Currently, 39 states have passed measures legalizing cannabis for medicinal purposes, 21 of which have legalized recreational or adult-use as well. The District of Columbia and the U.S. Virgin Islands have also legalized medical marijuana use.
Marijuana has become a huge industry in the country even though it remains illegal federally. As such, the laws governing this lucrative plant are enacted by individual states and they aren’t clearcut.
For small businesses in states with legal marijuana laws, there are changes that have directly or indirectly impacted operations. This post addresses the impact of marijuana laws on small businesses.
Industry Opportunities
States where marijuana is legal offer a number of opportunities for small businesses. These opportunities can be directly or indirectly linked to the cannabis industry.
An example of indirect opportunity courtesy of the cannabis industry is a wider market for general products and services that also have usage in the industry.
Software or logistic startups, for example, can work with marijuana clients, which is an increase in business opportunities.
Some industry-related opportunities small businesses can take advantage of are in:
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Cultivation
Small businesses and startups can tap into cannabis cultivation across the states in many ways. They could sell their services and products to growers. Some of the products and services needed by cannabis growers include fertilizers, tents, grow lights, emergency power installations, etc.
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Processing
Cannabis processing is a stage where farms harvest, dry, cure, trim, grade, package and label their product. It’s an important aspect of industry and small businesses can join to help growers address the challenges involved.
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Equipment manufacture
Throughout the cultivation and production process, cannabis farms are in need of different types of equipment such as irrigation systems, trimming tools, protective gear, and so on . As a small business hoping to tap into the industry, you could manufacture or source equipment elsewhere and sell to growers.
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Testing
Testing for quality and safety is a crucial aspect of cannabis production. Small businesses can position themselves to benefit directly or indirectly from cannabis testing.
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Delivery
Another business opportunity startups can take over even without direct involvement in the cannabis industry is delivery. A small business may offer delivery services for marijuana products.
Legislative Benefits
In states with legal or decriminalization laws, small businesses may benefit from industry-related legislation. These legislative efforts may offer access to federal programs and loans for businesses within the cannabis industry.
The Cannabis Small Business Access Act introduced by U.S Senator Jacky Rosen is one example of legislative benefits for small businesses within the industry.
Impact on Workplace Policies
Small businesses already have a lot stacked against them due to limited resources. With state legalizations of marijuana, many businesses are forced to re-evaluate their workplace policies to remain updated with changing laws.
For employers with zero-tolerance regarding drug use, marijuana becomes a challenge as it’s blacked by the law. That affects the businesses in various ways as we can see below.
The Hiring Process
Small businesses, especially those struggling to fill their positions with top talent may have to reconsider their cannabis stance as it’s already becoming difficult to find people who meet rigorous drug-testing criteria.
Safety Issues
Marijuana contains a mind-altering compound called THC, which can affect perception, coordination, and reaction time. That leads to safety concerns in the workplace as well as the quality of input.
Decreased Productivity
Marijuana use may affect the bottom line of a small business through decreased productivity. Some studies have found that the rate of absenteeism is high among employees who use marijuana compared to those who don’t.
Penalty Challenges
In states where marijuana is legal, employers need to be careful with punitive action against employees who use marijuana. The state of California, for instance, has banned discrimination against employees who use weed outside the workplace.
Considering a medical marijuana card in California allows anyone legal access to cannabis as prescription medicine, it’s challenging for small businesses in states like California to navigate the sensitive framework during the hiring, employment, and dismissal process.
Final Thoughts
It’s worth keeping in mind that states have varying marijuana laws which can impact small businesses differently. The type of business you operate also determines how these laws affect you. Hopefully, this article helps you understand the impact of marijuana laws on small businesses.
