Marijuana’s Legalization is Complicated for Business Owners

Even with new laws business owners still face hassles & red tape

Colorado marijuana legalization and your small businessOn Tuesday, two states passed laws that achieved a major step towards drug law reform in the United States. Colorado and Washington voted to legalize marijuana for recreational use. But entrepreneurs hoping to become shop owners or growers in those states should beware as Federal prosecutors still view weed as illegal and continue to raid growers of the drug. Additionally, the new laws legalizing possession have to contend with already existing laws which further complicate the situation. Some entrepreneurs learned how complex the situation is the hard way.

Dave Schwaab ran a dispensary named “Abundant Healing” in Fort Collins, Colorado in 2009, a decade after the state legalized medical marijuana for patients with certain health conditions. His shop employed 19 people, grew 1,200 plants and cared for 1,000 patients. Its revenue averaged $70,000 a month.

“I adhered to every legal state regulation, all 165 pages of unambiguous requirements, “ he said.

Then the city passed a new ordinance outlawing dispensaries. His marijuana plants were destroyed by the police. He was forced to fire all 19 workers and lost $300,000. Colorado’s Amendment 64, which passed on Tuesday, would allow him to reopen his business but Schwabb doesn’t want to risk it.

“Even though this wonderful amendment passed, I might not go back into business because of the legal quagmire. They took my capital once. I’m not going to let them do it again.”

The murky and complex situation that comes with the legalization of marijuana includes other issues. Banks are hesitant to work with or handle money related to the marijuana industry for fear of federal agencies charging them with racketeering or money laundering. Some prosecutors in Washington put pressure on landlords to kick out weed tenants or else they’ll lose their property. Another law regarding dispensaries operating within 1,000 feet of a school is yet another tactic used by prosecutors.

Will Amendment 64 and other new laws change the current operating environment in Colorado? Only time will tell. These new laws could be just the tip of the iceberg for the legalization movement and a sign that public opinion regarding the nation’s current drug policy has changed.

Greg Campbell, journalist and author of medical marijuana book “Pot Inc.,” says “it’ll be a question of priority. If the DEA is really going to waste its resources rather than focusing on bloodshed on the border, you’ll see complete outrage.”

For now, entrepreneurs may want to watch the process of legalization play out more, before opening their businesses.

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