Issue 2: If marijuana is federally illegal, how do cannabis businesses do their banking?

COLUMBUS, Ohio (WCMH) -- Ohio voters will decide on Tuesday whether recreational marijuana should be legal for adults, and cannabis companies are already investing in expanding operations in the Buckeye state.

Even if Issue 2 passes and marijuana is legal on the state level for medicinal or recreational use, it remains illegal on the federal level, raising legal obstacles for companies that grow or sell it.

The emergence of those obstacles as more states have begun legalizing marijuana in recent years has given way to a new, niche industry of accounting.

"When I started to talk to companies, they would say "...We're so happy we found you. We went to five different CPAs and they all they all turned their back on us,'" said Derek Davis, a CPA who now owns his own firm called GreenGrowth CPAs. "We're probably one of the largest accounting firms in the US that service the cannabis industry. We have maybe over 700 clients in every legal market."

Under federal law, marijuana is still classified as a Schedule I controlled substance and is therefore illegal. Because U.S banks are insured by the federal government, they cannot bank with businesses that grow and sell marijuana.

According to Davis, some smaller local banks and credit unions are willing to conduct business with companies in the cannabis industry so that they don't have to assume the risks that come with operating an all-cash operation.

Davis said largest obstacle the cannabis industry faces is paying federal taxes. U.S. tax code prohibits businesses that traffic Schedule I controlled substances from deducting business expenses.

"Effectively, what happens is your taxes will go double, triple -- sometimes even quadruple," Davis said. "It puts cannabis companies in a situation where it's very, very challenging to actually generate a profit. And so what invariably ends up happening is a lot of companies will just go out of business."

Davis has observed that companies in states that have tougher licensing standards have better chances of surviving that obstacle because there's less competition. Davis says this will likely remain the case in Ohio if Issue 2 passes.