I’ve been asked, both in my personal and professional life, why I chose to start Cannabusiness Blog. It’s probably the second question people ask after the initial “Canna-what?” And it’s a fair question. So fair, in fact, that I decided to use it as the starting point for this first post.
So, why cannabusiness?
Legalization for marijuana for recreational use is less than five years old. If it were a child, it would still be using those frustratingly bad safety scissors and needing its hotdogs cut up into manageable, less-windpipe shaped bites.
The first states to legalize cannabis for recreational use were Colorado and Washington on November 6, 2012, with Alaska and Oregon doing so just less than a year ago on November 4, 2014 (and Washington D.C., though it has had some unique difficulties in enacting the law).
And attitudes over legalization still vary widely by age, with a strong majority of millennials supporting legalization and baby boomers being split on the issue. This divide helps bring into sharp relief the changing attitudes over marijuana use, legalization and commerce. As the idea of legalization gains acceptance, the issues surrounding it become more complex.
For states and municipalities that are just beginning to consider the idea of legalization, whether for recreational or medicinal use, the questions that arise are often in the context of choosing an appropriate and effective approach to regulations and law enforcement. For states, these are uncharted waters, and trial and error is going to be a major part of the system for the next few years, as states adopt and amend their approach to the legal marijuana industry.
Marijuana entrepreneurs and cannabusiness owners face a unique set of challenges as well. The contours of the industry have yet to be fleshed out, and this creates opportunities for people to be creative when conceptualizing a cannabusiness model and area of expertise. For example, those who enjoy gardening and working with plants might be interested in starting a farm or a growry. Those that enjoy working directly with people and sharing a passion for legal cannabis might consider becoming a “budtender.” Like making new creations in the kitchen? Consider creating edible deserts or smoothies. There’s even the option of starting and developing a “weedery,” which is like a winery or brewery for legal cannabis. These new and dynamic opportunities are part of what makes it an exciting time for the legal marijuana industry.
And on the flip side, there are new and novel challenges that arise for cannabusiness owners. Not least of which being that it is still illegal under federal law, and is still classified as a “Schedule 1” drug, alongside heroin, cocaine, and LSD. This means that engaging in the cannabis business, even in states where it is legal, carries a risk of running afoul of federal law. The fact that it is illegal under federal law also means that many large banks have chosen not to work with legal cannabusineses for fear of violating AML laws or other regulations. This means that many cannabuinesses are forced to operate on a cash basis, which makes those business potential targets for crime and makes paying taxes and licensing fees all the more difficult.
Many marijuana startups also lack easy access to specialized attorneys who can handle the complicated tax issues they will invariably face. Then there’s the even more basic question of whether a contract with a marijuana vendor will even be enforceable, since courts are not allowed to give effect to illegal contracts. While several trial courts have suggested that these contracts are enforceable, no appellate court has conclusively addressed the issue.
So I suppose, in a roundabout way, my answer to the question of “why cannabusiness” is that:
- It is an industry that is rapidly gaining acceptance as the movement for legalization and regulation of cannabis grows
- It presents new and interesting questions for states, individuals and businesses alike.
- It is an industry that is still in its infancy, which means that it that has ample room for innovation and creativity.
- And finally it’s an industry that many people (myself included) are passionate about, and when people are about to work in an industry they’re interested in and follow their passion, I believe they feel a greater sense of accomplishment and fulfillment, and this self-actualization manifests itself in high quality products and services.