Cannabis companies hoping to become the McDonald’s of legal weed through franchising are running into a big problem: Uncle Sam.
Eight states and the District of Columbia have voted to legalize marijuana for recreational use, and 28 more have approved it for medicinal purposes. But pot is still illegal under federal law and — unfortunately for pot businesses — a product that crosses state lines falls under U.S. jurisdiction.
That means weed companies seeking to expand beyond their native states have to be more creative than a typical consumer packaged-goods seller. To cope, entrepreneurs are mostly using licensing and franchising agreements. A company might provide edibles recipes or branding expertise, for example, without ever shipping pot across state lines.
“We’re trying to find the best way to do it to comply with federal regulations on an industry that’s federally illegal,” said Christian Hageseth,