It can seem like the cannabis industry resembles Oz from afar: full of colorful characters and everything green. Taking a closer look behind the green curtain reveals a complex web of varying regulatory requirements, varying oversight, frustrations, and social and economic justice. As a result, prospective cannabis business owners and other service providers who are keen on working with cannabis companies would be wise to consider what it takes not only to enter but also to succeed in the cannabis industry.
Hemp and marijuana are scientifically and legally distinct.
The differences between hemp, CBD, and THC are not only legal, but also scientific. The two cannabis plants are indeed related. Legally speaking, hemp is cannabis that contains at most 0.3 percent THC, also known as tetrahydrocannabinol, the main psychoactive component in cannabis. The term marijuana refers to marijuana that has a THC content greater than 0.3 percent.
CBD, or Culture Cannabis, is one of several other cannabinoids that can be derived in varying concentrations from both marijuana and hemp, depending on the cultivar and growing conditions. Likewise, if you plan on operating in more than one state. There are different regulations pertaining to hemp-derived CBD and marijuana-derived CBD products, and it is important to know which laws apply in your state. You should also bear in mind that the regulatory structures of marijuana and hemp differ in many ways, so find a knowledgeable lawyer to help you.
It’s a risky business regardless of what happens
There is an important point to remember about the cannabis industry regardless of which state you plan to operate in – marijuana is still federally illegal to be sold, since it is not proven to have medicinal value, i.e. it is a Schedule 1 drug. Whenever you deal with cannabis, you take the risk of seizure, closures, and limitations on access to insurance coverage and financial services.
Due to marijuana’s federal illegality, it is also illegal to transport the plant interstate. 17 states have legalized marijuana (welcome aboard New York, New Mexico, and Virginia! ), but interstate transportation of marijuana plant material is still illegal, even between legal states. Intellectual property, packaging, and money belonging to your company can, however, be transported between states, opening the door to collaborations and licensing deals for expansion. Although hemp can be transported across state lines legally, law enforcement personnel must be educated on what makes hemp different from marijuana before it can be transported.
The cost is (very) high.
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Because cannabis is illegal at the federal level, starting a cannabis-related business is expensive. A number of the expenses involved with cannabis-related real estate and regulatory compliance are not applicable to ancillary businesses, including accounting firms, marketing agencies, packaging suppliers, and builders. It is more important to take into account the costs of doing business in the quasi-legal cannabis industry for “plant-touching” businesses such as dispensaries, cultivation and processing facilities, laboratories and kitchens.
In terms of social justice, you have responsibilities.
In order to profit from the cannabis industry, whether as retailers or electricians setting up cultivation facilities, retailers, electrical contractors, and electricians should educate themselves about the history of the war on drugs, how cannabis arrests impacted African-American, Latino, and poor generations.
Since the founding of the U.S. in 1790, patients, activists, and business leaders have worked together to legalize cannabis in states and countries around the world. It is important to recognize and act upon these impressive advances, but we must also recognize and act to eradicate the ongoing harms caused by disproportionate enforcement of drug laws.