5 Major Challenges Legal Marijuana Businesses Face In The United States


The growing cannabis and marijuana industry faces a rather peculiar dichotomy. While it has been legalized and ratified by a majority of the states, it is still under the ‘Controlled Substances Act’ regulation of the Federal Government. This means that at the state level, there is complete legality, but at the federal level, the same is still illegal.

This creates a lot of problems for businesses in the industry. Even though they are allowed to open legal stores, online platforms and offer sales, but federal stipulations still make them out of reach for formal banking institutions.

In this article, we are going to look at five major challenges that legal marijuana businesses face in the United States. If you are someone who is looking to start a new business in this niche, you should read the article till the end.

List of 5 Major Challenges Legal Marijuana Businesses face in the United States

1. Non-availability of Formal Banking Services-

Most banks do not want to engage with high-risk merchant accounts like CBD businesses, crypto exchanges, casino platforms, and so on. The absence of formal banking structures and processes has been one of the major hindrances for the industry that has always been kept out. This means that marijuana bankings solutions are something that is not easily available.

2. Increased Dependency on Cash-Only Transactions-

Dealing in cash is never a good idea for any business. For starters, it makes the entire operation far more susceptible to becoming corrupt. Secondly, it also invites the attention of burglars and anti-social elements looking to break into such locations and steal the cash. Lastly, it creates a lot of pressure when it comes to filing taxes, and securing other permits for the business.

3. Lack of Professionals in the Human Resource Area-

Given the kind of stigma that is attached to this industry, businesses face a dead-end when it comes to attracting the right talent and professionals. Everyone has an idea about a marijuana dispensary being a place where all employees smoke up and chill. However, just like any other business, it requires marketing professionals, sales reps and more to sustain and succeed.

4. Classification as a Drug under the Controlled Substances Act-

Every business in the industry wants to sell its products to the biggest audiences, However, since marijuana and cannabis are still classified as a drug under the Controlled Substances Act, it cannot be sold in and around public housing societies. This presents a major challenge in terms of taking the product to target audiences for sales purposes in states where it’s legal.

5. The Attitude of Law Enforcement, Banking, and Other Authorities-

There is no doubt that businesses that operate in this niche are still considered to be shady. Even though formal state legislations have overturned bans, the attitudes that are set for so many decades refuse to go away. Most law enforcement authorities, banking professionals, and other legal stakeholders display a certain type of behavior towards marijuana businesses.

What can Marijuana Businesses do to Overcome Challenges?

The above are some of the tangible challenges that plague marijuana businesses. The first thing that the business needs to do is find a credible financial partner for payments processing.

There are some credible start-ups in the industry like Paybotic that are offering end-to-end payment solutions for businesses in this niche.

You also need to work with a trained and experienced legal counsel that can help you defend your case in front of authorities. As a marijuana business, you might be getting a lot of flak from different quarters.

To ensure that you are not getting into any difficulties, it would be best that you always have legal counsel helping you.

The Bottom Line

The industry is set to grow in double digits in the next few years. Being on top of your financial and legal game can help you scale your business convincingly. If you have any other questions, you would like us to answer, let us know in the comments section below.


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