Who Will Get High Off the Marijuana Gold Rush?

Over the past few years, the perennial debate about the legalization of marijuana has become a permanent conversation held at the periphery of medicine, law, and investment. The dialog has been forced there because of THC’s status as a Schedule I drug under the Controlled Substances Act, but was brought into the spotlight when California passed the Compassionate Use Act of 1996.

In many ways, the act was an inflection point. It was the first time a state dodged around the federal position and recognized legitimate medical uses for marijuana. Since then, 20 states (including the District of Columbia) have either adopted medical marijuana provisions of their own or decriminalized the drug. Two of those states — Colorado and Washington — have legalized it at the state level. The drug remains illegal at the federal level.

The debate was given new life in 2005 when the U.S. Supreme Court heard a case (Gonzales v. Raich) that addressed the inevitable issue: what happens when the federal government decides to exercise its authority over a conflicting state law? The short answer is: the fed wins.

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“Today the regulatory environment is, I would say, highly ambiguous,” said Sterling Scott, CEO and chairman of Growlife (OTC:PHOT) in an interview. “You almost need to be a skilled lawyer to navigate a company through it.” Case in point, Scott is a former D.C.-based attorney who concentrated on federal regulatory issues affecting businesses.