential home repairs, and pharmaceuticals are the most obvious. However, history shows us, that ”diversion substances” such as cigarettes and alcohol not only did not decline but grew substantially
during the Great Depression and subsequent recessions. Cannabis and cannabidiol (CBD) businesses represent both the pharmaceutical—in medical states—and diversion substances—in recreational states. Two years ago, increasing stock positions was a good business decision. Today, on the precipice of global economic upheaval, there is a miasma in the air with a foreboding vibe in all investment decisions. In 1973–1974, the market lost 89% of its value in 35 months. Then in 2000, the dot.com bubble eroded $1.75 trillion in wealth. Then came 2008 when Americans who stayed the course lost $10.2 trillion. Ask victims of dot.com or the 2008 financial crisis if they knew they were in a bubble, and two thirds will say “yes.” According to the Warren Buffett Indicator alone, we are seeing the biggest stock market bubble in recent American history. With the massive flux in recent days with stocks and cryptocurrency, investors are looking for further diversification in tangible assets. Metals, fine art, instruments, and jewelry are timeless investments. But an even better choice is a revenue-producing asset. Billionaire Ray Dalio pointed out the elephant in the room on a recent virtual Ted Talk, confidently stating that the U.S. is “heading into a great depression.”
Investing in a CBD or cannabis business is a recession-resistant place to invest. But even smarter is investing in a CBD or cannabis majority-owned franchise. Why a franchise? It is likely you would not be reading this article if you did not recognize the value of a franchise. However, cannabis and CBD are a new industry, so investing in a profitable franchise has many advantages, such as learning the industry, understanding the supply chain, and knowing the specifics of licensing and detailed compliance. Why majority owned? As the many who have been burnt by bad investments live to decry, ”Without majority ownership, shiny business investments can shatter like a hook-up with Bernie Madoff.” In an economic winter environment, which comes like an arctic chill after the fall we are currently in, new investments need to be protected by your own hands or your closest management teams. The cannabis industry is forecast to be $37 billion by 2024, with CBD to exceed $20 billion. Opportunities in this sector included cultivation, processing, testing labs, retail, distribution territories along with many non-planttouching ancillary businesses. To find the right cannabis and CBD franchise opportunities that work best for you, contact the international business brokerage Cannabis 10X (cannabis10x.com).
Holly A Ford is the founder and CEO of international business brokerage Zarian Firm and author of best-selling book Create Your Own Wealth—A Collection of 2-Minute Topics on Franchising. Ford is a member of the Forbes Communication Council, contributor to 12 publications, and cohost of the blog talk radio show, Pillars of Franchising. Ford's mission to "Empower Humanity with Creative Force" has ignited an initiative to leverage franchising worldwide as a social entrepreneurial catalyst for global change.