Despite there being a huge supply of cannabis thanks to excellent growing conditions and lot of expertise and knowledge, any extra product is legally restricted to each state’s borders because of the federally sanctioned use of marijuana. However, It’s an open truth that some licensed farmers have sent goods to the out-of-state illicit market to stay afloat in Oregon. The state’s top cannabis regulator recently issued a warning about an existential crisis in the marijuana business.
Most cannabis companies in California are struggling with millions of dollars in outstanding debts, and some have had to shut down their cultivation operations. On the West Coast, producers deal with what many refer to as the disastrous economics of legal marijuana.
Nobody in the sector believes that a divided Congress will step in to help by legalizing the substance, enabling marijuana businesses to deduct expenses, or even just loosening banking prohibitions that usually prevent them from accessing loans or credit. Instead, some people are placing their bleakest hopes — and dreams — in the presidency of Joe Biden, which they believe will open the door to marijuana trading across states that have authorized the drug’s use. As a result, they contend, the West Coast might assist in supplying the rest of the nation thanks to its hospitable climate and clean, inexpensive hydropower for indoor cultivation.
According to Attorney General Merrick Garland’s testimony before the Senate last month, the Justice Department will soon announce a new marijuana policy that will largely follow the “Cole Memorandum” of 2013, which stated that as long as specific legal priorities were met, the federal government would not intervene in state marijuana regulation initiatives.
Experts on drug policy predict that the new approach won’t go as far as allowing interstate trade.
However, lawmakers in Washington State enacted a “trigger bill” last week that gives the governor the power to enter into interstate marijuana commerce agreements should the federal government permit it. This legislation was fashioned after similar measures that have already been passed in California and Oregon.
A state’s market structure has an impact on how its industries are currently performing as well as how they might perform should enterprises be permitted to sell outside of the state.
Colorado and Washington were the first to legalize recreational cannabis in 2012. Many of the early laws Washington passed to fend off the Justice Department, such as those limiting the size of expanding facilities and prohibiting out-of-state investment, are still in effect.
Some smaller producers have prospered as a result. However, legislation might impede those looking to compete across state borders with bigger, more effective producers from California and Oregon, who operate with fewer restrictions. Large producers in Oregon have attained certain economies of scale that may offer them an advantage in a larger market. However, the state’s overstock is currently regarded as the worst in the country.
The opening of interstate commerce involving marijuana would open up interesting possibilities for entities which are in the business of providing supplies to cannabis industry actors, such as Advanced Container Technologies Inc. (OTC: ACTX).
NOTE TO INVESTORS: The latest news and updates relating to Advanced Container Technologies Inc. (OTC: ACTX) are available in the company’s newsroom at https://cnw.fm/ACTX
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