Public opinion about the legalization of marijuana has changed over the years, and several states have recently changed their laws. Some states have authorized the production and sale of medical marijuana, while others have legalized recreational use. Entrepreneurs have taken this opportunity to establish businesses involved in the production, processing, and distribution of marijuana products.
The existing challenge is the fact that federal law still views the drug as an illegal substance. This gives marijuana businesses unique risks that they have to assess and minimize. It’s important for business owners to understand the laws and how public policy has changed over the years. This article focuses on how the federal law relates to operating a marijuana business.
The Federal Law and Its Impact
Federal laws regarding marijuana are strict. Marijuana is listed in the Controlled Substances Act as a Schedule I drug. This means that the federal government has classified marijuana as a drug that has no medical purpose and also has a high likelihood for abuse. Essentially, the federal government views marijuana as harmful as methamphetamines and heroin.
This proves especially problematic for distributors and cultivators. They are in contact with what the federal government deems as contraband, and thus aren’t able to shield themselves from liability. Doctors aren’t able to write prescriptions for marijuana because of the federal law, but are able to provide recommendations.
This federal law also has caused many problems for businesses in terms of banking. Banks must be in compliance with federal regulations. There are ways for banks to become compliant and accept cash from marijuana businesses, but many choose not to do this. Many banks fear losing their charter due to the potential risks involved. Because of this, many marijuana businesses have to be cash-only.
State Compliance Matters
Complying with your state laws is crucial to running your marijuana business. The way the Drug Enforcement Agency enforces federal marijuana laws has changed significantly over the years. When states first began legalizing marijuana for medicinal and/or recreational use, the DEA would enforce federal laws against cultivators and distributors even if they were in compliance with the state law. The Gonzales v. Raich decision by the Supreme Court ruled that state-compliant businesses could be liable for federal offenses.
Thankfully things have changed. Through federal court decisions and spending bills, the DEA has essentially been backed into a corner and will no longer be strictly enforcing federal laws against marijuana businesses that are in compliance with state law, where the drug is legal.
How Enforcement Policy Has Changed
The federal government has backpedaled from strictly enforcing its laws in several instances. The U.S. Department of Justice has indicated that prosecutions are now going to focus on sale, distribution, and production of marijuana by crime networks, distribution to minors, drugged driving, and diversion of the drug to states that don’t have legalization schemes.
Unfortunately, there have still been some questionable instances that don’t line up with these policy changes. Some businesses have continued to be prosecuted even though they comply with state law and don’t fall outside the DOJ guidelines. Regardless of remaining concerns, the national prosecution policy has quite obviously changed, and it is a lot safer to operate a marijuana business in states where it is legal.
Get Legal Advice
Because the federal law officially remains unaltered, there are still some uncertainties for businesses in this industry. This makes it absolutely crucial for business owners to make sure they are in compliance with state laws and local regulations. Preventing legal problems and protecting yourself from federal seizure or prosecution is done best with the help of a small business attorney. Make sure your business is operating smoothly and that you are protected from potential liabilities.
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