The complexity of the laws surrounding the cannabis industry makes it a very troubling scene for most entrepreneurs to venture into. Though the cannabis industry is very lucrative and boasts of great yield, there are still many things to consider before going all in. And of all the factors to consider, there’s none more important than the issue of criminalization of cannabis on a federal level. This stance remains even though many states have legalized the medical and recreational use of marijuana.
This article seeks to explain how much effect the decriminalization of cannabis can have on entrepreneurs already involved in the cannabis industry and those seeking to enter the industry. Before going into the numerous benefits decriminalization will offer, I’ll drill down on what decriminalization of cannabis truly entails.
Cannabis on a federal level is classified as a Schedule I narcotic drug which means that it is of no medicinal value. This classification also terms cannabis as being dangerous, highly addictive, and a source of severe side effects. This classification remains even though a considerable number of states have legalized the use of cannabis not just for medicinal purposes but for recreational use as well. In fact, in 2020 alone five new cannabis markets were opened. Some created new laws allowing cannabis while others improved on previous cannabis laws. New Jersey, Arizona, and Montana all legalized adult use of cannabis, Mississippi legalized only medicinal use while South Dakota became the first state to legalize both medicinal and recreational the same time.
The legalization of cannabis in such states is not the same as the decriminalization of cannabis. This is because decriminalization of cannabis will have to involve rescheduling at the national level. Without rescheduling cannabis, several restrictions will continue to hinder the progress of the cannabis industry. It takes decriminalization and legalization for the cannabis industry to experience true expansion.
The present trend of legalization in different states can only go so far. It takes federal decriminalization of cannabis for all the states to come to a unified stance on cannabis. It is obvious from the votes of the recently concluded Presidential elections that everyone is on board for reforms for cannabis on a national level. This means that good news should be expected very soon but as it stands, cannabis is still not legal for use on a federal level.
How does cannabis criminalization affect entrepreneurs?
With criminalization being the major problem with the cannabis industry, it’s no surprise that it also affects entrepreneurs. The federal decriminalization of cannabis will affect everyone involved in the cannabis industry. This includes consumers, operators, investors, and all the human elements that make up the cannabis industry. While it’ll affect some directly, it’ll affect others indirectly.
The first issue most entrepreneurs have with the cannabis industry has to do largely with the complexity of its laws. The fact that different states have different laws means that entrepreneurs cannot just waltz into the industry. They have to understand the laws that exist in that region and ensure that they understand them enough to avoid litigation. This is because the current scheduling of cannabis criminalizes many activities in the cannabis industry. This is why many entrepreneurs seem to be dissuaded from venturing into the industry. However, if that ceases to be the case we’ll have more influx of creative minds, and investors in the cannabis industry which will be very crucial to moving the cannabis industry to the next level.
Another way that the criminalization of cannabis puts off different entrepreneurs is the lack of proper insurance coverage. The stance of the FDA on cannabis means that sufficient insurance coverage is not available for cannabis companies. The available coverage plans are not tapered to the peculiarities of the cannabis industry and the implication of this is that most of the insurance coverage plans available to cannabis companies are not up to par.
Benefits of Decriminalization to Entrepreneurs
Decriminalization of cannabis will go a long way to creating breathing space for entrepreneurs in the industry. This is because it will help to remove some of the barriers that those entrepreneurs have become used to in the industry. Decriminalization will help to make relevant financial services available as opposed to their limited availability presently. It will help to grant a listing on the US Stock Exchange which is bound to propel big firms in the industry to higher heights. It will also make room for research benefits and tax benefits making the industry more lucrative and attractive.
Removes fear of litigation
One area where entrepreneurs in the cannabis industry need help is in the area of litigation. It is very hard to be an entrepreneur in the cannabis industry nowadays and not have had the threat of litigation tossed at you before. Due to the complexity of laws regarding cannabis, entrepreneurs are used to settling different types of business disputes in and out of court. The peculiarity of cannabis marketing also means that they are open to many suits from consumers and other members of the public.
Expands the industry
The year 2020 saw the rise of the COVID-19 pandemic that shook the world. This had a great impact on the cannabis industry as many states classified cannabis as an essential commodity. Decriminalization will not only ensure that newer markets come into the industry, it will also widen the scope of present ones. With the current level of acceptance that cannabis is enjoying generally, decriminalization is what most cannabis advocates see as the next logical step.
With the present state of things, it is important for every entrepreneur to truly understand the operational and regulatory peculiarities of the industry. It is very easy to see the restrictions of the cannabis industry and be discouraged from going in. Likewise, it is also very easy to identify the opportunities in the industry and be tempted to jump in to maximize them. This dilemma is what every entrepreneur in the cannabis industry faces and it’s one of the peculiarities that make the industry so special.
To answer the question ‘is decriminalization the short term relief entrepreneurs need?’ Absolutely, decriminalization of cannabis will make life a whole lot easier for cannabis entrepreneurs.