Compliance Risk & Investment Risk
Investment risk is the likelihood or probability of occurrence of losses relative to the expected return. The higher the compliance risk, the higher the investment risk and the lower the value of the cannabis business. As laws and rules change, cannabis business must adjust operations and processes to comply. Non-compliance increases operating costs, causes re-work and reduces profit.
Simply put, a cannabis business is worth less if the business is non-compliant with financial & regulatory rules and requirements. Below is Adherence’s Value-to-Risk Matrix for Cannabis Businesses:
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