Marijuana business “tripped up” at state borders due to interstate transportation prohibition

The fast-growing marijuana business (both recreational and medicinal) has been slowed by the current prohibition on the interstate commerce of marijuana products. This has led to siloed markets. Siloed markets are not sustainable for many reasons including, lack of “year-round” production in many states, illicit use due to “supply and demand” issues, and loss of competition for smaller businesses. Moreover, siloed markets are contrary to the States’ desire for economic prosperity to small and minority owned businesses.

States are currently addressing this matter with a “wait and see” approach until the Federal government can provide legislation that will bring “clarity” to this issue. Simultaneously, marijuana business owners are trying to come up with procedures that do not violate existing laws in the short-term. Long-term this issue will be resolved because, simply, it must be. Much like the Professional and Amateur Sports Protection Act, (PASPA) a federal anti-gambling law (or rather, was a federal anti-gambling law) that was signed into law in 1992, business, social implications and public demand will require the matter to be resolved in favor of permitting interstate commerce. Potentially, this could be accomplished in a “phased-in” base.

This interstate prohibition increases the need for potential cannabis business owners to establish effective intellectual property strategies to protect brand and patentable inventions (including plant hybrids). Most particularly, it is necessary to recognize a strategy which includes protection without federal registration, e.g. common law trademarks, know-how, trade-secrets, etc.

Potential licensees (for all licenses, retail, grower etc.) are advised to establish a strategy that incorporates all issues to obtain cost effective commercialization strategy.

Image from Richard T on Unsplash