Every state has its own way of disclosing information related to marijuana licenses and the people and businesses holding those licenses. In most states, legislators and regulators decide what information related to marijuana businesses is publicly accessible, and thus, the amount of information available varies greatly from one state to the next.

Cannabiz Media’s Vice President of Government Affairs and Chief Data Officer Ed Keating shared his recommendations for best practices for state disclosure of marijuana license information here on the Cannabiz Media blog in December, and last week, he shared four specific reasons with Oregon Business that making this information available to the public is essential to the marijuana industry overall.

1. Contribution to Local Economy

When information about marijuana licenses and businesses is made available to the public, it identifies which businesses are contributing to the local economy and how much they’re contributing by revealing their tax payments.

In states where the marijuana excise tax is quite high, this disclosure is particularly important as it can have a significant effect on the local economy. For example, Washington publicly reports how much excise tax marijuana license holders pay each month.

2. Visibility for Networking

In the Marijuana Licensing Reference Guide: 2017 Edition, Cannabiz Media explains that rules and regulations limit innovation and growth in the marijuana industry. This includes the lack of information disclosure.

When investors, innovators, and businesses can’t find other individuals and businesses in a specific industry, the networking opportunities that are necessary to fuel innovation and growth are limited. For example, it’s much easier to find marijuana licensee applicants in Alaska where their physical addresses, email addresses, and phone numbers are publicly available versus Oregon where the only information provided to the public is business name, license type, and county where the company is located.

3. Public Trust

Despite the fact that more than half of the states in the U.S. have legalized some form of medical marijuana and nine states have legalized recreational marijuana, there is still a lingering negative perception attached to the industry. By making information about all of the marijuana industry players available to the public, it removes a layer of secrecy that can lead to distrust.

When industries operate under a veil of secrecy, particularly when the secrecy relates to information, people will feel a sense of distrust toward it. The question, “What are they hiding?” will always exist. However, when the veil of secrecy is removed, as it has been in Massachusetts where every piece of correspondence between businesses and regulators in the marijuana industry is public, trust increases. There is no longer a question of what’s being hidden because everything is available to the public.

4. Fraud Prevention

Business transparency in any industry can help to prevent fraud. This includes the marijuana industry, and anything that can be done to further legitimize the industry and remove negative perceptions should be a priority for state regulators.

There have already been a number of instances in different states where marijuana license information played a part in detecting fraudulent activities. For example, in Colorado last year, active marijuana cultivator license holders were caught using those licenses to sell marijuana illegally to the black market.

Benefitting from Marijuana Industry Transparency

Transparency is critical to remove the stigma associated with the marijuana industry, but it’s also imperative for the industry to grow appropriately to meet consumer demand.

By ensuring patients have access to comprehensive information about the businesses they can buy from and ensuring the media has access to the information needed to effectively report on businesses operating in the industry, the marijuana economy will be able to grow organically. However, state governments must remove the veil of secrecy that’s blocking public access to information and data first.

Susan Gunelius, Lead Analyst for Cannabiz Media and author of Marijuana Licensing Reference Guide: 2017 Edition, is also President & CEO of KeySplash Creative, Inc., a marketing communications company offering, copywriting, content marketing, email marketing, social media marketing, and strategic branding services. She spent the first half of her 25-year career directing marketing programs for AT&T and HSBC. Today, her clients include household brands like Citigroup, Cox Communications, Intuit, and more as well as small businesses around the world. Susan has written 11 marketing-related books, including the highly popular Content Marketing for Dummies, 30-Minute Social Media Marketing, Kick-ass Copywriting in 10 Easy Steps, The Ultimate Guide to Email Marketing, and she is a popular marketing and branding keynote speaker. She is also a Certified Career Coach and Founder and Editor in Chief of Women on Business, an award-winning blog for business women. Susan holds a B.S. in marketing and an M.B.A in management and strategy.