Marijuana Taxes May Ease Denver Housing Crisis
Colorado has been in the midst of a housing crisis for the last several years, with rent in Denver increasing more than 48 percent from 2010 through the end of 2017. But if a proposal to use sales tax proceeds from recreational marijuana sales is passed by city council, it could help bolster funds used for affordable housing in the city.
The proposal unveiled by Mayor Michael Hancock and other city officials would increase the number of income-restricted apartments from 3,000 to 6,400 over the next five years, as well as doubling money to the Affordable Housing Fund from $15 million per year to $30 million per year. Partnering with the Denver Housing Authority, the city would issue $105 million in bonds to subsidize affordable housing.
Hancock’s proposal would increase Denver’s 3.5 special tax on recreational cannabis to 5.5 percent, bringing the total state and local taxes to 25.25 percent. Denver voters wouldn’t have a say in the increase since the 2-percentage point increase requires only city council approval.
Marijuana industry members have largely supported the proposed tax increase. Kristi Kelly, executive director of the Marijuana Industry Group, said that her organization “has been a long-time advocate with better aligning marijuana tax revenue with the positive impact of the communities in which we live and operate.”
Kelly said that the tax increase would equate to about a dollar on a $50 purchase, and that she wasn’t concerned that the increase would drive consumers to the black market.
While briefing reporters on the proposal, Hancock said, “We must thank our marijuana industry for stepping up to say we want to be part of the solution.”
According to the Denver Post, an estimated 80,000 households in Denver spend more than 30 percent of their incomes on rent and housing costs. Officials say that increased housing for low-and-moderate income families, as well as the homeless, would be a priority.
FDA Seeks for Public Opinion About Descheduling Marijuana
The U.S. Food and Drug Administration (FDA) is seeking public comment (yep, that means you) regarding the classification of marijuana as a Schedule I substance under both U.S. law and international drug agreements. The FDA is putting together a recommendation for the United Nations’ World Health Organization (WHO). WHO is currently reviewing the international classification of cannabis, including THC, CBD and other cannabinoids.
Cannabis was listed in the UN’s Single Convention on Narcotic Drugs as a Schedule I drug in 1961, and the WHO says that cannabis is “the most commonly used psychoactive substance under international control.” Schedule I drugs include LSD and heroin–drugs that are considered high risk for abuse and addiction and that have no currently accepted medical use.
The FDA is specifically looking for input regarding the “abuse potential, actual abuse, medical usefulness, trafficking and impact of scheduling changes on availability for medical use of” marijuana. The FDA will forward public comments to the United Nations World Health Organization (WHO). Recommendations from the WHO are used to inform public health policy and drug laws.
In December, the WHO released a preliminary review of CBD, a non-psychoactive compound found in marijuana, that said CBD should not be scheduled as a controlled substance. They concluded that CBD has a low potential for abuse and that it “has been demonstrated as an effective treatment of epilepsy in several clinical trials” and “is generally well tolerated with a good safety profile.”
The preliminary review also found that “there is no evidence of…any public health related problems associated with the use of pure CBD.”
The deadline to submit public comments to the FDA is April 23.
Want to support the declassification of cannabis, but you don’t know where to start? NORML has posted a pre-drafted comment on their website, and they will be hand delivering all comments to the FDA.
Things to Do in Denver for 4/20 Week
Cannabis has come a long way since Denver held its first annual 4/20 Rally back in 2007. In the eleven years since the rally began, much of the nation has embraced marijuana–thirty states and the District of Columbia currently have legal cannabis in some form. And along with the growing acceptance of cannabis, the celebration of cannabis culture in the Mile High City has grown from one annual rally to a week chock full of 4/20 events.
Check out this listing of some of our top events this April:
Mile High 420 Festival – April 20
When it comes to weed in 2018, there’s less to protest and more to celebrate–so it makes sense that this year’s 4/20 revels at Civic Center Park have been dubbed a festival, rather than a rally. The festival is free and will feature live music, comedy, yoga and other wellness activities, food trucks, cannabis craft vendors, and more than 20 local charities. Festival headliners include Lil Wayne, Lil Jon, Inner Circle, and The Original Wailers.
RiNo Cares: Cannabis Health and Wellness Fair – April 15
This first-time event will offer health screenings, medical marijuana provider sign-ups, culinary demonstrations, industry panel discussions, and more. Event organizers describe the fair as supporting independent businesses and creatives in Denver’s River North (RiNo) Art District, and 30% of vendor booth fees will be donated to provide care, resources and support for Veterans in Colorado. The free, 21-and-up event will take place at Cultivated Synergy.
TedxMileHigh: Colorado’s Cannabis Conversation – April 18
Furthering the conversation around marijuana, speakers at this event will discuss topics ranging from the commercialization and medical uses of cannabis to pop culture and politics. Speakers include Dr. Doris Gundersen, an Assistant Clinical Professor in the Department of Psychiatry at the University of Colorado, lawyer Christian Sederberg, Esq., a founding partner in a law firm described by Rolling Stone Magazine as “the country’s first powerhouse marijuana law firm,” and Wanda James, who along with her husband, Scott Durrah, was the first African-American to own a dispensary and edible company.
Sensi Night Colorado at Temple Nightclub and Club Vinyl – April 19
Hang with cannabis industry workers and enthusiasts at Sensi Magazine’s second annual event. There will be over 120 Colorado companies on site to answer all your product and brand questions. The free, 21-and-up event will take place at two locations on Broadway. Register here.
107.9 KBPI Presents Afroman at The Gothic – April 20
“Because I Got High” isn’t just a song by rapper Afroman, it’s also an excellent, all-purpose explanation for stoner mistakes. Afroman is performing at the Gothic for an early 5:30 pm show, along with David Frederick and SwizZy B.
Red Rocks Amphitheater 4/20 weekend – April 19-21
Colorado’s legendary music venue is host to three nights of concerts in honor of the stoner holiday. See 311, Method Man & Redman on April 19, followed by Flosstradamus on April 20. On April 21, see Opuio + SYZYGY Orchestra and Sunsquabi.
Snoop’s 420 Wellness Retreat – April 20
The first stop of Snoop’s four-city tour is an all-ages event at Fiddler’s Green Amphitheatre, Snoop co-headlines with Migos and other performers include Lil Pump, Rob Stone, and Tiara Thomas. Get tickets here.
420 on the Block – April 20-22
The three-day music fest sponsored by The Green Solution, will feature headliner Action Bronson, along with Matisyahu, Michael Menert, Break Science, Washed Out, and more at the Fox Street Compound. Purchase tickets for the event here.
Ganja Guru Yoga Brunch – April 22
After a busy week of 4/20 festivities, chill out with this 21-and-up, yoga-meets-cannabis brunch event. Hosted by Urban Sanctuary Yoga, there will be space for consumption (make sure to bring your own weed), a healthy breakfast, and an uplifting vinyasa yoga class, followed up by CBD massages.
Good Vibe Mafia Charity Yoga Event – April 28
The Good Vibe Mafia will be gathering at Rino Yoga Social on April 28th at 2 p.m. for a mindful yoga class lead by Amanda Learned. All proceeds will benefit The Food Bank of the Rockies; a local Denver based charity providing food for those in need.
The Mile High City Brings Bulk of Cannabis Revenue in Colorado 2017
We know that Colorado raked in tons of money in cannabis revenue in 2017, but new numbers released by the Colorado Department of Revenue show that Denver accounted for a sizable chunk of that number. The Mile High City accounted for over a third of the state’s total cannabis revenue, totaling $577.5 million, according to Westword.
Previous numbers released by the DOR in February reported that the state made $1.5 million in cannabis sales last year. When added to the total revenue since legal recreational cannabis sales began in 2014, that amounts to nearly $4.5 billion in sales. Data including sales from the entire state show that overall dispensary sales rose in December for the first time since August 2017. That’s a 7 percent increase in revenue from November (119.56 million) to December ($128.27 million). Numbers from recreational marijuana sales in December 2017 accounted for approximately $96.34 million. Medical sales amounted to $31.92 million.
The data shows a trend for seasonal sales differences. Cannabis sales spike during the warm summer months and decline beginning in September. In August of last year, Denver dispensaries brought in over $53.6 million, with recreational pot accounting for $35 million. February is the slowest month for cannabis sales in Denver, with just over $29.5 million in sales in 2017.
The numbers released by the DOR in March show that Denver dominates marijuana sales in Colorado with more dispensaries than any other Colorado city. Denver has nearly 1,150 active cannabis business licenses within city limits, 364 of which are for dispensaries. The number of dispensaries in Denver is triple that of those found in Colorado Springs, the state’s runner-up in the number of shops selling legal cannabis.
Only 25 of 64 Colorado counties currently allow recreational marijuana sales. Arapahoe and Douglas counties prohibit retail cannabis sales; however, Aurora, which is part of both counties, does allow recreational sales. Adams and El Paso counties either limit or outright ban retail marijuana.
CBD Continues to Make Progress in Fight to End Cannabis Prohibition
While the end of marijuana prohibition is spreading across the U.S., there are still some states that are reluctant to enter into the brave new world of cannabis. But data compiled by Marijuana Business Daily shows even in states with restrictive cannabis laws, there are still signs of progress–especially when it comes to CBD.
- In Virginia, Gov. Ralph Northam (D) dropped the list of qualifying conditions for low-THC cannabis, instead allowing physicians to recommend cannabis for any ailment. Before Northam signed the legislation, medical practitioners were only allowed to prescribe cannabis for the treatment or to alleviate the symptoms of intractable epilepsy.
- A bill that would regulate the distribution and sale of CBD oil was approved unanimously in the Utah Senate and passed in the state House on a 49-20 vote. The House sponsor of the bill, Brad Daw (R), said, “This bill solves an immediate problem where we have a lot of fake product on the shelves right now. I think this bill fulfills our duty to protect consumers, and make sure what they are buying is what they think they are buying.”
- Gov. Eric Holcomb (R) is expected to sign a bill that would legalize CBD oil in Indiana. When the bill is signed into law, it will expand CBD access from patients with epilepsy to all adults. While cannabis advocates say the bill is a win for cannabis, many of them are frustrated that the bill requires burdensome labeling that they say will prevent manufacturers to sell their products in the state.
- In Iowa, seven companies have applied to sell low-THC medical cannabis at 21 separate locations. The state is expected to approve licenses for five locations next month. Iowa’s medical marijuana program is in its infancy, and existing rules prohibit marijuana products from being smoked or eaten, and THC potency is limited to 3%.
While access to CBD and cannabis is still quite limited in a number of states, there is movement and incremental change.
Diversity Summit Looks to Empower Minority Cannabiz Leaders
Despite ending marijuana prohibition five years ago, less than 1 percent of licensed cannabis businesses in Colorado are minority-owned, according to the Minority Cannabis Business Association (MCBA). Hoping to change that statistic, the MCBA has partnered with the Hoban Law Group to organize the first annual Cannabis Opportunity Summit. The three-day event will take place March 22-24 in Denver.
Kayvan Khalatbari, Denver mayoral candidate and MCBA board member, said in a press release, “This event recognizes the consequences of the War on Drugs, and outlines best practices to move burgeoning entrepreneurs and businesses forward as we work together to mold the nascent cannabis industry into a better and more equitable industry, not just another industry.”
Event organizers say the summit aims to provide resources, information, and connections to cannabis businesses. The Cannabis Opportunity Summit will include speaker sessions and interactive workshops covering a wide range of topics, including market and opportunity analysis, operational differentiators, community reinvestment, cultural integration, advocacy and lobby training.
It will also feature the launch of MCBA’s expungement and record-sealing clinics in Colorado, which will aim to remove or seal non- violent drug offenses from the permanent records of people looking to gain fairness in employment, housing, and more.
The keynote speaker will be former Denver Broncos and two-time Superbowl champion Terrell Davis.
“As an entrepreneur myself, I am well aware of the struggles that people of color face in the business sector,” Davis said. “And as a professional football player, I’ve seen first-hand how teamwork and collaboration benefit from adopting inclusive hiring practices and policies.”
The MCBA was founded in 2015 as a nonprofit organization. The group has members in Colorado and across the country. The MCBA aims to bring together minority cannabis entrepreneurs, workers, patients and consumers and to increase diversity within the cannabis industry.
The summit will take place and the Daniels School of Business in Denver, and tickets to the event cost between $25 and $119.
11-OH-THC Responsible for Making Edibles More Potent
Ever wonder why the high produced from smoking versus ingesting cannabis feels different? Look no further than cannabinoid 11-OH-THC.
Most people familiar with marijuana know about the rockstars of the cannabinoid world–THC and CBD–but there are more than 100 other cannabinoids produced by marijuana, including 11-OH-THC. And while THC is known for its psychoactive effects, there’s evidence that 11-OH-THC is more potent than THC.
What does that have to do with smoking versus eating cannabis? That requires a bit of background on cannabinoids and how they’re formed.
Most cannabinoids aren’t actually present in the cannabis plant, but are the result of chemical interactions between our bodies and cannabis. And the way we consume marijuana affects the type and concentration of cannabinoids produced.
When we smoke cannabis, it’s metabolized through the lungs and the absorbed cannabinoids are distributed throughout the body. Smoking cannabis results in only a very small amount of cannabinoids metabolized by the digestive system.
Ingesting cannabis, on the other hand, metabolizes cannabis through the digestive system. The liver breaks down THC molecules, converting them into other molecules to be eliminated from the body. One of the metabolites created during this process is 11-OH-THC. When THC is converted to 11-OH-THC, it becomes more potent.
According to the Prof of Pot:
“The levels of 11-OH-THC in your blood after smoking cannabis are only about 5% of THC levels. This is probably not enough to feel any effects from the 11-OH-THC.
However, after taking cannabis orally, the average levels of 11-OH-THC vary from 25% of THC to more than 300% of THC levels…so some people will have well over 3 times more 11-OH-THC in their body than THC after ingesting cannabis!”
The different levels of THC and 11-OH-THC are probably responsible for the different qualities of high produced from smoking or ingesting marijuana.
Citing a study that compared the potency of THC vs. 11-OH-THC, the Prof of Pot explains, “With this molecule )11-OH-THC), subjects reached nearly an 8 out of 10 on the highness scale, vs. only about a 3 out of 10 for THC.”
Cannabis DNA: Mapping the Genome
Cannabis is credited with a whole host of therapeutic benefits and is effective at treating numerous medical conditions. But, it’s still early days when it comes to testing and researching marijuana, making the benefits of cannabis anecdotal evidence.
Scientists around the country are researching cannabis, hoping to expand our knowledge of the plant. Last month, two Colorado companies announced that they had mapped the cannabis genome. Sunrise Genetics, based in Fort Collins and Boulder-based CBDRx/Functional Remedies teamed up to map cannabis’ 10 chromosomes. Functional Remedies provided cannabis plants for Sunrise Genetics to study.
Understanding the genetic makeup of cannabis will make targeting specific desired effects, like making a consumer feel focused or relaxed, as well as treating specific symptoms, like muscle spasms or insomnia. Much of the current research around cannabis is focused on its medical uses, but there’s also increased focus on the uses of industrial hemp.
CJ Schwartz, chief executive officer of Sunrise Genetics, told Bloomberg, “DNA, of course I’m biased because it’s what I do, but it doesn’t lie. It really is a way to just sort of clear a lot of the b.s. The excessive claims are really doing a disservice to the plant or the potential of the plant and the science surrounding that.”
Matt Gibbs, president of Sunrise Genetics, told Biz West, “In this emerging industry, we all play a role in its success, and finding innovative and forward-thinking partners right here in Colorado has made the benefits of a joint effort to advance the science that benefits the hemp industry that much greater. Together, we look forward to continued expansion upon the map, expansion upon research opportunities,” he said, “and continuing to make better hemp and cannabis genetics.”
The full cannabis genome was presented at the Plant and Animal Genome Conference in San Diego in January.
Olympic, MMA & NFL Athletes are Fighting for Legal Cannabis
Canadian Ross Rebagliati won gold at the first Olympic snowboarding competition in 1998, but he was stripped of his medal after testing positive for marijuana. Happily for Rebagliati, his medal was returned to him after it was discovered that cannabis wasn’t on the banned substances list and there was no provision in the IOC’s rules for marijuana testing. The committee banned marijuana in 1999.
No one in 1998 could have predicted it, but twenty years later there’s been a sea-change when it comes to cannabis. Last September, the Anti-Doping Agency (WADA) announced that it would remove cannabidiol (CBD) from its 2018 prohibited substances list.
WADA develops the drug code for the International Olympic Committee (IOC) and the U.S. Anti-Doping Agency (USADA), as well as 660 other sports organizations, so the decision has significant reach.
But could the ruling by WADA influence the NFL Players Association and other professional sports associations to change their stance on CBD and/or cannabis?
CBD is one of the 60+ compounds found in cannabis, and it produces little to no psychoactive effects. CBD has numerous therapeutic benefits, including relieving pain and inflammation, reducing anxiety, and even preventing and treating traumatic brain injury.
Changes in marijuana laws across the U.S. have helped normalize cannabis use, and there are an increasing number of athletes who want an alternative to opioids and painkillers, and anti-inflammatories.
“CBD can help these athletes feel better during their career, ultimately prolonging it. Then, when their career is over, they don’t leave the game with any addiction or health issues,” said former NFL defensive end Marvin Washington.
In 2016, UFC fighter Nate Diaz received a public warning from the USADA after using a CBD vape after a match. “It’s CBD,” said Diaz. “It helps with the healing process and inflammation, stuff like that. So you want to get these for before and after the fights, training. It’ll make your life a better place.”
Colorado Sells an Amazing $1.5 Billion in Cannabis!
Legal marijuana sales in Colorado last year broke yet another revenue record in 2017. The state sold $1.51 billion worth of cannabis, passing the previous record of $1.3 billion set in 2016. In 2015, sales were $996 million.
The numbers were released by the Colorado Department of Revenue on Friday, and show that revenue from recreational flower, edibles, and concentrates reached $1.09 billion last year, while the medical cannabis market made $416.52 million. The DOR data show that legal marijuana sales added more than $247 million to the state’s tax coffers.
In December 2017 alone, dispensaries sold $96.34 million in recreational cannabis products, and medical marijuana sales topped out at $31.92 million.
Both cities and counties are allowed to ban or allow marijuana businesses, and since adult-use sales began, the number of municipalities that have approved marijuana sales has increased. In January 2014, only 25 towns had recreational marijuana dispensaries, compared to 75 retail cannabis dispensaries in 2017.
Colorado has seen sustained growth in the cannabis industry since retail sales began four years ago–from 2014 to 2017, the growth rate was at 120 percent.
However, experts warn that the growth rate is beginning to slow and stabilize. While 2017 brought in record-breaking cannabis sales, it also had the smallest annual growth. In 2016, cannabis sales grew by 31 percent, while cannabis sales in 2017 were up by only 15.3 percent.
In dollars, that means that while there was a gain of $200 million in revenue from 2016-2017, but that increase was nearly 36 percent less than the annual gains from 2015 to 2016 and 2014 to 2015.
Adam Orens, a founding partner of the Marijuana Policy Group, told the Denver Post, “I think what we’re starting to see is the leveling off of the market after the illicit market is absorbed.” Orens estimates that 90 percent of the state’s black-market sales have been absorbed by the legal market.
Other factors that could influence the growth rate of the cannabis industry in Colorado are the increasing number of states legalizing marijuana (especially California) and the downward cost of wholesale marijuana.
Marijuana Job Market Continues to Grow
Employment in the cannabis industry is eclipsing some of the fastest-growing fields in the country, including healthcare and tech. Across the U.S., it’s estimated that some 122,000 people work in cannabis, and by 2021 that number is expected to increase to over 400,000 jobs.
Widespread support for cannabis legalization has resulted in more states jumping into the industry and more businesses looking to hire. In 2016, job growth in the marijuana industry was only 18%. In 2017, job postings have increased 445%. The number of people working in cannabis-related businesses is higher than the number of people employed as dental hygienists and bakers, and could also surpass the number people working as telemarketers or pharmacists.
However, it’s hard to get an accurate read on job creation in the legal marijuana industry, even at the state level, because cannabis is still classified as a Schedule I drug. That means that the U.S. Bureau of Labor Statistics doesn’t collect data or recognize cannabis as an industry. Tracking growth would help job seekers, investors, policy makers, and economists paint a fuller picture of the industry.
While the federal government doesn’t acknowledge cannabis, employment opportunities continue to increase in states with legal marijuana. Cannabis businesses and job seekers connect through career fairs and industry events. Some universities are offering courses on the business of marijuana, including classes on marijuana law and cannabis journalism–indicating that the industry isn’t going anywhere.
Spending in cannabis resulted in $9 billion worth of sales in 2017, and with the beginning of legal recreational cannabis sales in California, that number is sure to increase. Industry research firm BDS Analytics expects legal weed will add approximately $40 billion to the U.S. economy by 2021, and if cannabis became legal in all 50 states, it could result in over $130 billion to U.S. tax revenue.
Weed Delivery May Come to Colorado as Early as Sept.
Weed could be coming to a couch near you if Colorado legislators approve a proposed marijuana delivery pilot program.
Based on Oregon’s cannabis home delivery regulations, House Bill 1092 would establish regulations for delivering both medical and recreational cannabis to consumers. The state could start issuing licenses as soon as Sept. 1, 2018 if the legislation passes.
Co-sponsored by Rep. Jonathan Singer (D-Longmont) and Rep. Jovan Melton (D-Aurora), this isn’t the first time Singer and Melton have tried to pass marijuana delivery. The representatives introduced a similar marijuana delivery proposal in Feb. 2017, but Gov. John Hickenlooper put the kibosh on it.
The governor has never been an enthusiastic marijuana supporter, and he called last year’s attempt to legislate cannabis delivery a “hazard” that could draw the attention of federal authorities.
However, Singer told The Cannabist, “Bottom line is that we haven’t seen an increase in public safety issues where this is rolled out. Additionally, if there’s concern about federal attention, the federal attention would already be on Oregon where this happens.”
Colorado already allows delivery of prescriptions and alcohol, and Singer said that allowing cannabis delivery would “hopefully…decrease the incidence and the likelihood of DUIs, whether they’re related to alcohol or other substances.”
Delivery workers would be trained to verify medical marijuana cards and IDs for adults 21 years or older. Licensed delivery vehicles would be required to include tracking and security measures, and there would be limits on the amount of marijuana transported at any one time. Transported cannabis must be delivered to a physical address. Delivery licenses would be valid for one year, renewed annually.
Because the legislation is a pilot program, state licensing authorities would need to report back to House of Representatives’ Business Affairs and Labor Committee and Senate Business, Labor and Technology Committee by March 1, 2020.
The House Finance committee will hold the first hearing on the issue on Feb. 7.
Colorado Health Dept. Says Locals Know Their Weed
When it comes to cannabis in Colorado, it turns out that residents know their stuff. With more dispensaries than Starbucks (in Denver, at least), Colorado’s passion for weed probably comes as no surprise. But far from the stoner stereotype, Coloradoans are knowledgeable about marijuana laws, health effects, and risks.
A new report released by the state Health Department shows that locals are better educated about marijuana than they were when it was legalized. Coloradoans weed education is partly thanks to a campaign launched by the Colorado Department of Health and Environment (CDPHE). “Good to Know,” a public education and awareness campaign, was launched in 2015 with the aim of promoting the safe, legal, and responsible use of marijuana.
Dr. Larry Wolk, the executive director of the CDPHE, said the department’s public education approach differs from previous drug education programs like DARE. Rather than scare tactics or promoting abstinence, the “Good to Know” approach is decidedly more friendly and upbeat.
The report shows the shifts in attitudes, knowledge, and perceptions of marijuana since the beginning of retail sales. Here are some of the highlights from the report:
- Among cannabis users, adults familiar with the Good to Know campaign were 2.5 times more likely be familiar with marijuana laws.
- Current cannabis users (80 percent) have significantly higher knowledge of the laws compared to nonusers (59 percent).
- The number of those who knew the risks of driving within 6 hours after using marijuana increased 23 percent and those who realized daily use could impair memory increased 26 percent.
- Increased perceptions of risk (12 percent) of over-consumption of edibles.
- Because marijuana has been shown to have negative health effects during pregnancy and breastfeeding, part of the education campaign focused on women of reproductive age. Today, nine of 10 of these women agree there are some risks of using marijuana during pregnancy.
- The number of adults prepared to talk to their children about the risks of using marijuana increased 12 percent.
Do Cannabis Dispensaries Increase the Value of Your Home?
If you live in or around Denver, you already know what a nightmare the housing market has been for the last few years. And, chances are, you probably place some of the blame on the legalization of recreational marijuana in 2014.
New recreational cannabis markets–especially in a behemoth of a state like California–are looking to Colorado to predict what impact legalization will have on their communities. Luckily, a group of researchers studied the effect on housing prices in Denver both before and after recreational marijuana was legalized–and their results were surprising.
Rather than negatively impacting property values in the immediate vicinity of a dispensary, they found that selling recreational cannabis had a “large positive impact on neighboring property values.”
James Conklin, a real estate professor at the University of Georgia, co-authored the study and told The Cannifornian, “We went into the project and we weren’t really sure what to expect. We thought maybe there would be a negative impact. I think our takeaway after working on the project was that we don’t see a negative effect — we do see results point to a positive effect.”
In fact, they found that existing medical marijuana dispensaries that expanded to included recreational sales actually raised nearby property values. Single-family homes within 0.1 miles of a dispensary saw gains of 8.4 percent relative to houses located between 0.1 and 0.25 miles away. For homes in the 0.1 mile range, the average property value increase was $27,000 higher after legalization.
Moussa Diop, an assistant professor of real estate and urban land economics at UW Madison and co-author of the study, explained that “the presence of retail marijuana establishments clearly had a short-term positive impact on nearby properties in Denver. This suggests that in addition to the sales and business taxes generated from the retail marijuana industry, municipalities may experience an increase in property taxes. It’s an important piece of the puzzle as more and more voters and policy-makers look for evidence about the effects of legalizing recreational marijuana.”
However, as the researchers note, the correlation between legal marijuana and housing values is only one factor affecting the Denver market. Even before 2014, Colorado’s population was on the uptick and affordable housing was (and still is) in short supply.
So, while new cannabis markets are looking to Colorado to predict what will happen in their own communities, there’s no guarantee that what’s happened in Denver and the state will impact new cannabis markets in the same way.
Some realtors in California have expressed disbelief that legal weed will increase home values. Rick Smith, president of the Santa Clara County Association of Realtors, said that regulations prohibiting dispensaries from operating close to neighborhood schools would likely have a dampening effect on home values.
Oakland-based realtor Kerri Naslund-Monday agreed. “The demand here is so high already,” she said, “even without that element, that I don’t foresee it causing too much of an effect that could be measured.”
More States Will Legalize Cannabis in 2018
Recreational marijuana is legal in 9 states, plus the District of Columbia, and 29 states have approved marijuana for medical use. 2018 could be one of the most active years for marijuana legalization, with 12 states are slated to vote on recreational or medical marijuana proposals.
Here’s a look at the states likely to approve recreational cannabis measures this year:
The state has had a difficult time getting marijuana legalization off the ground. Last year, lawmakers introduced four bills to legalize and tax the sale of cannabis, but none of them cleared the statehouse.
Supporters of pot legalization argue that they’re missing out on tax revenue that would bolster the state budget. Not legalizing means that all that tax revenue would instead go to neighboring Massachusetts, where recreational marijuana is legal.
Unlike other states that have legalized recreational marijuana, Delaware doesn’t allow ballot initiatives. That means that legalizing recreational marijuana would need to be approved by the state legislators.
The Adult Use Cannabis Task Force was created in 2017 to study the possibility of recreational cannabis legalization. The 25-member panel was expected to release a final report by Jan. 31, but the group has delayed its release until the end of February.
Michigan: The Coalition to Regulate Marijuana Like Alcohol needs 252,523 signatures of registered Michigan voters to get pot legalization on the November ballot. Recent surveys show widespread acceptance of cannabis, with 58 percent of Michiganders supporting legalization.
The new governor of New Jersey, Phil Murphy, campaigned on cannabis legalization and has promised to sign legislation within his first 100 days in office. Former governor Chris Christie was notoriously anti-pot, and New Jersey set an in-state record in 2015 for marijuana possession arrests.
Responsible Ohio will begin collecting signatures this month to get a legalization proposal on the 2018 ballot. In 2015, a ballot measure to legalize marijuana failed.
Like Connecticut, some lawmakers in Rhode Island say that the state is missing out on revenue, while other New England states are benefiting from the increase in tax dollars. Rhode Island formed a legislative commission last year to study the impact of recreational marijuana. The board is expected to release its recommendations later this month.
Vermont will be the first state in the country to legalize recreational marijuana through state legislation rather than a voter-approved ballot measure. The Vermont House of Representatives approved a legalization bill last week, and it’s expected to be approved by the Senate as well. Republican Governor Phil Scott has said that he’ll sign the legislation.
In May 2017, Scott vetoed legislation approving recreational marijuana, citing the need for a bipartisan commission to examine public health issues surrounding recreational marijuana. In December, Scott told Vermont Public Radio that, “a number of states have already legalized it surrounding us. Whether we like it or not, it’s here, and it’s being utilized, so we have to take steps to promote the general public.”
California Opens for Recreational Cannabis
If you somehow missed the news over the holiday season, recreational marijuana sales in California officially began January 1. The most populous state in the nation, California is home to nearly 40 million people–and expectations are high that the state’s marijuana market will earn billions of dollars.
On a national scale, the end of marijuana prohibition in California is a watershed moment, reflecting changing attitudes and acceptance of cannabis around the country. The number of states legalizing medical and/or recreational marijuana keeps growing. As tax revenue from pot sales fill the coffers of state and local governments (California expects $1 billion annually in taxes), it seems increasingly unlikely that federal authorities will crack down on the industry.
However, the launch wasn’t without hiccups: the computer system designed to track marijuana and prevent it from entering the black market wasn’t online, so dispensaries have been forced to keep track of transfers and sales of marijuana manually.
On top of that, California’s Bureau of Cannabis Control, charged with issuing temporary licenses to retailers and distributors, issued businesses licenses to eighty-eight stores–leading to long lines and supply issues at dispensaries.
Temporary adult-use retail licenses have currently been granted in 34 cities, representing 12% of California’s total population. The licenses are only good for 120 days, so businesses will need to reapply for a permanent license. There are currently 1,400 pending license applications for retail sales, distribution, and testing facilities.
Charles Boldwyn, chief compliance officer of ShowGrow in Santa Ana, said that the delay in finalizing rules and issuing business licenses could lead to a shortage of cannabis products.
“We’re looking at … hundreds of licensed cultivators and manufacturers coming out of an environment where we literally had thousands of people who were cultivating and manufacturing,” Boldwyn said in an interview with the Associated Press. “So the red tape is a bit of a bottleneck in the supply chain.”
San Diego, San Jose, and Sacramento are the largest cities in California where recreational shops have opened their doors. Los Angeles and San Francisco are expected to begin recreational sales sometime early this month.
Goodbye 2017: A Year in Weed Review
2017 began with Attorney General Jeff Sessions vowing to end legalized marijuana, but just days away from the start of a new year, the weed industry is growing faster than ever.
Here’s a roundup of all the major cannabis news in 2017:
Get ready for your jaw to drop: the legal marijuana industry is expected to reach $10 billion in sales in 2017, up 33 percent from 2016. Much of that growth is due to new cannabis markets opening for recreational and medical sales.
Washington state generated $436 million in retail sales this year, while Oregon generated $175 million. Nevada, which opened to recreational marijuana sales in July, hasn’t released sales numbers yet, but in July retail dispensaries made $27 million.
In eight months, Colorado made more than $1 billion in recreational and medical marijuana sales, with $512 million generated during the first half of 2017–more than any other legalized state. Most industry experts anticipate that California will eclipse the Colorado market when recreational sales begin in 2018.
Tax revenue from the 2016-2017 fiscal year brought more than $105 million to Colorado’s “Marijuana Cash Fund,” which supports health programs in public schools, housing for at-risk populations, and treatment programs aimed at combating the opioid epidemic.
Colorado has continued to blow through previous revenue records, and 2017 was the year that $100 million of cannabis sales per month in Colorado became the new norm.
Denver Says ‘Yes’ to Social Cannabis Use
Denverites voted to become the first city in the country to allow public cannabis use. The problem of where to consume legally purchased cannabis has been a problem in Colorado since recreational marijuana sales began in 2014. However, “public” might be overstating things a bit–there are still plenty of regulations in place limiting where and how people are allowed to toke. Earlier this month, the Coffee Joint in west Denver became the first business in the city to apply for a social use license.
Cannabis, the Great Uniter
2017 has been a year of deep partisan divide in U.S. politics, but marijuana has proven to be the one issue both conservatives and liberals can get behind. In February, a group of bipartisan lawmakers launched the Congressional Cannabis Caucus. Republican congressmen Dana Rohrabacher (California) and Don Young (Alaska) joined Democrats Earl Blumenauer (Oregon) and Jared Polis (Colorado) got together with the goal of easing tensions between federal and state drug laws and supporting the growing cannabis industry.
Relief for the Opioid Epidemic
The extent of the opioid epidemic in the U.S. is staggering. More than 64,000 people died from drug overdoses in 2016, and about 175 people die in the U.S. every day due to opioid overdose. But some researchers think that that cannabis might prove to be a lifesaver.
Both opioids and cannabinoids, like THC and CBD, block pain signals in our nervous system. Unlike opioids, cannabis is non-addictive and has comparable therapeutic effects with none of the dangerous side-effects. Plus, CBD can reduce drug cravings and withdrawal symptoms, helping to reduce the likelihood of relapse.
A study published by in the American Journal of Public Health found that legal marijuana leads to fewer opioid-related deaths. Since the start of recreational cannabis sales in Colorado, the state saw a 6.5 percent drop in the number of opioid deaths.
Additionally, researchers found that in states with a medical marijuana program, prescriptions for medications like painkillers, antidepressants and anti-anxiety medications dropped sharply. They also found that a nationwide medical marijuana program would save taxpayers about $1.1 billion on Medicaid prescriptions annually.
Nevada Recreational Market Opens
On July 1, Nevada dispensaries opened their doors for legalized recreational marijuana sales. Nevada was the fifth state in the U.S. to end marijuana prohibition and the first to declare a state of emergency when weed supplies ran low.
Less than two weeks after recreational sales began, dispensaries were running out of product to sell. In an effort to make concessions to the liquor industry, Nevada marijuana laws require that wholesale alcohol distributors have the exclusive right to transport cannabis from grows to dispensaries. The problem was, the state hadn’t approved a single distribution license–meaning that while there was plenty of cannabis to go around, there was no way to transport cannabis from point A to point B. The state of emergency allowed Nevada officials to adopt regulations to alleviate the shortage.
Enrollment Jumps for New Mexico’s Medical Marijuana Program
New Mexico’s medical marijuana program launched in 2007, but this year the state has seen a record number of enrollees. The state saw a 77 percent increase registered medical marijuana patients, bringing the total number of patients to 45,347 as of Nov. 30. That’ a net gain of 19,650 patients.
It’s the largest increase in the number of registered patients over a one year period, and the number could easily reach 50,000 by the end of the year.
This is despite the ongoing confusion surrounding enrollment numbers from the New Mexico Department of Health (NMDOH). Over the past three years, thousands of patients have been disenrolled from the medical marijuana program. Department of Health officials blame so-called “legacy data” that needed to be removed from the state database. The NMDOH and the vendor responsible for program data have confirmed the ongoing reporting concerns.
“The challenge we run into, as we have stated several times, is these reports keep having staggering changes in numbers,” Andrea Sundberg, NMDOH Patient Services Manager, told the Las Cruces Sun-News. “Last year we had a change of 5,000 active enrollees in a one month period that nobody could ever explain. Then last month (September 2017) we ran the report and the numbers by county and condition were different than the active count by over 7,000,” Sundberg said. “These type of issues two years into the system are not appropriate and only lead to greater confusion about our valid data.”
In April, New Mexico’s medical cannabis board voted to expand the list of eligible medical conditions beyond the current 20 acceptable ailments. The addition of qualifying conditions would expand the patient pool significantly, which could be a boon for the state’s cannabis businesses, but disagreements between the New Mexico Medical Cannabis Advisory Board and New Mexico Health Secretary Lynn Gallagher.
Denver Coffee Shop First to Apply for Social Pot Use
More than a year after Denver voters approved social marijuana use at licensed businesses, the city has received its first application.
The Coffee Joint in west Denver will be the first in the city to allow vaping and the consumption of edibles. City regulations prohibit smoking cannabis indoors. As part of the licensing process, owner Rita Tsalyuk was required to get approval from the local neighborhood association.
“I really feel comfortable,” said Aubrey Lavizzo who is part of the neighborhood association which met with the owners of the Coffee Joint.
“Our main concerns where whether or not they are going to be good neighbors,” said Lavizzo. “But they were coming to our meeting and answering all their questions.”
Denver finalized rules for social use five months ago, but many local businesses complained that the city’s regulations are so restrictive that they discourage businesses from applying. In addition to receiving approval from local neighborhood associations, social cannabis use businesses are required to adhere to a host of regulations. Rules include operating at least 1,000 feet from schools, as well as restrictions to keep social use shops at least 1,000 feet away from daycares, public recreation — public parks and community pools — and alcohol and drug treatment facilities. The application fee is $1000.
A public hearing will be held in the next two or three months. In the meantime, the Coffee Joint plans on opening at the end of the year as a regular coffee shop. Tsalyuk expects to open the shop for marijuana consumption in March 2018.
“I want it to have a Starbucks feeling, but more like the Highlands,” said Tsalyuk. “They’ll watch TV, listen to music, do art, there will be lessons, educational events, just no cannabis… yet.”
Denver’s social use regulations prohibit marijuana dispensaries from applying for a social use license, so plan to BYOM (bring your own marijuana). Luckily, the Coffee Joint is neighbors with an a existing recreational cannabis shop.
Once the Coffee Joint opens for social cannabis use, there will be a $5 admission fee that includes coffee and tea.
Recreational Marijuana Sales Begin in California Jan. 1
2018 is just around the corner, and California’s recreational marijuana program is set to launch on January 1. The state is expected to become the country’s largest marijuana market, generating $4.5-$5 billion in annual sales.
Ahead of the Jan. 1 launch of recreational cannabis, here’s what you need to know about the California market:
Who can purchase recreational cannabis?
California is following the lead of other states with recreational marijuana programs and regulating cannabis like alcohol. Recreational marijuana can only be purchased by those 21 or older. Medical marijuana regulations will remain unchanged, and you must be 18 years or older with a valid doctor’s recommendation.
How much marijuana can you possess and can you grow your own marijuana plants?
- You can possess 28.5 grams of flower, or 8 grams of cannabis concentrate.
- Individuals can grow up to six plants.
- Driving while high is illegal, as is using marijuana in a moving vehicle or having an open container of cannabis in the car.
- Smoking is prohibited in public, including in restaurants, bars, or concert venues. You can smoke in your home or backyard; however, if your lease prohibits smoking, you can’t smoke cannabis in your rental unit.
When and where can Californians buy recreational marijuana?
That’s a little bit more difficult to answer. California is implementing a dual-licensing system between state and local governments. That means that while recreational marijuana will be legal statewide, dispensaries won’t receive a business license unless they have the approval of their city and/or county government. Local governments will be responsible for setting cannabis regulations, and they have the ultimate say in whether or not adult-use cannabis sales will be allowed.
Unfortunately, many local governments are behind in issuing regulations. California’s five largest cities–Los Angeles, San Diego, San Jose, San Francisco, and Fresno–are at varying stages in setting guidelines. Depending on where you live, you might have to travel to find a recreational marijuana dispensary.
Additionally, cannabis businesses can only sell or deliver weed between 6 a.m. and 10 p.m., so don’t expect to purchase weed at the stroke of midnight on New Year’s Eve.
Las Vegas MJBizCon Brings Record Numbers
MjBizCon, the annual conference aimed at marijuana professionals and investors, wrapped up its sixth year earlier this month and established itself as the fastest-growing trade show in the country.
This year’s conference was the first in Nevada since recreational marijuana was legalized, and the event drew a record number of vendors and attendees.
- 678 companies exhibited at the event, a 111% increase from last year. Exhibiting companies spanned all sectors of the industry, from banking, security, packaging and marketing firms to consultants, cultivation equipment manufacturers and infused product companies.
- 18,000 cannabis professionals attended the convention, a new record and up 67% from last year’s event.
- Nearly 11% of all conference attendees – 1,932 in total – hailed from outside the U.S. Canada had the largest International presence at the show, accounting for over 75% of the non-domestic audience.
The convention’s four keynote speakers included former Apple and Tesla executive George Blankenship, Jeanne Sullivan, a dot-com era investor in tech companies, Marijuana Business Daily vice president of editorial Chris Walsh, and Chief White House Correspondent for U.S. News & World Report Kenneth T. Walsh.
Chris Walsh, who was also one of the event organizers, said that interest in the conventions was so great that they had to cut some of the exhibitors because there wasn’t enough room.
“You have people who were probably against marijuana at some point in their lives and then said maybe it isn’t that bad,” Chris Walsh said. “Or maybe try to get in on it on the business side, now that it’s becoming legal, it’s not the devil weed people said it was.”
“You have people who are ambivalent, who are here for the same reasons and then you have business people from the mainstream business world who were successful in other industries looking for their next project.”
“Cannabis is here to stay,” Sullivan told attendees. She urged companies in the marijuana industry to focus on positioning themselves favorably for potential acquisition by larger corporations, such as pharmaceutical and agricultural industries.
“These companies are not going to miss out,” Sullivan said, referring to the industry entrances of Scotts Miracle-Gro, liquor distributor Constellation Brands, and Netflix.
Blankenship was equally optimistic about the future of the cannabis industry. “Sooner or later, you’re going to be able to say, ‘Alexa, send me an eighth of flower.'”
Advertising Still Difficult for Cannabis Industry
Entrepreneurs in the cannabis industry face different challenges than companies in virtually every other sector. Unlike other industries, cannabis businesses don’t have the same access to banking and advertising, forcing them to MacGyver their way through day-to-day business operations.
When it comes to advertising, cannabis companies are struggling to find good ways to promote themselves. Most mainstream media outlets are hesitant to accept marijuana-related ads, often because they have a stereotypical view of the marijuana industry or they fear a crackdown from federal regulators.
Further complicating the situation, billboards, TV spots, and other mainstream marketing options are prohibitively expensive–a hurdle for any young business. The cannabis industry is still in its infancy, and companies just starting out often don’t have a large marketing budget.
That leaves cannabis businesses forced to adapt and to find ways to promote themselves with nothing more than a metaphorical Swiss Army knife, duct tape, and a roll of twine.
So, how do marijuana businesses promote themselves effectively?
Data collected for the Marijuana Business Factbook 2017, found that developing an online presence and making connections within the cannabis community are key to compelling cannabis marketing and positive word of mouth, both online and off.
The data shows that for both plant touching businesses and ancillary cannabis businesses, word of mouth and social media are the most useful ways to market their companies, showing that good marketing and branding is essential for a cannabis business to capture an audience organically.
33.7% of plant touching businesses found that social media was the single most effective marketing/advertising method for their company, followed by 27% of plant touching businesses who found word of mouth most effective.
Ancillary cannabis businesses found the most success in marketing through word of mouth, at 38.2%; 17.8% of ancillary companies found that social media was most effective. Both plant touching and ancillary businesses cited the internet as their primary marketing tool, at 19.6% and 19.7%.
Of course, marketing on social media has its challenges as well. The rules are hazy when it comes to what kind of ads social media platforms like Facebook or Twitter allow typically only allowing advertisements that can prove “advocacy or community building”. Plus, it’s not unusual for social media pages promoting cannabis businesses to be taken down without explanation.
CU Boulder Awarded Grant to Study Cannabis Use & Behavior
The National Institute on Drug Abuse (NIDA) has awarded $5.5 million to two University of Colorado professors to study how cannabis legalization has impacted human behavior.
The study, led by behavioral geneticist John Hewitt and psychiatry professor Christian Hopfer, MD, will collect data from 1,000 sets of twins in Colorado and Minnesota ages 23 to 29 over a period of five years. They’ll be examining self-reported cannabis use and any changes in mood or behavior.
“It’s probably not a lot different than you would have seen when you moved from prohibition to alcohol becoming available again,” Hewitt told 5280. “You would expect that for many people it would be a neutral thing (legalization wouldn’t impact their behavior), for others, there’d be some benefit (to legalization) and for others, there’d be some adverse consequences.”
Recreational marijuana has been legal in Colorado since 2014, so twins in Minnesota, where recreational cannabis is still illegal, will act as the control group. Hewitt says that they hope to find out if legalization has increased cannabis use, and whether cannabis use impacts the frequency of using alcohol or other substances. They’ll also monitor any changes in the study participants as far as mood, employment status, family functioning, and educational completion.
The study is the first and only of its kind in the nation, but some are skeptical of the study because of where the funding is coming from. Allen Shackelford, a physician, medical marijuana administrator, and CDPHE Medical Marijuana Research Grants Program board member, explained that “NIDA has a history of funding studies that are intended to support their preconceptions about whether something is dangerous or not.”
Hewitt, however, said that their study is set up to look at any correlation between cannabis use and mood or behavior changes, rather than causation. Hewitt and Hopfer will be studying both identical and fraternal twins, which will help determine if there’s a correlation between genetic makeup and any changes in behavior that can be attributed to cannabis use.
“What we often find in the kinds of studies we do is that actually both the twin who uses the substance and the one who doesn’t are equally likely to show the apparent consequence (of behavior or mood changes),” Hewitt said. “…we are probably in a better position to shoot down a causal relationship than we are to establish one.”
Ken Gershman, who manages the Colorado Department of Public Health and the Environment (CDPHE) thinks that the study will contribute to the conversation around cannabis.
“Although there is much existing research on the negative cognitive and mental health effects of MJ use, much of it pre-dates (recreational) MJ legalization,” Gershman wrote to 5280 in an email. “…I think this study will contribute to and inform policy discussions.”
Hewitt plans to start recruiting sets of twins in January, and while the study is slated to last five years, he expects to begin publishing preliminary findings in one or two years.
Is Cannabis the Answer to America’s Opioid Crisis?
An editorial published by the Los Angeles Times on Monday posed a question that no one seems to be asking about the nation’s opioid epidemic: why aren’t we talking about medical marijuana as an alternative?
More than 64,000 people died from drug overdoses last year, and that number is rapidly increasing. In 2016, the number of overdose deaths rose more than 22 percent over the 52,404 drug deaths in 2015, and it’s the leading cause of death for Americans under 50.
Opioids include drugs like oxycodone, hydrocodone, fentanyl, and heroin. As highly effective painkillers, opioids are one of the most prescribed drugs in the U.S. Unfortunately, they’re highly addictive and effective pain relief requires increasing doses, raising the likelihood of overdose.
The risk of addiction and overdose associated with opioids is staggering, but there’s evidence that cannabis could be an effective substitute. Both opioids and cannabinoids, like THC and CBD, block pain signals in our nervous system. Unlike opioids, cannabis is non-addictive and has comparable therapeutic effects with none of the dangerous side-effects. Plus, CBD can reduce drug cravings and withdrawal symptoms, helping to reduce the likelihood of relapse.
Amanda Reiman, a researcher at University of California, Berkeley, released a survey earlier this year examining the opioid-based and non-opioid based pain medication. 97% of respondents agreed or strongly agreed that they could decrease their use of opioid painkillers when consuming cannabis. And 92% said that they agreed or strongly agreed that they prefer cannabis to treat their medical condition.
“The treatment of pain has become a politicized business in the United States. The result has been the rapidly rising rate of opioid-related overdoses and dependence,” she said. “Cannabis has been used throughout the world for thousands of years to treat pain and other physical and mental health conditions.”
Marijuana has negligible overdose risk and has shown a host of medical benefits, especially in treating chronic pain, yet it remains an illegal, schedule I substance. States that have legalized medical marijuana show decreased opioid use and decreased opioid overdose deaths.
About 175 people die in the U.S. every day due to opioid overdose–are the risks worth any beneficial effects provided by the drug? Should opioids even be categorized as a medicine?
Cannabis Industry is Slowly Gaining Banking Services
Since the early days of cannabis legalization, providing banking services to marijuana businesses has been fraught with uncertainty and confusion.
29 states plus the District of Columbia have legalized cannabis for medical and/or recreational use, but financial institutions are still bound by federal law, making working with cannabis companies a legal risk. In turn, cannabis companies are forced to operate entirely with cash, putting businesses and employees at risk of theft or other crime.
However, it looks like support for cannabis legalization has reached a tipping point, and the benefits or working with the industry are starting to outweigh the risks for financial institutions. Earlier this year, the Financial Crimes Enforcement Network (FinCEN) reported that banks providing services to marijuana businesses increased 22% since March 2016. At the end of March 2017, nearly 300 banks and around 50 credit unions were providing banking services to cannabusinesses. Add to that the $7.2 billion netted by the cannabis market in 2016, and it’s no wonder that more banks are engaging with the marijuana industry.
The increase is transactions between cannabusiness and banks is significant because financial institutions have to perform a balancing act: complying with federal laws and FinCEN guidelines with very little legal protection.
The only buffer banks and marijuana businesses have from regulatory and criminal enforcement is a DOJ memo issued in 2013, that holds little or no legal weight. Known as the Cole Memo, the directive acknowledged that while marijuana continues to be illegal under federal law, the Justice Department would essentially look the other way as long as marijuana businesses were compliant with state laws.
In 2014, FinCEN laid out additional guidelines for financial institutions on how to maintain compliance with the Banking Secrecy Act (BSA) and marijuana enforcement priorities under the Controlled Substance Act (CSA). FinCEN’s guidelines put the responsibility of determining whether or not any cannabis business they work with is complying with a host of requirements, including determining if the marijuana-related business is laundering money, engaging in interstate activity, or demonstrating the legitimacy of business operation or investment source.
Robert Rowe, chief legal counsel for the American Bankers Association, said “it flips the responsibility back on the bank,” and that one banker said, “the only way he could feel comfortable is if he had an employee embedded in that business 24/7.”
At the beginning of October, Hawaii became the first state to require cashless-cannabis sales. The state is using a debit app based in Colorado called CanPay, and it enables medical marijuana patients to make cannabis purchases with their smartphone.