The State of the Cannabis Industry:

Federal Prohibition, State Adoption & California

Federal Prohibition

The movement to end federal prohibition of cannabis made significant strides since April of this year. Former Speaker of the House, John Boehner, said his cannabis position has evolved and he joined the board of a cannabis company. Senate Majority Leader Mitch McConnell introduced The Hemp Farming Act of 2018, which would make hemp an ordinary agricultural commodity. Attorney General Sessions even acknowledged to a senate panel, “there may well be some benefits from medical marijuana” and that is “perfectly appropriate to study” cannabis. Wow! And Trump announced opposition to Sessions “war on marijuana” and indicated he would likely support a bipartisan senate bill that would protect states who have legalized cannabis from federal interference.

BaseCanna believes that cannabis companies operating legally within their respective states are relatively risk-free from federal interference. To learn more about modern federal prohibition, check out our short animation video:

State Adoption

Legal marijuana is a reality. As of August 2018, it’s legal for adults to use cannabis products in nine U.S. states, as well as in the nation’s capital, Washington, D.C. In July, Vermont officially became the ninth state to implement legal recreational marijuana. Thirty-one other states have also approved cannabis for medicinal use, with another dozen states allowing the use of the cannabis for specific medical conditions. And several more states have ballot measures coming up later this year. The latest victory came from, out of all places, conservative Oklahoma. In late June, voters in the state decided to legalize medical marijuana. The implication is clear: Medical marijuana is so popular, even in a staunch red state like Oklahoma, little can be done to stop these kinds of ballot measures. 
 Only 20 states remain where marijuana use is completely illegal. South Dakota, Nebraska, Kansas, and Idaho prohibit all marijuana use, while the remaining 16 allow the use of cannabidiol oil for medical research into its ability to treat epilepsy and other seizure disorders. The states expected to be most likely to propose legislation to fully legalize now include Michigan, New Hampshire, New Jersey, and Rhode Island. Other possible full legalization states include Connecticut, Delaware, and Ohio; medical marijuana proposals were underway or expected in Oklahoma, Kentucky, South Dakota, and Utah. When we look back, 2018 may well be known as the year marijuana legalization won.


California is experiencing the aches and pains of an emergent industry transitioning from a loosely regulated market to a compliant-driven, regulated market. Andy Berman, the CEO of Harborside’s holding company, FLRish, Inc., said it best:

“The transition from a loosely regulated, non-profit market to a fully regulated, for-profit market has been challenging for California’s legacy legal cannabis businesses. High taxes have re-invigorated the illegal market, compliance requirements have reduced profit margins and disrupted the supply chain, testing bottlenecks and failures have taken many popular products out of supply, and delays by local licensing authorities have kept the number of state-licensed growers and retailers at a fraction of pre-1/1 levels.”[1]

While the transition has been predictably challenging many analysts remain optimistic about the promise of the California market. California reestablished itself as the 5th largest world economy in 2017 and will likely reman the world’s largest legal cannabis market for years to come, reaching $7.6B in spending in 2022[2].

What are your thoughts on the state of the industry?

Let us know below! :)

[1] (2018, August 3). California’s Adult-Use Cannabis Market Experiences Growing Pains. Retrieved from

[2] Arcview Market Research & BDS Analytics (2018). The State of Legal Marijuana Markets, 6th Edition. Arcview Market Research.

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