-Submitted by Elizabeth (Liz) Hartsel
Regulation of the cannabis industry is constantly evolving. Although marijuana remains an illicit substance under federal law, more and more states are legalizing cannabis for both recreational and medical use. The sale of industrial hemp, which is legal under Colorado law, may also soon become legal under federal law if the Senate’s version of the 2018 Farm Bill is passed. And most recently, the DEA placed certain products containing cannabidiol (CBD) that have been approved by the FDA in the least restrictive category of the Controlled Substances Act.
On September 24, 2018, a Denver Startup Week panel discussed the “States of Cannabis,” and described (1) areas for growth, and (2) the challenges many startups face when entering the cannabis industry. The marijuana industry in Colorado is already saturated. Therefore, there is more growth potential for industrial hemp companies, and companies offering ancillary services such as information about compliance, products used in cannabis cultivation (such as mulch and hydroponic growing systems), technology (seed to sale tracking, growth metrics), packaging, accounting, finance, and marketing and branding.
As long as cannabis remains an illicit substance under federal law, however, all cannabis-related companies (even those offering ancillary services) will continue to face roadblocks, such as local regulations, difficulties raising capital, and prohibitions in banking and credit card processing. These companies are also vulnerable to civil suits under the federal Racketeer Influenced and Corrupt Organizations Act (RICO).
Fortis Law Partners LLC has experience in assisting clients navigate these roadblocks, and has represented cannabis-related businesses in M&A deals, joint ventures, registering trademarks, and litigation. Please contact us for your cannabis-related legal questions.