State Lines Make for Complex Legal Cannabis Geography
October 20th, 2022
Interstate cannabis commerce is a future concept making headlines today. Here’s how present-day laws work and limit what a licensed company can do.
If you want a bottle of the best wine in the country, you seek out a vintner from California’s Napa Valley. It’s simple, really. Plenty of places across the nation are inhospitable to cultivating great grapes, so stores and restaurants stock wines from out-of-state regions reputed for their excellence. Unfortunately, the same cannot be said for legal cannabis.
The reason? Cannabis remains illegal at the federal level. For as long as this stays the case, recently signed bills in Oregon and Californiapermitting interstate cannabis commerce are best seen as preparatory measures that hinge on marijuana being removed as a Schedule I narcotic under the Controlled Substances Act.
What does mean, practically speaking, for brands like Glass House? Much like Facebook’s infamous relationship status option, it’s complicated!
Arguably the biggest piece of the puzzle is the challenging reality that any brand operating in multiple states must have a unique presence or licensed partner cultivating cannabis in each of those states. Shipping cannabis by air or ground isn’t allowed, so for a California company, that means only the brand’s products sold in California will feature cannabis from the Golden State.
That creates a challenge when you want to branch out into, say, Colorado, as you won’t be able to bring your California-grown grass with you. Instead, your options are to obtain the necessary state licenses to operate in your state of choice or to marry your branding and identity with a local, licensed partner.
Should you opt for the latter path, be thorough in any efforts to find a partner. Remember, you’re looking for a partner you can trust to execute your vision and act as your local liaison to a given state’s specific cannabis market and its quirks.
In either case, both consistency and quality are of the utmost importance for MSOs or multi-state operators. Far from being limited solely to the source flower being used, other permissible ingredients, packaging requirements, and more can vary wildly between states. This means brands may need to tweak everything from their logos to their recipes in certain states to remain in legal compliance as an MSO.
A major undertaking, certainly, but the rewards can be massive as well.
At a moment when most brand loyalty doesn’t extend past state borders, establishing a name recognizable across multiple markets is a move many top cannabis companies are making their top priority. Whether it’s an MSO that offers THC products in one state and a hemp line nationally or chooses to offer THC-rich products in multiple states, the challenge is sizeable —but so too are the potential rewards.
For as long as cannabis remains a Schedule I narcotic at the federal level, selling California-grown cannabis in markets across the country remains a pipe dream. But if recent remarks from President Joe Biden provide any indication of where things may be heading next, it appears the moment to make an impression before the floodgates open has arrived.
Next article: The Best Halloween Weed Strains.
Zack is a freelance cannabis and culture reporter. He served as San Francisco Weekly’s “Pacific Highs” columnist for six years, covering local equity programs, Bay Area cannabis news, and interviewing everyone from Willie Nelson to Rep. Barbara Lee. His other bylines include the San Francisco Chronicle, Leafly, California Leaf Magazine, The Nib, Vanity Fair, KQED, and Variety. Follow him on Twitter: @zackruskin.