6 ways new federal bills would protect California cannabis consumers, businesses

March 30, 2017 

Updated 11:12 p.m.

Hemant Lata, left, and Suman Chandra work at a federally-approved medical marijuana facility at the University of Mississippi in Oxford in 2014. (File photo by Lance Murphey, The New York Times)

Federal legislators are working on a cluster of proposed laws aimed easing the growing conflict between state and federal marijuana laws, with a number of protections and new regulations that could impact cannabis consumers and businesses in California.

Cannabis remains illegal at the federal level, though medical marijuana is now legal in 28 states and recreational cannabis is allowed in eight. So even though state law says Californians can now smoke weed and give some to a friend, they still risk criminal prosecution by federal authorities and can be denied benefits such as subsidized housing. People who own cannabis-related businesses also face federal raids and can’t access most banking services or claim standard tax deductions. And researchers also have a tough time getting access to study cannabis because the plant remains illegal under federal law.

Oregon Democrats Sen. Ron Wyden and Rep. Earl Blumenauer aim to change all of that in one fell swoop with the “Path to Marijuana Reform,” a package of bills introduced Thursday in both houses.

Also included in the package is the reintroduction of legislation from Rep. Jared Polis, D-Colorado, to regulate marijuana like alcohol.

The bills would remove marijuana from a national registry of controlled substances and add a slew of new protections for consumers and industry workers. Wyden said the new rules could spur industry growth and investment, which have been hampered by the looming threat of a federal crackdown – a threat that's gained traction since long-time marijjuana opponent Jeff Sessions became Attorney General.

The bills would also create a new federal tax on all cannabis products that would start at 10 percent and escalate to 25 percent. And marijuana businesses would be required to get federal permits to operate, with new rules on advertising, labeling and more.

The proposed bills drew quick praise from supporters of marijuana legalization, who argued that such reforms will bring federal marijuana laws more in line with public opinion and state policies.

“States are clearly realizing the benefits of regulating marijuana, and we are glad to see a growing number of federal policy makers taking notice,” said Aaron Smith, executive director of the National Cannabis Industry Association.

Opponents of legal marijuana expressed concern about Wyden and Blumenauer’s legislation, claiming the emerging industry is focused on profits and not public health.

“We need to end, not expand, the special interest big marijuana lobby,” said Kevin Sabet, a former White House drug policy senior adviser who now heads Smart Approaches to Marijuana.

Most policies in the bills have been proposed previously in some form, though they’ve never gotten past initial committee hearings. And that was before Republicans controlled both the House and the Senate.

But Wyden and Blumenauer pointed out in a joint statement that public support for cannabis legalization has never been higher, with the Democrats’ package of bills drawing early support from both sides of the aisle.

Here are six ways the federal bills would impact Californians and residents in other legal weed states if they become law.

1. Add criminal protections: Federal agents could no longer arrest people who are complying with their state’s cannabis laws and slap them with fines or jail time. The feds also couldn’t raid state-legal pot shops and seize their assets. No one could be deported or denied entry to the country for consuming weed in state where it’s legal. And Native American tribes would be protecting from punishment under federal marijuana laws.

2. Open bank access: Banks and credit card companies that handle marijuana funds would get immunity from federal criminal charges. That should help the industry move away from operating all in cash, since financial institutions would no longer have to worry about being penalized for money laundering if they take on cannabis clients.

3. Remove obstacles for research: A new process would make it easier for researchers to study medical marijuana by reducing approval wait times, costly security measures and layers of review that experts say stifle the number and quality of studies now taking place. And once researchers get approval, it would be easier for them to access marijuana for use in their studies. That should increase the volume of rigorous trials involving cannabis.

4. Eliminate tax restrictions: Marijuana retailers would be able to claim tax deductions and credits like any other business. That’s because the bills would make an exception for marijuana in IRS tax rule 280E, which says businesses dealing in Schedule I or II substances can’t write off common expenses such as rent, utilities or advertising. That should save businesses significant money each year.

5. Clear criminal records: Anyone with a federal charge for a marijuana-related activity that was legal in their state at the time or who was charged with possessing an ounce or less of marijuana could petition to have their records cleared. California’s Proposition 64 included a similar provision, though it could only apply to state charges.

6. Allow for federal benefits: People in legal weed states could no longer be drug tested for marijuana when applying for a federal job or denied access to subsidized housing. College students couldn’t be turned down for financial aid because they have minor marijuana offenses on their record. And health care workers at Veteran Affairs clinics could recommend medical marijuana to veterans.

Staff writer Alicia Wallace contributed to this report.

Dr. Stuart Titus, CEO Of Medical Marijuana Inc., Talks About Running "A Company Of Firsts"

By Nick Hilden | Mar 7, 2017 | C-Suite, Cannabis Investing


Dr. Stuart Titus is the CEO at Medical Marijuana Inc. (OTC: MJNA, OTCMKTS: MJNA), which has been pushing the boundaries of the medicinal space for nearly a decade. The company produces a range of hemp CBD oil products.

For starters, what makes your company different from others in the cannabis space?
We are a company of firsts – we were the first public company in the space in March 2009, the first to develop a natural botanical hemp-based CBD nutritional supplement, the first to legalize a cannabis-based product into a Latin American country (Brazil, April 2014), the first to legalize a cannabis based product into Mexico, and the first to develop a cannabis based product that qualifies for World Anti-Doping Standards.

How did you get into the cannabis space?
I entered this space via my physiotherapy career – I saw numerous athletes using cannabis to relieve pain, control inflammation, or just to help “get into the zone”. So I started attending medical cannabis symposiums to see if there was any real science behind this, and my eyes were opened to a new world of cannabis-based therapeutics.

Walk us through a normal day.
It starts with meetings with sales associates followed by meetings with management on product innovation, formulation. Next, media requests and developing presentation materials, then reading up on the latest clinical studies. From there I check the performance of our stock, our pharma partner’s stock, and other stocks in the space. Then I look at our international business, look at methods of streamlining out existing business, and work with our main investors and financiers to develop improved laboratory operations. This often involves discussing product formulations with existing and potentially new formulators. Some days involve participating in board meetings, preparing quarterly financial reports, speaking on company conference calls and representatives’ podcasts, and speaking with doctors interested in CBD.

What has been your biggest lesson about working in cannabis, and in business in general?
When it comes to business in general, extraordinary patience can be a virtue. As far as cannabis goes – never take anything for granted

What do you see as your biggest opportunity?
To revolutionize neurological medicine, educate doctors as well as lay people about the therapeutic benefits of cannabis, change the way we think about cannabis, develop a national dialogue regarding cannabis, and – on a personal note – to retire someday.

Do you have any thoughts or concerns about Sean Spicer’s statements indicating the Administration’s intention to crack down on recreational cannabis?
None at all, I consider it a smokescreen to distract from other happenings.

What sets you apart to make you a potential leader in cannabis?
My in-depth knowledge of the science and research, and that we are actually doing it. We currently have two divisions in pharma development, and are the first to do so.

What is the most frustrating aspect of the cannabis industry today?
Everyone wants to make a quick nickel instead of a slow dollar

What would you say to those who are considering investing in your company?
We are a diversified portfolio company with 4 divisions in nutraceutical sales. We have two investment companies in pharmaceutical development. The trends toward legalization of cannabis are unmistakable. The international acceptance of cannabis and CBD products is growing. The ability to grow hemp here in the US is a compelling business opportunity. With legalization, our company plans to enter into the THC space. We would potentially have multiple sources of revenue in the future. There is excellent investor interest in the space at this time.

What are the biggest challenges of being a publicly offered cannabis company?
The reporting requirements are staggering in terms of manpower, hours, and expense. It’s also a challenge to separate inside information from public information.

What advice would you give to anyone looking to get into the cannabis space?
This is potentially one of the greatest growth industries in America. The magnitude and impact of this could be bigger than anything previously seen. We can move toward a sustainable, renewable economy with jobs for all.

What are your biggest tips for branding cannabis?
Separate yourself from the crowd through innovation.

Do you see any big changes coming in the future of cannabis?
There will be more cannabinoids, and more acceptance of botanical cannabis. The US will follow Canada in allowing licensed producers. The US will also follow Canada in terms of full recreational legalization.

Do you consume cannabis? And if so, what's your favorite way to consume?
Yes, at least 50 mg of CBD daily. In the morning I take RSHO Blue. Through the day, Revive Pro. At night, RSHO Green. And I apply a topical salve daily. Occasionally I’ll enjoy a THC edible.

Marijuana Companies Stuck Doing Business the Old-Fashioned Way, in Cash

Colorado pot firms are still largely shut out of the banking sector, meaning they have to use armored trucks, security to ferry currency

By 

YUKA HAYASHI

March 31, 2016 5:30 a.m. ET

DENVER—Two years after Colorado fully legalized the sale of marijuana, most banks here still don’t offer services to the businesses involved.

Financial institutions are caught between state law that has legalized marijuana and federal law that bans it. Banks’ federal regulators don’t fully recognize such businesses and impose onerous reporting requirements on banks that deal with them.

Without bank accounts, the state’s burgeoning pot sector—2,500 licensed businesses with revenue of $1 billion a year, paying $130 million in taxes—can’t accept credit or debit cards from customers, Colorado officials say.

Marijuana-related businesses instead use cash to pay their employees, purchase equipment or pay taxes to the state. Reports abound of business owners refurbishing retired armored bank trucks to transport money and hiring heavily armed security guards.

“I am concerned and we do hold our breath from a public-safety perspective,” said Colorado Attorney General Cynthia Coffman. A Republican, she opposed the 2012 ballot referendum that legalized marijuana. But she is now trying to persuade federal regulators to allow banks to do business with Colorado companies handling the drug.

Pot displayed for sale at a dispensary in Denver. The industry and some lawmakers are urging federal regulators to issue clear guidelines for banking services to marijuana businesses. PHOTO: ASSOCIATED PRESS

Lacking that clearance, “there are large amounts of cash floating in the system that makes money laundering very easy,” Ms. Coffman said in an interview. “I believe it fuels the interest of cartels and traffickers in coming to Colorado and doing business. We definitely have seen an uptick in that activity.”

Other states that have legalized recreational marijuana share similar concerns. On March 27, four Democratic senators from three states pressed federal financial regulators to issue clear joint regulatory guidelines for banking services to marijuana businesses. The letter was sent to six banking agencies.

Federal law classifies marijuana as a top-tier illegal controlled substance.

The latest disappointment for Colorado officials came in January, when a federal judge dismissed a lawsuit filed by a credit union established with the help of the state to serve the cannabis industry that sought approval from federal banking regulators to set up a “master account.” Such an account is essential for financial institutions to do business with other banks and serve customers by taking deposits or issuing credit cards.

The judge said an order to overturn the banking regulators’ decision would “facilitate criminal activity.” He described the current situation as “untenable” and said he hoped “it will soon be addressed and resolved by Congress.”

The solar energy and cannabis movements in the U.S. are uniquely tied to a community in Northern California. Now, an idealist businessman at the center of the two industries is looking to create an eco-tourism center that highlights their intertwined history. Photo/Video: Jake Nicol for The Wall Street Journal

Last April, Rep. Ed Perlmutter (D., Colo.) introduced legislation that would provide a “safe harbor” to banks working with marijuana businesses by prohibiting federal regulators from terminating or limiting their deposit insurance coverage, among other steps. The bill and others like it have languished.

The Obama administration has issued some guidelines for banks that choose to deal with marijuana businesses in states where it is legal. In a 2013 memo, the Justice Department indicated it wouldn’t challenge states’ marijuana laws as long as they don’t conflict with its enforcement priorities.

The Treasury Department’s Financial Crimes Enforcement Network, or FinCen, implicitly suggested that it didn’t consider banks’ dealings with marijuana businesses illegal in states like Colorado by laying out rules saying financial institutions can conduct such transactions as long as they file “suspicious activity reports.” These are forms banks are generally required to file when they face a suspected incident of money laundering or fraud, a process that can be complex and costly.

The Justice Department and Treasury rules have had only a limited impact, because they don’t absolve banks from rules set by other federal agencies.

Still, those guidelines have been enough to encourage a small number of community banks and credit unions in Colorado to start offering basic banking services to marijuana businesses.  Andrew Freedman, director of marijuana policy coordination for Democratic Gov. John Hickenlooper, declined to say how many, saying most preferred to keep a low profile.

Write to Yuka Hayashi at yuka.hayashi@wsj.com

Marijuana Companies Stuck Doing Business the Old-Fashioned Way, in Cash

Earl Blumenauer ICBC San Francisco 2016

The marijuana effect

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Le sfide in Usa per avviare un business sulla marijuana

Nel 2010, Jake George provo' ad individuare un mercato che aspettava di essere considerato e si concentro' tutto su una nuova impresa: insieme a sua moglie Lydia, venduta la maggior parte dei propri beni, si trasferirono un un appartamento piu' piccolo nello Stato di Washington e investirono 10.000 Usd per finanziare GreenLink Collective.
L'iniziativa ha dato buoni risultati. Le vendite raddoppiavano ogni anno -dice George- e la sua donna apri' una succursale. Sarebbe una classica storia di piccoli negozi, se non fosse che Heorge vende marijuana.
L'erba e' legale in meno della meta' del territorio statunitense pur continuando ad essere illegale per la legge federale. E ammantata di pregiudizi culturali nonche' associata con altro in modo polemico, ma una quantita' crescente di imprenditori in Usa, come George, stanno trasformando la marijuana in un grande business.
Molti sono stimolati da impulsi missionari sui benefici medici di questa droga o da una passione per il suo uso ricreativo. Per altri invece e' come una grande opportunita' imprenditoriale, e sono convinti che nel mercato la domanda crescera' e le preoccupazioni diminuiranno.
I difensori di questa industria stanno gia' facendo previsioni ottime. Il guadagno annuale da marijuana, per il 2018, potrebbe oscillare tra 4.500 e 6.000 milioni di Usd in tutti gli Stati Uniti, un forte aumento rispetto ai 1.300/1.500 milioni di Usd del 2013, secondo alcune proiezioni di MMJ Business Daily, una pubblicazione online che si occupa delle aziende.
ArcView Group, una rete di investitori con sede in San Francisco e che e' specializzata nell'industria della cannabis, stima che il mercato statunitense di marijuana legale crescera' del 64% a 2.340 milioni di Usd nel 2014, e nei successivi cinque anni arrivera' a 10.00 milioni di Usd.

“Senza dubbi si puo' guadagnare soldi”, dice Beau Kilmer, codirettore di RAND – Drug Policy Research Center, un'organizzazione di ricerca senza scopo di lucro che studia temi e tendenze relative alle droghe. Sommando le vendite legali ed illegali, stima che “l'attuale spesa al dettaglio per la marijuana in Usa e' di decine di migliaia di milioni di dollari”, e “si prevede che un mercato completamente legale generera' migliaia di milioni di dollari di introiti”.
Ma Kilmer -e alcuni funzionari statali- sostengono che e' impossibile prevedere un mercato cosi' ancora poco sperimentato. Gran parte del consumo attuale di marijuana illegale riesce a far guadagnare coltivatori e venditori pur col rischio di arresto e carcerazione. E scomparira' se si legalizza -dice Kilmer. E se la marijuana potra' essere coltivata apertamente, come altri prodotti agricoli, i prezzi caleranno di piu' con le economie di scala. “In questo momento, nessuno sa nulla con certezza”.
Nel frattempo, gli imprenditori della cannabis devono affrontare ostacoli che altri business avviati non conoscono. Banche, padroni di casa, leader della comunita' -incluse le famiglie degli imprenditori- spesso disapprovano queste iniziative. E' difficile che questi business trovino i luoghi in cui operare, ottenere il denaro di cui hanno bisogno nonche' sentirsi completamente sicuri nel business stesso.
Attualmente, 20 Stati e il Distretto di Colombia consentono in Usa l'uso della marijuana a fini medici, e ci sono iniziative in corso per la legalizzazione in altri luoghi, incluso lo Stato di New York. Ma in Colorado e Washington sono andati piu' avanti con il progetto di trasformare la cannabis in una industria di massa.
I difensori della marijuana in questi due Stati valutano che ci sara' una gran quantita' di consumatori che rispondera' agli sforzi del mercato. Molte persone estranee a questo ambiente sono gia' entrate nel business, sostengono alcuni impresari industriali. “In realta' e' affascinante la quantita' di investitori che oggi chiedono di esser parte di questo ambito. Molti lo vedono come la prossima grande industria statunitense”, dice Jay Czarkowski, cofondatore del dispensario di marijuana medica Boulder Kind Care e attualmente socio e dirigente di Canna Advisors, un ufficio di consulenza di Boulder, nello Stato del Colorado, che aiuta chi vuole aprire imprese di marijuana.
Brendan Kennedy, cofondatore di Privateer Holdings, un'azienda di investimenti di Seattle che si sta concentrando sulle imprese di cannabis, sostiene che le proposte che riceve di potenziali investimenti, “sono sempre molto piu' professionali negli ultimi tre anni”.
Attualmente Privateer ha un'azienda cartiera: la pagina web e le app mobili Leafly sono a disposizione dei consumatori che possono scegliere tipi e dispensari di marijuana. Quando Privateer compro' Leafly nel 2011, registrava 180.000 visite al mese ed “essenzialmente con reddito zero”. Ora il fatturato mensile e' di 125.000 Usd, e ad agosto ci sono state tre milioni di visite.
Altri esperti e funzionari consigliano cautela per la speculazione sulle prospettice di questa industria. Brian White, portavoce del Consiglio di Controllo sulle Bevande Alcooliche dello Stato di Washington, dice che il proprio Stato spera che la cannabis legale possa convertirsi in una fonte significativa di guadagni. Ma diche che “non c'e' nessuna certezza di quanto si guadagnera' con la vendita di marijuana legale. La nostra legislatura non ha registrato guadagni dalle vendite”.
Molti impresari stanno decidendo che anche se il mercato sara' basso, saranno comunque li' a raccoglierne i frutti. Il caso di George e' un esempio. Originario dello Stato di Washington e rappresentante per la vendita di elettrodomestici, decise di entrare nel settore dopo la visita, nel 2008, ad un dispensario locale per comprare marijuana dietro presentazione di una ricetta medica. George sperava di incontrare un ambiente professionale, ma rimase sorpreso a verificare che “molta gente stava parlando con un medico in un garage”.
L'esperienza lo spinse ad offrire una alternativa migliore. Il business che avvio' -con un giardino per coltivare piante, una vetrina e un panificio per trasformare la droga in cibo per i pazienti che non fumano- era lo stesso di molte piccole imprese. Offriva incentivi come tessere fedelta' e si promuoveva online tramite Leafly.
Ma l'imprenditore affronta ostacoli, soprattutto trovare una banca, un problema che si presenta per chiunque intende avviare un business di cannabis. George dice che il suo business deve andare avanti solo con un guadagno. Nessuna banca gli consente di aprire un conto in virtu' del fatto che il suo business e' con la marijuana -dice- e senza un conto non si possono accettare transazioni con carte di credito o di debito.
Ci sono iniziative politiche in corso che potrebbero rendere meno problematiche le preoccupazioni bancarie. Per esempio, il procuratore generale degli Usa, Eric Holder, ha detto poco tempo fa che il Governo federale stabilira' delle linee guida per consentire che le aziende legali di cannabis ottengano accesso al credito bancario.

Comunque, ci sono molti ostacoli. Riuscire ad avere spazi fisici puo' rappresentare un grande problema: molti sostengono che le citta' sono ostiche di fronte all'apertura di dispensari per questo prodotto.
Alcuni impresari del settore dicono che le proprie aziende sono trattate come qualunque altro business. Dan Williams, presidente di Canna Security America, con sede a Denver, che offre servizi di sicurezza per chi opera con la marijuana, fa sapere che non ha avuto problemi con agenti federali o banche. “Credo perche' siamo un fornitore di servizi e non maneggiamo la cannabis”.
Nel suo business -dice- l'unico problema reale e' stato “mantenere il ritmo di crescita esponenziale di questa industria”.

(articolo di Iris Dorbian, pubblicato sul quotidiano The Wall Stret Journal del 14/02/2014)

Le sfide in Usa per avviare un business sulla marijuana