Final answer:
The federal government can impact MM distributors through regulatory restrictions, such as bureaucratic requirements, fees, and zoning laws, which act as barriers to entry and can discourage hiring and business expansion.
Step-by-step explanation:
The federal government can make life uncomfortable for MM (medical marijuana) distributors primarily through regulatory restrictions. These restrictions can involve various forms of bureaucratic red tape such as requiring multiple permits, imposition of fees, and limiting the types and quality of products that can be sold. Additionally, they may enforce zoning laws that restrict where businesses can operate and their hours of operation. This can discourage businesses from hiring, affect the cost of production, and ultimately impact the supply curve. Contrary to increased taxation, subsidies, or market incentives, regulatory restrictions can act as a government-enforced barrier to entry, making it challenging for new businesses to start and existing businesses to expand.