(WBNG) — Despite New York’s legalization efforts, experts say there are still several challenges that will be facing the nascent industry.
15 states including New York have legalized recreational marijuana use for adults 21 and over; however, the drug is still federally illegal.
Experts told 12 News this poses several problems to consumers but mainly for businesses; some of the main issues include the inability to move marijuana across state lines, a lack of tax deductions as well as a hesitancy by federal banks and lenders to do business with these companies.
Kaelan Castetter, CEO of Castetter Cannabis Group, said Monday the challenges posed by marijuana’s federal status can hinder businesses from expanding.
“Every states marijuana industry is insular, meaning it is confined to the borders of that state, and so you have to grow the product, process the product, transport it, sell it, all in one state, and so that presents a lot of challenges to businesses that are looking to grow and look nationally and be able to distribute their product across state lines,” Castetter said.
He did say the inability to transport products across state lines is a double-edged sword, as the inability for companies to expand outside New York also means non-New York companies won’t be able to expand operations locally.
Castetter said in his opinion, one of the more pressing issues is how the industry is financed. Without traditional financing options, he said companies with more cash on hand gain a leg up, whether these companies are good for the local community or not.