The business problems occurring with the legalization of marijuana in Essay

The business problems occurring with the legalization of marijuana in the US - Essay Example However, businesses entering the recreational market are having trouble since marijuana is still illegal on a Federal State. This paper expounds on issues that businesses are having when entering the recreational marijuana business. In 1970, a law was passed by the US Congress to group marijuana under Schedule I drug jointly with other drugs such as heroin and cocaine (Stinson, 2015). Notwithstanding, Stinson (2005) notes that a total of 23 States in the US as well as the District of Columbia have gone ahead to legalize its use. The divergence of State laws and Federal laws have had significant effects on businesses entering the marijuana market. According to an article by Stinson (2015) published in the PEW Charitable Trusts website, banks have been reluctant to associate themselves with clients engaging in marijuana businesses. Banks play an important role in any business. Banks, according to Babb (2009) are the source of funds for businesses in form of loans. Marijuana business is not less important in this perspective. The fact that banks are declining to engage in business with people dealing with marijuana denies them access to funds. Lack of funds translates to inability to expand the business and also i nability to access products associated with the business on credit. Other than banks, individuals can access loans or funds from family members and friends. Under both the Federal and State laws, an individual cannot finance or invest in marijuana business if he or she is from another State particularly in States where possession of marijuana is illegal. This further curtails the ability of businesses entering the marijuana business from acquiring prerequisite funds. As an illustration, Wolf (n.d, p. 5) asserts that "Private lending is difficult in Washington by virtue of the Washington State Liquor Boards requirement that all financiers be Washington residents". Economic problems in the modern world have made it difficult