Five states will decide whether to allow adults aged 21 and older to legally consume marijuana for recreational purposes on Election Day 2016.
The recreational marijuana business is an incredibly lucrative and burgeoning market with room to grow. Revenue projections are pegged around $10 billion by 2018, and at a staggering $21.8 billion in annual sales by 2020. Legal marijuana sales grossed a whopping $5.4 billion in 2015, and are expected to be at $6.7 billion in 2016.
The five states — California, Nevada, Arizona, Massachusetts and Maine — either have medicinal marijuana laws on the books and are voting to add adult recreational use, or are voting on both laws. Passing these laws could mean as much as a $4.2 billion in business between all the states by 2018.
There are some implications for businesses regarding federal regulatory and banking laws that potential business owners must consider if these laws pass, especially: Federal law prohibits banks and credit institutions from accepting money generated from the production and sale of marijuana.
Federal regulators and lawmakers are clear that states cannot create new financial institutions specifically for the cannabis industry.
Every dollar a business makes in cash cannot be put into a bank account. To add on to the woes, there are federal tax issues with revenue generated from marijuana.
Despite these obstacles, sales and profits are rising steadily and many billionaires are throwing money into the mix. Some companies are investing as much as $75 million in marijuana-related business ventures.
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