While I am sure we are all fed up with the current presidential election cycle, the upcoming vote in California to approve recreational marijuana has the potential to be a watershed moment for the national marijuana industry and warrants discussion. In addition to California, Massachusetts and Maine both have legalization initiatives on the ballot next month that seem likely to pass. Arizona and Nevada are also voting on recreational marijuana, with polls showing Nevada voters evenly split.

What does this mean?

Market participants are flocking to California in the anticipation of a medical and adult-use marijuana market of $22 Billion in just a few years. The vested interest of these businesses and the state of California will likely demonstrate to our federal legislators that federal laws need to be changed to accommodate the will of the people.

A successful vote in California, along with Massachusetts, Maine and possibly Nevada, will likely signal the true beginning to the end of federal prohibition of marijuana. Ending federal prohibition will still take a herculean effort from industry participants to help craft an appropriate solution that not only addresses industry concerns but the public, health and safety of our communities in a thoughtful manner.

From my perspective, first on the list should be modifying 280E of the IRS tax code to allow for state-legal marijuana business to take business expenses as a deduction. This will free up capital for the industry and allow the industry to be on equal footing with all other legit business in America.