Legalization and Decriminalization
According to Whitehouse.gov, 23 states, the District of Columbia and Guam have drafted laws permitting varying levels of marijuana use. State laws have been granted the authority to define these, but they are responsible for creating and enforcing strong laws that recognize the federal law enforcement focus and other factors. Some states have legalized the drug, and others have decriminalized it. Legalization allows people to use it as long as they follow state regulations. Decriminalization allows people to possess marijuana without fear of criminal charges, although it is a criminal offense. If law enforcement finds people with it, there will still be some minor consequences, such as a fine, but they will not be prosecuted.
Growing and Selling Marijuana
Thanks to the Obama Administration, state laws will not be challenged by the federal government, even though a marijuana business could be prosecuted under the Supremacy Clause of the Constitution. However, states have a responsibility to strictly regulate who may use, grow and sell marijuana.Understanding the laws in individual states is important, as they are significantly different. For example, in Colorado, individuals may grow their own for recreational use as long as they maintain no more than six plants and they do not sell it. A person who exceeds this threshold must apply for various licenses to remain within the limitations of the law. Commercial licenses vary widely, and states impose many controls on them. In Washington, there are three types of licenses for businesses: retailer, processor and producer. The retailer license cannot be held in conjunction with either of the other two licenses, although a person may hold both marijuana producer and processor licenses. Some states accept applications but make a very limited number of licenses available. Michigan does not allow businesses to cultivate or dispense marijuana at all. However, people can become registered to use it medically and may grow their own.A person who wants to operate a business growing marijuana should review individual state laws regarding testing for impurities and contaminants, levels of THC, and other health safety issues.
Twenty-seven states do not have decriminalization or legalization laws, so any transportation of marijuana is illegal within their borders, and federal law is fully enforceable. Although marijuana is a Schedule I substance according to the U.S. Drug Enforcement Administration, trafficking penalties are not as harsh as they are for other Schedule I drugs such as heroin. Still, a person who is charged with federal trafficking of marijuana is likely to serve prison time and pay millions of dollars in fines, depending on whether it is a first or second offense and how much of the drug is being transported.Just as growing and distribution laws vary from one state to the next, transportation is treated differently by state laws. While individuals may transport a small amount within the state borders, depending on the state, most businesses must have at least one license and sometimes more. Transportation may be heavily monitored. For example, in Washington, before transporting marijuana, a licensed business must provide information to the State Liquor and Cannabis Board about the driver and vehicle, the time of departure and when the delivery is expected, as well as information directly related to the shipment itself, such as the weight. The company must keep every transportation record on location for three years. This level of detail is a telling illustration of the need to pay careful attention to individual state transportation laws.
Levying a specific sales tax on marijuana presents a problem because it is available in so many forms. Therefore, states have come up with a variety of solutions for collecting tax revenues, and these can be quite complex. For example, in Washington, there is a separate sales tax for nearly every transaction. Customers pay a 25 percent tax plus a 6.5 percent state sales tax, and there are some local sales taxes as well. However, the processor also pays a 25 percent tax when purchasing from the producer, and the retailer pays a 25 percent tax on the purchase from the processor. Although the limited legalization of marijuana has presented an exciting business opportunity for many, the complexities may create confusion even for the savviest businessperson.
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