With any new and upcoming industry, regulations surrounding product development, market research, and potential regulatory impacts must be evaluated. But what happens when that new industry involves a product that is illegal to produce on a federal level, but legal on a state level? This unusual circumstance dictates a more expansive set of considerations and potential issues for all stakeholders involved.
The cannabis industry was first given an opportunity for legalization in 1996, when California voters passed Proposition 215 legalizing the use of medical marijuana in the state. Since then, regulations have evolved on a state level allowing different degrees of criminalization and legalization. Marijuana possession, from a criminalization standpoint, is either legalized, decriminalized, or fully illegal. Legalized marijuana is state-approved for both medical and recreational use. Decriminalized means there is still a penalty for possession, but it is no longer treated as a federal offense and offenders in these states receive a penalty similar to a misdemeanor. In states that still apply the federal regulations against marijuana possession, as outlined in the Controlled Substances Act, marijuana is fully illegal. As of November 2020, only eight U.S. States remain on the fully Illegal side of board in not allowing marijuana use for neither medical nor recreational use. Two of those eight states have decriminalized possession. This multibillion-dollar industry is expected to continue expanding over the next several years, with some studies showing revenue generation to more than triple compared to today’s figures.