Challenges with Legalized Cannabis

While marijuana is legal in California, there are still many challenges that warrant observation by those who want to enter into the business. Below are some of those issues:

• Be Aware of Possible Federal Prosecution. While legal within California, marijuana federal prosecution is still possible, but can be dependent on your compliance with state law. See e.g., United States v. McIntosh, this limited federal enforcement of marijuana where the person complies with state laws; compare with, United States v. Daleman, defendant found guilty because of failure to comply with state laws.
• Comply with State law. Even if your state allows marijuana legalized, you must follow strict compliance or possibly be charged with small offenses.
• Registration.  Cannabis dispensaries are unable to register federally because the company has to be a law abiding and marijuana is a Schedule 1 Drug. California permits cannabis companies to register with the state. See, California Secretary of State, for details.
• Trademark Registration. Federal registration of trademark or service mark is prohibited; however, California law is available. See, California Trademark.
• Financial Challenges.  Assets, including money can be subject to seizures or frozen by the federal agencies. This can also lead to challenges in obtaining finance.
• Minors. –Be aware of selling to minors as well as minors with fake identifications.
• Review Federal Policies. Enforcement of laws changes with federal administrations.

The COB Legal Information Clinic has other material on this subject.