By Allison Margolin and Ashley Browder of Margolin & Lawrence.
As the cannabis industry evolves nationwide, certain factors continue to play a significant role in the success or hindrance of cannabis’ industries by state.
Restrictions on outside investments, state and local regulations and oversaturation are constant roadblocks that exist in every cannabis legalized state to some degree and have a direct impact. These factors dictate who can participate in the business, they place a cap on growth opportunities, and often prevent marginalized communities from truly being able to participate.
No Outside Investors
There is a lot of talk about the lack of opportunity for outside investors to get in on states’ local cannabis industries. Foreign investors are looking to collaborate, but the general consensus from state and local regulation has been negative. This position, however, is beginning to change.
In Oregon the House recently passed a bill that would allow the governor to make collaborative agreements with other states for the transfer of marijuana, thereby allowing a way for outside investors to profit from Oregon’s cannabis industry.
In California, existing cannabis businesses have been given the greatest advantage over any new players but that hasn’t prevented investors from trying to get a piece of California’s industry. Existing California regulations allow companies to dramatically expand to develop chain locations around the state, which then boosts the manufacturing aspect. Outside investors like the opportunities that California provides, which keeps the investments strong despite a plethora of players.
Arizona, on the other hand, is expanding its cannabis industry quite conservatively and numerous restrictions on vertical integration keep investors from being able to participate in multiple cannabis areas. Without outside loans, Arizona …