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High Aspirations in Cannabis?

by Brian S. Whalen, CPA January 22, 2019
Estimated Reading Time: 2 minutes

 

The cannabis industry is the fastest growing industry in the United States, with $9 billion in revenues in 2017 and projections for well over $20 billion by 2021.  Marijuana is legal in some form in thirty-three states and the District of Columbia.  Even Utah hopped onboard, and they have some of the most restrictive alcohol laws in the United States.  Eventually, the whole country will be able to seek a safe cannabis product for adult use; however, as of today (January 2019), medical marijuana is legal in 33 states and another ten have passed laws to allow adult recreational use.  In addition, Washington D.C.’s laws allow for both.  This creates well over 40 sets of unique laws without regard to local requirements or the type of business (cultivation, delivery, dispensary, laboratory, etc.).  It is no wonder that there is so much confusion among owners and operators of cannabis businesses, as well as the professionals who service them.  Add the federal government into the mix – IRS, DEA, FDA, Treasury, etc., and you are navigating an uncharted sea of mines in the North Atlantic Ocean aboard the RMS Titanic during World War II.  No, I’m not high, but many with high aspirations are only looking at the shiny side of the coin.

The only constant in the industry is change.  Regime change (from Obama’s Attorney Generals to Jeff Sessions to William Barr’s likely confirmation) has added to uncertainty in the form of Memos and rescinded Memos, and it seems that even the IRS is struggling to expediently iron out the ramifications of the Tax Cuts and Jobs Act of 2017 (new tax laws) amidst a government shutdown.  Add § 280E to this melting pot of seemingly random red tape, and it’s no wonder that confusion in our industry is the norm.  As the founder of Green Man Cannabis pointed out, “There is a difference between pioneers and settlers.  Pioneers got arrows and settlers got land.”  I would venture to say that we are still in the frontier stages.

The only constant in the industry is change.

If you are entering the “Green Rush”, know that the competition is fierce, the regulations are unsettled, and there is no free land, but plenty of free arrows.  Put together a solid team and be prepared to work all day, every day.  Without risk and hard work, there can be no reward.

RELATED:  Is Your Cannabis Management Company a Ticking Time-Bomb?

Table 1: Legal States

33 States* with Legal Access to Medical Marijuana

10 States* with Adult Use Recreational Marijuana

33 States* with Legal Access to Medical Marijuana

10 States* with Adult Use Recreational Marijuana

Alaska

Alaska

Montana

Arizona

Nevada

Nevada

Arkansas

New Hampshire

California

California

New Jersey

Colorado

Colorado

New Mexico

Connecticut

New York

Delaware

North Dakota

Florida

Ohio

Hawaii

Oklahoma

Illinois

Oregon

Oregon

Louisiana

Pennsylvania

Maine

Maine

Rhode Island

Maryland

Utah

Massachusetts

Massachusetts

Vermont

Vermont

Michigan

Michigan

Washington

Washington

Minnesota

*Washington, D.C.

*Washington, D.C.

Missouri

West Virginia

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