This paper reviews functions undertaken in marketing of forest products (poles, posts, timber, firewood and charcoal), policy challenges arising and possible solutions to the problems. The focus is on Kakamega forest found in western Kenya, the activities of the forest adjacent dwellers, and how their activities relate to the current forest law and policy. The approach taken involves looking at individual functions namely; acquisition, or buying, selling, storage, transportation, processing, standardization, financing, risk bearing, and market intelligence. It was realized that each function reveals specific policy challenge(s) and this could be arising due to lack of specific laws on marketing functions in the current law and policy. In addition, negative impacts which include loss of revenue, conflicts, high enforcement cost, and distortion of forest products markets and over extraction are also noted. Mixes of policy options are necessary to overcome the challenges. A review of the current law and policy is necessary if the forest has to continue providing services now and for posterity. Forest policy formulators should move towards creating laws and policies that address specific issues in marketing.