On Tuesday, voters passed legislation to legalize recreational marijuana in California, Massachusetts, Maine, and Nevada, which could pave the way for cannabis-based businesses to expand nationally. Arizona was the only state out of the five that included the issue on its ballot on Tuesday to reject legalization.
Small businesses in individual states comprise most of the legal cannabis industry, according to The New York Times. However, due to federal law concerning controlled substances, traveling across state lines, even to neighboring states or states that have already legalized medicinal or recreational marijuana, can be tricky. Business expansion is possible, but there are plenty of obstacles.
Dixie Brands, a Denver-based company that creates products such as drinks, chocolates, and lotions infused with tetrahydrocannabinol (THC), the psychoactive ingredient in marijuana, is one business looking to build a national presence.
Chuck Smith, a co-founder of Dixie Brands, told the Times that in order to expand legally, his company owns and runs anything business-related that doesn’t “touch the plant.” Then, a local site grows and processes the plant specifically for Dixie Brands. This way, the company can oversee quality control without breaking federal laws.
Even though marijuana has been legalized in some form in 28 states and Washington, D.C., some companies are just avoiding the hassle of expanding altogether. The California-based Défoncé Chocolatier plans to manufacture and produce only in state for now.
The legalization of recreational marijuana continues to open doors for hemp products in the food and drink industry. (Hemp also comes from the cannabis plant, but does not contain THC.) However, restrictions about growing the plant blocks the industry’s possibilities.
Arkansas, Florida, North Dakota, and Montana also legalized the use of medicinal marijuana on Tuesday.