Well, here we are, cannabis industry people, waist-deep into 2018.
And, but for a few bumps here and there with some state regulations rollouts, and continued beefs and bluffs from a U.S. attorney general apparently not in sync with his boss, all signals are still go.
In fact, announcing a position on cannabis has become an issue that any wannabe running for office in the November mid-terms needs to address. Who could have predicted that even four years ago?
So maybe, just maybe, that anti-cannabis stuff is on the way out – just background noise standing by to be totally drowned out by Canada’s October 16th cannabis kaboom when rec sales begin rocking across that entire country.
State-Level Revenue Rockets
Do we have cause to relax? Well, the legal cannabis industry has never looked stronger. Today, 46 states have laws permitting or decriminalizing cannabis or cannabis-based products.
Look at what’s been happening recently. Nevada shocked no one when rec sales soared. Nevada State Senator Tick Segerblom helped start rec sales a year early because “Nevada knows how to do sin,” as he told this reporter. Segerblom was first in line to buy a rec product the day it launched.
According to the Nevada Department of Taxation, from July 1, 2017 to March 31, 2018, $386 million in medical and recreational sales have brought in $49 million in tax revenue in Nevada, beating all predictions.
Colorado took in $1.5 billion in cannabis sales in 2017 with estimates that figure will almost double in 2018. And in California, the world’s fifth largest economy, estimated sales for this year, the first year where recreational and medical marijuana can be sold, will reach $5 billion, according to the LA Times.
But the real indicators about where the future of this industry live and move about are in Washington, D.C.
Federal Legislation in The Works
Among the 53 cannabis-related bills currently in Congress, according to the Congressional Record, is the House version of the Senator Corey Booker’s Marijuana Justice Act, which creates a $500 million investment fund for communities affected by the war on drugs; and Senator Elizabeth Warren’s STATES Act introduced on June 7, with the goal that each state should decide on its own about cannabis legalization legislation.
All these bills have some specific goals, some grander than others. But is Congress listening? James Cole addressed this at his keynote speech on July 26 at the National Cannabis Industry Association (NCIA) Business Summit and Expo in San Jose. “At the end of the day, I would rather see Congress actually take the bull by the horns and instead of nibble at the edges, he said. “Let’s sit down and look at what the issues are in the problem, craft a piece of legislation that takes care of these issues, and move on. And that seems to be difficult for them at times.”
Former members of Congress are now getting involved in the cannabis business. John Boehner, former speaker of the House and historically a huge cannabis opponent, now sits on the board of Acreage Holdings, one of the country’s largest multi-state cannabis companies with cultivation, processing and dispensing operations in 13 states. Acreage just raised $119 million in preparation for the rollout of their initial public offering on the Canadian stock exchange.
Could former members of Congress become the new spokespeople for cannabis legalization? Imagine John Boehner testifying at a Congressional hearing.
Or maybe someone from the executive branch, like the aforementioned James Cole, the deputy attorney general from 2010-2015 (now in private practice consulting for the cannabis industry) who wrote the Cole Memo in 2011 that essentially allowed this industry to exist by protecting it from federal intervention. Would he take a shot at supporting legalization efforts today?
I asked Cole at a closed press conference at the NCIA: Will you make yourself available for a Congressional hearing on cannabis? “I probably would,” Cole said. “Being at a hearing was never my favorite thing to do while I was deputy attorney general. But certainly, if I could help in the understanding of Congress about the issues that are involved in this matter, I would be happy to set something up.”
There are also active members of Congress making moves. Senate Majority Leader Mitch McConnell’s Hemp Farming Act of 2018, with a bipartisan group of 29 cosponsors representing 22 states, passed the Senate by a wide majority on June 28. If signed into law, which is expected to happen soon, it will legalize farming of hemp nationwide for the first time in 80 years and take hemp off the federal controlled substances list. (It’s not psychoactive and never should have been on that list anyway).
Just a day earlier, on June 27, Senate Democratic Leader Chuck Schumer, one of the co-sponsors of McConnell’s bill, introduced legislation to decriminalize cannabis on the federal level.
The Other Green Stuff: Cash
One of the biggest issues facing the industry that still needs to be settled is banking. The rescinding of the Cole memo in January, which banks relied on for protection from prosecution, caused a ripple effect across the industry but actually backfired to its intended purpose, causing more economists and entrepreneurs to study the industry and get involved in protecting it.
“I am not sure what kind of impact the rescinding of the memo is going to have because banking never caught on in the first place,” Cole said during his keynote speech at the 2018 NCIA business summit. “The fix you need to have, in my view, is legislative. You need to be able to say that the money that is generated from a legal cannabis business is not proceeds of a crime under the money laundering statute, that then trickles into all sorts of other statues that are triggered by that, and allows you then to have legitimate business conducted in a legitimate fashion, with banking and investment available to it,” he said.
Today, we in the industry should be cautiously optimistic. Pennsylvania Senator Daylin Leach, who introduced legislation that resulted in the legalization of medical marijuana in the state in 2016, told ACR that there is a reason for that optimism. “We are on the ground floor of an industry that will be one of the major economic drivers going forward. It will be our economic future. There is nothing that is going to slow this down organically. The more the industry grows and the more powerful it becomes, the harder it is to do the things that will stop it.”
We seem to be on a roll. President Trump has hinted that he would support states’ rights on this issue.
But there are still harsh realities, both named Sessions. Pete Sessions, a Texas Republican and chairman of the House Rules Committee, a staunch opponent of cannabis and the Congressional gatekeeper for any cannabis bill, has to get out of the way. And he’s not budging. In June, he blocked four amendments related to veteran’s access to medical marijuana. U.S. Attorney General Jeff Sessions says he’ll defend the laws on the books until Congress changes them, while hinting that studying medical marijuana may have some benefit.
Those are big obstacles. But we in this industry are used to big obstacles. We took chances, and are still taking chances because we are all still criminals in the eyes of the Feds. But this year, we have economic and political clout like never before. And we can, and have been, using that to correct the record of cannabis Prohibition in this country, and take our place among the leading economic engines of the future.