Medical marijuana is legal in 23 states. Nine more states—including Pennsylvania—have medical marijuana legislation pending. The legal marijuana industry is big and growing rapidly; it is projected to generate annual revenues of over $8 billion by 2019. Given this rapid growth, many entrepreneurs are exploring entering the market. These would-be marijuana growers, processors or distributors quickly learn, however, that the legal marijuana industry poses unusual challenges. Some of these challenges are discussed in this article.

Legal Marijuana is Illegal

Perhaps the oddest aspect of operating a marijuana business sanctioned under state law is that the business is nonetheless illegal under federal law. The federal government classifies marijuana as a Schedule I controlled substance, meaning it has a high propensity for abuse and no medical use. As a result, marijuana is illegal under the federal Controlled Substances Act (CSA). Even in states that have legalized medical marijuana, its cultivation, production, distribution,...