Marijuana Companies Expanding Across State Lines Have Many Hoops To Jump Through
There is said to be a standard model that one should follow when looking to grow a business out across the country. Develop a solid business plan. Identify your markets. Know the rules. Know your company and your industry. Find a logistics partner to oversee shipping. In the cannabis industry, however, things become complicated and convention is thrown out the window.
We are in the midst of a green rush and companies like Strainz and Zoots are finding that by joining forces scaling is possible. Strainz is a leading national cannabis brand management company. Along with their licensed partners, Strainz is transforming cannabis and creating innovative products. Zoots (or Zootology) is the curator of small batch treats made with premium infused cannabis and paired with unique blends. Together, the two companies have shared manufacturing facilities in Washington and Colorado to consolidate costs, share cutting-edge extraction technology and increase product output.
In the cannabis industry, unlike any other, shipping across state lines is illegal, the rules vary greatly from state to state, and it’s difficult to become intimately acquainted with an industry where the laws are constantly changing and growth is occurring at mock speed.
Many companies are finding themselves in a legal quagmire as they look to expand outside of Colorado, Washington, California, or any of the 26 states where marijuana is legal in some capacity, due to the fact that while marijuana sales in each of those states is legal, it remains federally illegal to ship product across state lines.
Hugh and Chris Hempel, co-founders of Strainz, have been navigating this industry for years now, and have taken their Nevada-based company into three states, simultaneously – something that until now has not been done before. Washington, Colorado and Nevada will all be home to Strainz products.
“Many cannabis companies have terrific product lines but their products may only be available in a single state, as they find scaling to be an arduous and highly capital intensive process,” said Hugh Hempel, Strainz CEO and co-founder. “We want to assist exceptional cannabis companies looking to expand nationally in multiple legal markets where our strategic partners such as Bronnor have world-class production facilities.”
More than 80 percent of Americans support medical marijuana in some form. This general tolerance of a drug that remains classified by the government as a Schedule 1 drug, is working to help swiftly legalize the plant. There are currently 5 states (including Washington, DC), where cannabis is legal for both recreational and medical use, and another 20 states that have legalized medical marijuana. 2016 will prove to be a huge year for cannabis, with 10 states voting on recreational and six additional states voting on medical.
However, the fact remains, that until cannabis use is legalized on a federal level, scaling any kind of business in the industry, outside of a one-state operation, will continue to pose huge challenges. Companies who operate with transparency and a cooperative spirit will make great gains in an industry riddled with red tape.