Marijuana (or cannabis) is big business in states that have legalized the herb's recreational use, despite its federal status as a Schedule I controlled substance. The federal government has mostly not intervened in states that allow legal marijuana businesses, but its ambiguous legal status creates unique legal challenges and an uncertain future.
States that have given recreational marijuana the green light have drafted their own regulations for businesses hoping to break into the industry, typically in different stages of implementation. Additional states are likely to follow, which may prompt more conclusive federal action.
Summaries of state laws and regulations affecting legal marijuana businesses serving the recreational cannabis industry are listed below. See Medical Marijuana Laws by State for more information about medical-specific regulations and FindLaw's Marijuana and Other Highly Regulated Businesses section for additional resources.
Recreational marijuana was legalized in Alaska through a ballot initiative in 2014. The initiative removed penalties for adults who use or possess marijuana (also allowing for home cultivation), with the regulatory framework for businesses expected to be up and running in 2016. The Alaska Marijuana Control Board is responsible for enacting regulations for the cultivation, processing (edibles, tinctures, etc.), and retail sales of marijuana.
Highlights of Alaska's regulations (still in draft form as of October 2, 2015) include:
In 2016, California voters passed the Adult Use of Marijuana Act, which made it legal for adults 21 and over to purchase, possess and consume up to 1 oz. of marijuana in their private residence or in a licensed establishment. The unlicensed sale of marijuana is a crime punishable by up to 6 months in county jail and/or a fine of up to $500. Selling marijuana without a license will also result in civil penalties of up to 3 times the amount of the license fee for each violation. The Bureau of Cannabis Control is the lead agency in developing regulations for medical and adult-use cannabis. Please note that a local city/county license is also required, and a state license will not be issued if it's in violation of local laws or regulations.
Highlights of California's regulations include:
Colorado, which legalized recreational marijuana in 2012 through a ballot initiative, was the first to enact regulations for retail marijuana shops and related businesses on Jan. 1, 2014. The Marijuana Enforcement Division (MED) handles licensing and enforcement of legal marijuana business regulations. Other states are using Colorado's legal marijuana regulations as a template.
Highlights of Colorado's regulations include:
District of Columbia
Washington, D.C. removed criminal penalties for the possession, transfer, and cultivation of up to two ounces of marijuana for adults 21 and older on Feb. 26, 2015. It's important to point out, though, that much of the District of Columbia is federal land, which means these federally controlled areas are subject to federal drug laws. Also, the ballot initiative legalizing recreational marijuana in the nation's capital does not authorize retail sales. Adults may grow up to 12 plants (only six being mature), but may not sell to others.
This means D.C. does not grant licenses for marijuana businesses involved in cultivation, product manufacturing, retail sales, or testing -- but that is likely to change. For now (as of Oct. 2, 2015), legal marijuana business in D.C. is limited to retail sales of marijuana accessories (such as pipes and grow equipment) but nothing involving the plant or its derivatives.
By a ballot initiative in 2016, voters in Massachusetts approved Question 4 legalizing the recreational use of marijuana. Under the law, effective on December 15, 2016, adults (21 years of age or older) can possess up to 1 ounce of marijuana outside of their residence and up to 10 ounces within their residences. It also allows adults to grow up to 6 marijuana plants in their residences and to give up to 1 ounce of marijuana to another adult without payment. The initiative also created the Cannabis Control Commission to, among other things, oversee licensing of marijuana commercial establishments.
Highlights of Massachusetts' regulations include:
By a popular state vote in November 2016, the residents of Nevada approved a ballot initiative legalizing recreational use of marijuana. Adults (21 years of age or older) may purchase, cultivate, possess, or consume either up to 1 ounce of marijuana or up to 1/8th of an ounce of concentrated marijuana. Adults are also allowed to grow up to 6 marijuana plants in an area that is equipped with a security device (such as a lock) and they can only grow marijuana if there isn't a state-licensed retail marijuana store within 25 miles. The Nevada Department of Taxation is in charge of regulating marijuana-related businesses and licensing.
Highlights of Nevada's regulations include:
Recreational marijuana became legal in Oregon on July 1, 2015, and legal marijuana retail shops opened their doors on Oct. 1 of the same year, nearly one year after voters approved a ballot initiative. Adults (21 and over) are permitted to grow up to 4 plants on their property, possess up to 8 ounces of marijuana in their homes, and up to one ounce on their person. The Oregon Liquor Control Commission License accepts applications for recreational marijuana licenses.
Highlights of Oregon's regulations include:
Voters in Washington approved a ballot initiative legalizing the recreational use of marijuana in 2012, and recreational sales to adults 21 and older (at existing medical marijuana dispensaries) began on July 8, 2014. Unlike laws in other states that have legalized the recreational use of the herb, Washington strictly prohibits the personal cultivation of marijuana, which is still a felony in the state.
Washington grants a limited number of licenses for legal marijuana businesses. Visit the Web portal for the Washington State Liquor and Cannabis Board to learn more about eligibility, procedures, and other details.
Highlights of Washington's regulations include:
Get Legal Help With Your Marijuana Business
As you can see, laws relating to recreational marijuana are fluid and subject to change each election cycle. This often results in a tricky regulatory environment for marijuana-related businesses, especially considering the ever-present risk of violating federal laws. You can stay ahead of the curve and receive assistance navigating these new laws by reaching out to an experienced business law attorney to learn more about the latest marijuana laws in your jurisdiction.