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Could federal cannabis legislation push small companies out?

On Behalf of | Oct 15, 2021 | Cannabis Business

Contradictory federal, state and local regulations around cannabis and the cannabis industry have made it difficult to break into the business for a lot of would-be entrepreneurs. Even those who are successful may suddenly find themselves faced with the possibility that they’ll have to shutter their doors as regulations shift. That doesn’t even begin to take into consideration the struggle cannabis businesses have doing their banking.

Federal marijuana legislation (which would change marijuana’s entire legal status and decriminalize it entirely) would be a blessing of these small businesses, right? Maybe not.

Federal legislation may turn local dispensaries into “Big Cannabis”

Right now, cannabis markets are entirely localized — with each state controlling the way business is managed within its own borders. That effectively keeps the cannabis industry from becoming a cannabis conglomerate.

If state borders open up to nationwide trade and business, it may not be a big step to having all the local cannabis businesses in your area displaced by “McDispensaries” owned and operated by major companies.

That’s bad news for the cannabis industry as a whole, which has largely welcomed women-owned and minority-owned companies. There are real fears that opening up new business and banking tools could wipe out the cannabis industry as it currently exists.

While nationwide competition would likely drive cannabis prices in any given area down, the small mom-and-pop cannabis farms and shops that have sprung up all over the place could find themselves going the way of the local hardware stores and groceries once Wal-Mart moves in.

How can you protect your cannabis business?

Change is inevitable, especially in the cannabis business. The best way to prepare for what is coming is to have experienced guidance that will help you understand how changes in the law could affect your company so that you can plan your response.