OHIO: Running a marijuana business is more than a pipe dream, says Justin Breidenbach: It’s about taxes, banking, liability, supply and demand.
Breidenbach, an associate professor of accounting at Ohio Wesleyan University who has been studying the economics of pot for two years, concludes that there’s potential for big money to be made if Ohio legalizes pot on Nov. 3. But, he says, marijuana entrepreneurs might go through a minefield to get there.
“There are many misconceptions about how this industry operates,” Breidenbach said. “Many believe this is a new-age gold rush. While some companies are doing well, there are just as many that are struggling to keep their doors open. If Ohio is to legalize marijuana, it is important for people to understand how this industry will operate and navigate the many hurdles to stay afloat.”
Breidenbach visited growers, processors, shop owners and others in the marijuana business in Washington, one of four states plus the District of Columbia where marijuana is legal for both recreational and medicinal purposes. Some Washington businesses are losing money, even going under, in part because of federal tax-code provisions prohibiting tax deductions for expenses related to illegal products, which marijuana is under federal law.