In the United States, thirty-three states, Washington D.C. and the territories of Guam and Puerto Rico have legalized some form of medical cannabis, and ten states (Alaska, California, Colorado, Maine, Massachusetts, Michigan, Nevada, Oregon, Vermont, and Washington), Washington D.C., and the Northern Mariana Islands have legalized recreational cannabis. Although cannabis currently remains a Schedule I drug under federal law, the U.S. Department of Justice issued a memorandum (the "Cole Memorandum") on August 29, 2013 to the U.S. Attorneys' offices (federal prosecutors) directing that individuals and businesses that rigorously comply with state regulatory provisions in states that have strictly-regulated legalized medical or recreational cannabis programs should not be a prosecutorial priority for violations of federal law. This federal policy was reinforced by passage of a 2015 federal budget bill (passed in 2014) that prohibits the use of federal funds to interfere in the implementation of state medical marijuana laws. Recently however, the Trump administration (and in particular Attorney General Jeff Sessions) has indicated it may not follow, or may amend or repeal, the Cole Memorandum. This position has added to uncertainty pertaining to cannabis within the United States, and the division of power between the federal government and individual states in this area. Until recently, it was anticipated that the federal government would eventually repeal the federal prohibition on cannabis and thereby leave the states to decide for themselves whether to permit regulated cannabis cultivation and sale, just as states are free today to decide policies governing the distribution of alcohol or tobacco.

Under U.S. federal law it may potentially be a violation of federal money laundering statutes for financial institutions to take any proceeds from marijuana sales or any other Schedule I substance. As such, banks and other financial institutions in the U.S. could be prosecuted and possibly convicted of money laundering services to cannabis businesses. Under U.S. federal law, banks or other financial institutions that provide a cannabis business with a checking account, debit or credit card, small business loan, or any other service could be found guilty of money laundering or conspiracy. Canadian banks are also hesitant to deal with U.S. cannabis companies, due to the uncertain legal and regulatory framework of the industry, and that most Canadian banks have U.S. affiliates. Despite these laws, the U.S. Treasury Department issued a memorandum in February of 2014 outlining the pathways for financial institutions to bank marijuana businesses in compliance with federal law. Under these guidelines, financial institutions must submit a "suspicious activity report" ("SAR") as required by federal money laundering laws. These marijuana related SARs are divided into three categories: marijuana limited, marijuana priority, and marijuana terminated, based on the financial institution's belief that the marijuana business follows state law, is not operating in compliance with state law, or where the banking relationship has been terminated. In the U.S., a bill has been tabled in Congress to grant banks and other financial institutions immunity from federal criminal prosecution for servicing marijuana-related businesses if the underlying marijuana business follows state law. This bill has not been passed and there can be no assurance with that it will be passed in its current form or at all. In both Canada and the United States, transactions involving banks and other financial institutions are both difficult and unpredictable under the current legal and regulatory landscape. Legislative changes to help reduce these challenges would eliminate these challenges for companies in the cannabis space, and would improve the efficiency of both significant and minor financial transactions.

It remains unclear what stance the Department of Justice under the Trump administration might take toward legalization of cannabis in the U.S., but federal enforcement of the Controlled Substances Act and other applicable laws is possible.

Despite the legal, regulatory, and political obstacles the marijuana industry currently faces, the industry has continued to grow.

The following is an analysis of market and regulatory conditions for the marijuana industry in U.S. states:

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Arizona State Summary >>

California State Summary >>

Colorado State Summary >>

Florida State Summary >>

Puerto Rico State Summary >>

Oregon State Summary >>

Washington State Summary >>

Nevada State Summary >>

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Reference
Tidal Royalty Corp.'s Preliminary long form prospectus dated January 29, 2018
Agrios Global Holdings Ltd's Preliminary prospectus dated July 31, 2018