While political division in Congress continues to serve as a roadblock to the passage of federal legislation legalizing cannabis in the United States, cannabis franchises are continuing to push forward with expansion. Currently, the Marijuana Opportunity Reinvestment and Expungement Act (MORE Act) is pending before the Senate, but similar bills have failed in the past. The growth of the legal cannabis industry in the United States through franchising could help spur legislative action, but at this point, significant uncertainty remains—this is true even in New York where recreational use has been legalized at the state level. Here are some more insights from New York City franchise lawyer Jeffrey M. Goldstein.
Cannabis Franchises are Pushing Forward in New York and Other States Across the Country
As discussed in a recent Franchise Times article, several cannabis franchises are targeting growth in New York and other states across the country. This includes not only other states that have legalized recreational marijuana but also states that only have medical marijuana laws on the books and those that have adopted policies of decriminalization. According to the article, one of the main perceived benefits of the franchise model in this sector is that franchisees can rely on their franchisors keeping up-to-date on the latest legal developments. For example, the article quotes one franchisee as saying:
“Being on your own, any time there’s a law change, it can send you into a panic mode. . . . Unity Rd. [a cannabis franchisor] tells us ‘hey guys, this is just part of the industry.’ They do a good job of keeping our blood pressure to a normal level.”
But, while it may be good for franchisees to keep their blood pressure down, the reality is that most franchisors do not take responsibility for their franchisees’ legal compliance. This is true even in heavily regulated industries such as medical and recreational marijuana. While franchisors may (or may not) provide their franchisees with timely updates, it is up to franchisees to comply with the law—and of course, if the law changes, it is franchisees whose businesses will be at risk.
Buying a Cannabis Franchise Continues to Present Unique Risks for Franchisees
We discussed the risks of buying a cannabis franchise previously, and all of these risks remain relevant today. While these risks may be mitigated to an extent in states like New York that have adopted strong stances in favor of legalization, the fact remains that legalization is a hotly debated and highly politicized topic—and the sale of marijuana for any purpose remains illegal at the federal level. As a result, while the cannabis industry offers significant opportunities, prospective franchisees still need to weigh these opportunities against the significant risks involved.
Request a Free Consultation with New York City Franchise Lawyer Jeffrey M. Goldstein
Are you thinking about opening a cannabis franchise in New York? If so, we encourage you to contact us for more information. Please call 202-293-3947 or contact us online to arrange a free consultation with New York City franchise lawyer Jeffrey M. Goldstein.
This article is provided for informational purposes. Goldstein Law Firm does not recommend or endorse any individual franchise opportunities.