Legalization vs. Decriminalization: What Cannabis Growing Suppliers Need to Know

The legal environment of the US cannabis growing market – which the Freedonia Group forecasts will expand 12% annually through 2023 – can be difficult to gauge, as almost daily new promises are made and old ones are retracted. A key area of confusion is the difference between marijuana legalization and decriminalization, which is important for suppliers of growing equipment and consumables to understand in order to scale opportunities in legal cannabis markets.

Decriminalization does not allow cannabis production and sales markets to develop.

Legalization and decriminalization often get conflated, but the differences between them are stark. When you hear about states decriminalizing marijuana, this usually refers to reducing penalties for possession and use. In other words, decriminalization reforms do not create a regulatory framework under which legal production and sales operations can be established, meaning that marijuana businesses remain illegal.

Legalization establishes market rules and regulations for cannabis growers, sellers, and users.

Currently, 11 states and the District of Columbia have legal recreational marijuana programs, while 33 states and D.C. have legal medical marijuana programs. More states are expected to legalize marijuana in 2020. Generally, legalization establishes a regulatory framework for the development of marijuana markets (i.e., production, distribution, and sales) in addition to rules for possession and use. However, legal activities vary from state to state; for example, Vermont legalized recreational marijuana growing and consumption years ago, but is still in the process of legalizing retail sales.

Want to learn more?

Cannabis Growing Market in the US from Freedonia’s new series of cannabis market studies features detailed analysis of cannabis laws by state, including the scope of allowable activities for growers and sellers, licensing requirements, and other conditions governing market opportunities in legal marijuana states.