marijuana regulations

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Marijuana Regulators Tighten Regulations on Cannabis Companies

March 5, 2020

Open your browser to your favorite cannabis news site and you will find state regulators tightening regulations. Their increasingly assertive stance has cannabis companies in flux. The costs of cannabis licenses are exorbitant, but there is some good news for cannabis licensing that could ultimately help businesses save money over the long term. 

Problematic permits and unclear licensing guidelines have been all over the news. It appears regulators are more than willing to work with cannabis businesses to fix the key issues. They are demonstrating a rational stance toward the cannabis market, adjusting rules to meet reality. 

Cannabis Company License Trades

It is still early in the process, but the end result could in better opportunities in the future. We are seeing examples of this all over the country. In Pennsylvania, Harvest agreed to surrender two medical dispensary permits after state regulators alleged the company exceeded the five license cap. 

In Massachusetts, Acreage Holdings, a New York based multi-state operator said in February it would rewrite loan and management agreements with two licensed operators so it would not find itself in violation of state law. Ohio drafted their medical cannabis regulations in 2016 and 2017 at a time were few publicly traded companies. 

Compliance with Cannabis Regulations

Cannabis companies throughout the country should expect similar regulatory scrutiny. In some state cases, agencies could not see the holes in the plan until implemented. As regulators become more knowledgeable about provisions and the implications of their decisions, the process will become more sophisticated. 

Companies will continue to make every effort to comply with rules. However, as the market and regulations adjust, amending cannabis bills will be a frequent political position. Some states still do not want any licenses being sold, but the market will continue to dictate the progress of the industry. The reality of the regulatory issues is a reflection of a maturing cannabis industry similar to other industries.