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It is conceivable that cannabis cultivators who grow for medical purposes aim to improve the therapeutic index of their cannabis by attempting to produce particular concentrations of CBD and/or THC. The purpose of this paper is to examine whether small-scale medical cannabis growers differ from those growing for recreational reasons in terms of self-assessed concentrations of THC and CBD in the cannabis they grow.

Data collection was conducted online from a convenience sample of 268 cannabis growers visiting a popular Israeli cannabis internet forum. χ² and Kruskal–Wallis H were used to test bivariate associations between medical and recreational cannabis cultivators in terms of self-assessed cannabinoid concentrations.

In total, 40 percent of cannabis growers reported that they grow for medical purposes. Medical cannabis growers were more likely to report that they thought they knew the cannabinoid concentrations of the cannabis they grew and they reported higher self-assessed concentrations of THC, but not CBD.

Compared to recreational growers, medical cannabis growers are more likely to strive to be informed in terms of the content of their cannabis. Medical growers may also be attempting to grow more potent THC but not CBD cannabis.

Despite 2016 legalization of recreational cannabis cultivation and sale in California with the passage of Proposition 64, many cannabis businesses operate without licenses. Furthermore, federal regulations disincentivize financial institutions from banking and lending to licensed cannabis businesses. The authors explore the impact of legal cannabis business activity on California financial institutions, the barriers to banking faced by cannabis businesses, and the nontraditional sources of financing used by the industry.

The authors use a mixed methods approach. The authors utilize call data for banks and credit unions headquartered in California and state cannabis licensing data to estimate the impact of the extensive and intensive margins of licensed cannabis activity on key banking indicators using difference-and-difference and fixed effects regressions. The qualitative data come from interviews with industry stakeholders in northern California's “Emerald Triangle” and add important context.

The quantitative results show economically and statistically significant impacts of licensed cannabis activity on banking indicators, suggesting both direct and spillover effects from cannabis activity to the financial sector. However, cannabis businesses report substantial barriers to accessing basic financial services and credit, leading to nontraditional financing arrangements.

The results suggest opportunities for cannabis businesses and financial institutions if regulations are eased and important avenues for further study.

The authors contribute to the nascent literature on cannabis economics and the literature on banking regulation and nontraditional finance.