Legal Marijuana Sales in North America
Legal marijuana sales in North America reached $9.2 billion in 2017. The legal cannabis market is expected to soar to $24.5 billion by 2021, according to Arcview Market Research.
One of our largest problems in The Cannabis sector is banking. Marijuana is still illegal at the federal level and thats who regulates banks and they do not want the problems.
That troubling situation inspired a California Democrat, Hertzberg – who represents Los Angeles’ San Fernando Valley, to introduce SB 930 to the California Legislature in April. The bill allows for the creation of limited charter banks and credit unions to service cannabis businesses at the state level. It would also allow marijuana firms to use special purpose checks issued by these institutions to pay for state and local taxes, rent, and goods and services.
The law, which has bipartisan support, aims to have cannabis firms store their cash in the vaults of some of the 914 bank branches in the state that have closed since 2014. What an amazing idea. Repurpose existing infrastructure!
I LOVE NY
Back in June as New York state made moves to go legal, the once-staunch prohibitionist Gov. Andrew Cuomo has reversed course and come out in favor or recreational cannabis. It’s amazing how the thought of revenue can change a politicians mind.
Now, we’re getting some more good news from this hugely populated state.
The New York Department of Financial Services has decided against imposing any regulatory action against banks that work with companies in the medical marijuana industry. An awesome move on their part!
That makes sense.
In some cases, New York companies are paying their employees with envelopes stuffed with cash – and their taxes as well. That’s according to Maria Vullo, the New York state superintendent of financial services. I really don’t understand the trouble with that except the fact the government has trouble tracking your movement of cash.
A high NY State financial official wrote “None of this is necessary,” in a guidance to the state’s financial institutions issued July 3. “Positions taken by the federal government are only exacerbating these problems, rather than remedying them. New York must act.” A call to action to keep the cash moving in the Empire State.
We’ve talked a bit about how the federal prohibition against cannabis is hindering the banking abilities of marijuana firms in the United States – but it doesn’t stop there. It has global impacts!
This archaic U.S. policy doesn’t only impact Cannabis businesses at the state, or even national, level. In fact, the 2001 USA PATRIOT Act, specifically Section 319(b), allows the federal government to seize what it considers “illicit funds” by issuing subpoenas to any foreign bank that maintains a correspondent account in the United States.
In other words, any bank that deals with a Cannabis firm – even one that resides in fully legal Canada or Uruguay – and that has a banking relationship with a U.S. bank to conduct cross-border transactions could be considered a money launderer according to the PATRIOT Act.
That basically covers almost any major bank in the world, according to a report on the topic coauthored by the Brookings Institution’s John Hudak.
In practical terms, Canadian cannabis firms do have access to local banks, like Alterna Savings, which acts as the bank for at least one of the companies on the list you received if you signed up for my email list., Canopy Growth Corp. (Nasdaq: CGC). The Bank of Montreal also helped financing deals with Canopy and other Canadian marijuana firms. A great sign that the Canadian government and business institutions are all embracing their legalization wholeheartedly!
And so far, the United States hasn’t gone after any American banks with correspondent relationships to foreign banks that work with cannabis firms, according to Cannabis Wire . But this is an issue an issue worth watching.
The President’s Favored Bill
Now, the obvious step that cannabis firms in the U.S. need to take to shore up their basic banking abilities is a change to federal law. And this year has seen a virtual whirlwind of bills getting proposed by various members of Congress.
In fact, there have been 41 pro-cannabis bills introduced this year in Congress, about the same number that lawmakers submitted from 1999 to 2015, according to a Marijuana Business Daily analysis. With the most liberating ones coming as I write.
It’s surely a sign lawmakers are feeling the heat from constituents who support legalization in some form or another. Some, like Senate Majority Leader Mitch McConnell of Kentucky, who is looking to legalize industrial hemp in the latest farm bill, are changing their minds due to the potential positive economic benefits that legal marijuana is bringing to their states. Also they are realizing that Hemp should not be lumped in with Marijuana. Kentucky is already producing and selling industrial hemp oil illegally under the 2010 Farm Act which gave the States the right to grow industrial hemp for research. Well it didn’t take long for the industry to realize the monetary windfall from this amazing plant. They are in defiance of Federal Law just as other states like California, Oregon and Colorado are doing the same thing
Of course, some of these bills have little chance of making the grade, such as Senate Minority Leader Chuck Schumer’s decriminalization bill. It is very optimistic and would take some real politicing to win over enough votes but we shouldn’t not support it! We should get behind every effort to get rid of CANNABIS PROHIBITION!
But one in particular has a good chance of making it out of committee. Now, this bill not only happens to be supported by a bipartisan group of backers, but even President Donald Trump says he’s supporting it.
And if it passes, it’ll bring relief to cannabis companies’ banking woes…
Sponsored by Republican Sen. Cory Gardner of Colorado, the bill would “eliminate the basis for a subpoena if the bank was acting in accordance with state law,” according to a spokesperson for Democratic Sen. Elizabeth Warren of Massachusetts, who’s also sponsored the STATES Act.
If it passes Congress – and if President Trump signs it, as he’s suggested he will – any legitimate cannabis firm will be able to use the banking system that virtually all other American companies now take for granted. This is truly what should happen. The stigma of POT is gone!
And that’ll be great news for the best marijuana firms on the market.
I would love to hear what you think. Leave a comment or email me at firstname.lastname@example.org
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Thanks for stopping by, Dennis Darragh
Keep in mind that legal marijuana sales in North America are soaring to new levels and opportunities abound!