The interstate commerce ban forces multi-state cannabis operators to build redundant cultivation and processing facilities in every single state

Federal law prohibits transporting cannabis across state lines, even between two states where it is fully legal. This means a company like Curaleaf or Trulieve that operates in 10+ states must build, staff, and maintain completely separate cultivation facilities, extraction labs, manufacturing lines, and distribution networks in each state. They cannot grow in Oregon (ideal climate, low land costs) and ship to New York (high demand, limited cultivation space). Why it matters: Duplicating full vertical infrastructure in each state requires tens of millions of dollars per market, so only heavily capitalized multi-state operators (MSOs) can compete, shutting out small businesses and minority-owned startups. Because capital requirements are so high, MSOs take on enormous debt loads, so companies like Canopy Growth and Tilray have burned through billions and still report negative earnings. The inability to achieve economies of scale keeps per-unit production costs artificially high, so retail prices in legal markets remain uncompetitive with the illicit market. High retail prices reduce consumer adoption of the legal market, so states collect less tax revenue than projected. Underperforming tax revenue reduces political support for legalization in new states, slowing nationwide access to regulated cannabis. The structural root cause is that the Controlled Substances Act criminalizes interstate transport of Schedule I substances, and no federal legislation has created an interstate commerce framework for cannabis. Even the December 2025 rescheduling to Schedule III does not authorize interstate commerce -- it merely changes the scheduling classification. Each state's regulatory regime is designed as a closed system, and state regulators have financial incentives to protect in-state operators from out-of-state competition.