Lengthy Background Checks in the Cannabis Sector Can Delay Business Openings

Once an illicit drug, marijuana is becoming a big and lucrative (and legal) business for many American companies. Currently, 18 states and Washington, D.C. legalized recreational marijuana, which means that marijuana is legal to purchase and use if you are 18 years of age or older. Even more states (38) have legalized medical marijuana. The drug remains illegal at the federal level. Still, because the federal government is not enforcing that law, the state-level legalizations have been able to pave the way for a high-value industry. Per Fortune, legal marijuana sales in the United States are projected to hit $33 million in 2022. 

While the past decade has created mechanisms for businesses to sell cannabis legally, that doesn’t mean the road is easy to travel or that companies can navigate it overnight. On the contrary, background checks in the cannabis sector can take months or even years to process and can present significant delays for entrepreneurs trying to open new businesses.

Take the situation in Oregon, where would-be hemp farmers have been waiting on state-level background checks that are indefinitely stalled. According to a report on the matter from The Herald and News – a local publication serving the Klamath County area in Oregon – state farm regulators are supposed to conduct the background checks that allow farmers to start growing hemp legally. 

Those criminal background checks are part of the Oregon Department of Agriculture’s plan to vet hemp farmers – a plan that the USDA has approved to regulate hemp in the state. As part of that process, Oregon’s Department of Agriculture is supposed to search the FBI national criminal database. 

The challenge is that the FBI has to permit the Oregon Department of Agriculture to access the database, which the federal agency has not yet done. The permission process started the better part of a year ago and was expected to take 4-5 months, which would have made it possible for growers in Oregon to get started with hemp crops this spring. But The Herald and News says it’s been 9-10 months, and the FBI still hasn’t granted the necessary permissions. The result has stalled Oregon’s new hemp licenses indefinitely. 

In other parts of the country, similarly lengthy delays have extended the rollout of new marijuana businesses. For instance, El Dorado County in California approved its first-ever cannabis cultivation farm on May 12, after a year-long application process. County voters approved cannabis operations – including cultivation – in 2018. A company called Cybele Holdings was one of the first applicants to apply to establish a cannabis farm in the county. But, according to the Tahoe Daily Tribune, it took the company “more than two years to get through a county-implemented interim background check process.” The lengthy approval process has drawn criticism from other prospective growers, who have called it “too invasive and extensive,” again per the Tahoe Daily Tribune.

Heavy regulations in the cannabis industry have to do with everything from safety to peace of mind and go beyond the licensing process. In many cases, cannabis businesses are expected to vet their own hires with thorough pre-employment drug screenings and criminal background checks. Failure to follow these industry requirements can put cannabis businesses in jeopardy of losing their licenses – a big deal, given how extensive the licensing process is for these businesses.

At backgroundchecks.com, we are here to help businesses navigate the requirements for background checks in the cannabis sector. We encourage cannabis businesses to read our past coverage about this growing industry or check out the types of background checks we have.