The relationship between the United States and legalized cannabis has been a complicated one throughout history. Unlike other countries, America has held steadfast to the belief that cannabis in any form should be classed as a Schedule 1 drug, putting it at the same level as heroin and LSD. There have been repeated attempts to remove it from that list since the 1970s. However, despite medical cannabis being recognized in 46 states, it is still illegal according to the Controlled Substances Act (CSA). State- and federal-based legalization and regulations surrounding the cannabis industry change from year to year, creating an extra level of difficulty for entrepreneurs looking to enter the field. 

Despite being illegal under federal law, however, this industry is growing exponentially, and it shows no signs of slowing down. Cannabis remains the planet’s most frequently cultivated, sold, and used drug. The U.S. legal marijuana industry was valued at approximately $17 billion in 2020 and created hundreds of thousands of jobs. Because of recent legislation, it will continue to gain the attention of investors and manufacturers alike.

California helped to pave the way for cannabis-based businesses in 1996. The passing of Proposition 215, also known as the Medical Marijuana Initiative or the Compassionate Use Act, permitted the use of medical cannabis in spite of no FDA testing for safety or efficacy. Because the objective was to pass the proposition, there was a lack of focus on regulating who could manufacture or sell the product in the early years. This first crop of entrepreneurs paved the way for future businesses, but they were also the pioneers of an industry that did not yet require extensive product testing or research, farm-to-seed tracking, or government compliance. 

Unlike the wild west of those first years, regulations about cannabis entrepreneurship are now strictly enforced and followed. Customers must meet a select group of criteria to be issued medical marijuana ID cards before they can shop at dispensaries. As a business owner, point-of-sale (POS) and seed-to-sale software are vital to track inventory and stay compliant with state and government laws. Technology also plays a crucial role in security and product protection.