MJ News for 02/20/2014

in Marijuana in the News Thu Feb 20, 2014 11:49 am
by 7greeneyes | 469 Posts | 1830 Points


A marijuana tidal wave?

The marijuana industry just got a critical boost in its effort to become a massive and completely legitimate business.

On Friday, two federal law-enforcement agencies released coordinated statements clearing the way for banks to take deposits from and offer financial services to marijuana producers and retailers without fear of prosecution for money laundering.

To say that this will ignite a revolution in the still upstart industry would be an egregious understatement.

"It is imperative that this legal industry have access to banking the same as every other business sector," said Mike Elliot, executive director of the Medical Marijuana Industry Group. "To continue doing business on a largely cash basis creates serious safety issues for owners, employees, and customers."

An industry awash in cash

As the legal marijuana industry develops in Colorado and Washington entrepreneurs have run up against a major problem: Banks won't provide them financial services or, for that matter, even accept their deposits, leaving retailers and wholesalers awash in copious amounts cash.

The reason is that marijuana remains an illegal drug under federal law. As a result, banking statutes and regulations make it a crime for financial companies to handle the proceeds of any business engaged in the production, distribution, or sale of the drug. In short, it would be considered money laundering.

While the coordinated guidance issued at the end of last week by the departments of Justice and Treasury doesn't change this, it does send a strong signal to financial institutions that they won't be prosecuted for providing services to the marijuana industry so long as their customers don't run afoul of eight "enforcement priorities" laid out by the Justice Department in the middle of last year.

These include preventing the distribution of marijuana to minors, preventing revenue from the sale of marijuana from going to criminal enterprises, and preventing the interstate trafficking of marijuana, among others. Short of "significant" violations like these, the Justice Department is now instructing its law-enforcement officers to concentrate their "limited investigative and prosecutorial resources" elsewhere.

For participants in the fledgling field, this is a critical step -- assuming, of course, as I believe to be true, that banks heed the guidance. In the first case, it relieves business owners of the security and accounting issues associated with conducting business in cash. In the second case, it could very well be the first step in making additional capital -- i.e., loans -- accessible to those in the industry. The latter in particular would serve as a potent catalyst for growth and expansion.

Does this mean the nation's banks will soon become accomplices in the drug trade? Yes and no. It seems safe to assume that many community banks will jump at the opportunity to curry more business, especially if it equates to a substantial increase in demand deposits like checking accounts, which pay little to no interest.

By comparison, the risk/reward analysis will be different at the nation's largest lenders. Just last year, Bank of America (ticker: BAC ) struggled over the decision of whether it would provide banking services to the state of Washington -- that is, the government itself -- given that a portion of the state's tax revenues derives from excise and sales taxes on marijuana. The Charlotte, N.C.-based bank eventually decided to do so, but the controversy alone spoke volumes.

Meanwhile, in response to a reporter's inquiry on Friday, a spokeswoman for Wells Fargo (WFC) said that "It is currently Wells Fargo's policy not to bank marijuana businesses, based on federal laws -- under which the sale and use of marijuana is still illegal." Though, to be fair, she did qualify the statement by noting, "We are reviewing the guidance."

It's still too early to say what the impact of these nonbinding guidelines will have on the banking industry. However, there's much less ambiguity about the significance of this to people in the marijuana business. Love it or hate it, the momentum behind this movement is clearly growing.

BHC# 711

"When injustice becomes law, then resistance becomes duty."
Thomas Jefferson

“I am not the lifestyle police.”- (my new hero) Pitkin County, CO Sheriff Joe DiSalvo

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RE: MJ News for 02/20/2014

in Marijuana in the News Thu Feb 20, 2014 11:51 am
by 7greeneyes | 469 Posts | 1830 Points


Legal marijuana revenue exceeding expectations

DENVER — Colorado’s legal marijuana market is far exceeding tax expectations, according to a budget proposal released Wednesday by Gov. John Hickenlooper that gives the first official estimate of how much the state expects to make from pot taxes.

The proposal outlines plans to spend some $99 million next fiscal year on substance-abuse prevention, youth marijuana-use prevention and other priorities. The money would come from a state 12.9 percent sales tax on recreational pot. Colorado’s total pot sales next fiscal year were estimated to be about $610 million.

Retail sales began Jan. 1 in Colorado. Sales have been strong, although exact figures for January sales won’t be made public until early next month.

The governor predicted sales and excise taxes next fiscal year would produce some $98 million, well above a $70 million estimate given to voters when they approved the pot taxes last year. The governor also includes taxes from medical pot, which are subject only to the statewide 2.9 percent sales tax.“Our policy of not banking marijuana-related businesses and not lending on commercial properties leased by marijuana-related businesses is based on applicable federal laws,” Wells Fargo spokeswoman Cristie Drumm told the Post.

Washington state budget forecasters released a projection Wednesday for that state, where retail sales don’t begin for a few months.

Economic forecasters in Olympia predicted that the state’s new legal recreational marijuana market will bring nearly $190 million to state coffers over four years starting in mid-2015. Washington state sets budgets biennially.

In Colorado, Hickenlooper’s proposal listed six priorities for spending the pot sales taxes.

The spending plan included $45.5 million for youth use prevention, $40.4 million for substance abuse treatment and $12.4 million for public health.

“We view our top priority as creating an environment where negative impacts on children from marijuana legalization are avoided completely,” Hickenlooper wrote in a letter to legislative budget writers, which must approve the plan.

The governor also proposed a $5.8 million, three-year “statewide media campaign on marijuana use,” presumably highlighting the drug’s health risks.

The state Department of Transportation would get $1.9 million for a new “Drive High, Get a DUI” campaign to tout the state’s new marijuana blood-limit standard for drivers.

Also, Hickenlooper has proposed spending $7 million for an additional 105 beds in residential treatment centers for substance-abuse disorders.

“This package represents a strong yet cautious first step” for regulating pot, the governor wrote. He told lawmakers he’d be back with a more complete spending prediction later this year.

The Colorado pot tax plan doesn’t include an additional 15 percent pot excise tax, of which $40 million a year already is designated for school construction. The governor projected the full $40 million to be reached next year.

The initial tax projections are rosier than those given to voters in 2012, when state fiscal projections on the marijuana-legalization amendment would produce $39.5 million in sales taxes next fiscal year, which begins in July.

The rosier projections come from updated data about how many retail stores Colorado has (163 as of Feb. 18) and how much customers are paying for pot. There’s no standardized sales price, but recreational pot generally is going for much more than the $202 an ounce forecasters guessed last year.
Mason Tvert, a legalization activist who ran Colorado’s 2012 campaign, said other states are watching closely to see what legal weed can produce in tax revenue.

“Voters and state lawmakers around the country are watching how this system unfolds in Colorado, and the prospect of generating significant revenue while eliminating the underground marijuana market is increasingly appealing,” said Tvert, who now works for the Marijuana Policy Project.

Meanwhile, The Denver Post reported Wednesday that banks holding commercial loans on properties that lease to Colorado marijuana businesses say they don’t plan to refinance those loans when they come due. Bankers say property used as collateral for those loans theoretically is subject to federal drug-seizure laws, which makes the loans a risk.

Colorado’s two largest banks, Wells Fargo Bank and FirstBank, say they won’t offer new loans to landowners with preexisting leases with pot businesses. And Wells Fargo and Vectra Bank have told commercial loan clients they either have to evict marijuana businesses or seek refinancing elsewhere.

BHC# 711

"When injustice becomes law, then resistance becomes duty."
Thomas Jefferson

“I am not the lifestyle police.”- (my new hero) Pitkin County, CO Sheriff Joe DiSalvo

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RE: MJ News for 02/20/2014

in Marijuana in the News Thu Feb 20, 2014 11:55 am
by 7greeneyes | 469 Posts | 1830 Points


(FL) Rep. Bracy plans to propose legislation legalizing recreational pot

Saying it is time to expand the discussions of marijuana to broader social and criminal justice issues, state Rep. Randolph Bracy of Orlando said Wednesday he intends to propose legalizing recreational marijuana use in Florida.

Bracy, a Democrat, said he will introduce a bill this week to legalize recreational marijuana use for adults in private settings. He said he expects state Sen. Dwight Bullard, D-Cutler Bay, to file a companion bill in the Florida Senate.

"I'm not under the illusion that this would pass," Bracy said. "But it's more so to get a start to the conversation, and maybe get it down the line."

Specifically, Bracy wants to raise issues about reports that law enforcement of marijuana laws tend to hit minority populations disproportionally; that social costs of a minor marijuana possession convictions hurt individuals for much of their lives; and that legalizing recreational use, as Colorado and Washington are doing, can create new jobs and state revenue.

Bracy said he believes Florida is moving toward public support for recreational marijuana use, even if the Legislature is not.

Yet his proposal is making both opponents and proponents of medical marijuana nervous.

"We think this is a really bad idea," said Calvina Fay, executive director of Save Our Society From Drugs, which argued against the medical marijuana proposal in the Florida Supreme Court. "This follows the course of what we've seen in other states. … This issue of marijuana being legalized for medical use is a stepping stone for legalization of recreational marijuana."

The National Organization for the Reform of Marijuana Laws – Florida, says the bill could reinforce that argument, unnecessarily, against medical marijuana.

"My concern is that the patients who really need it medically, that this may slow the process up," said NORML-Florida Director Karen Goldstein.

BHC# 711

"When injustice becomes law, then resistance becomes duty."
Thomas Jefferson

“I am not the lifestyle police.”- (my new hero) Pitkin County, CO Sheriff Joe DiSalvo

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RE: MJ News for 02/20/2014

in Marijuana in the News Thu Feb 20, 2014 12:03 pm
by 7greeneyes | 469 Posts | 1830 Points


Legalized Marijuana: Companies Moving Now To Cash In On Cannabis

As momentum builds in the U.S. toward marijuana decriminalization or legalization either for medical or recreational use, a small crop of companies is finding ways to build a business out of the demand for the psychoactive plant that has been largely illegal in the U.S. for a century.

Weed became legal in Washington and Colorado at the start of the year after voters in those states gave the go-ahead in 2012. Up north, voters could decide in August whether Alaska will become the third state to remove prohibitions on the recreational use of pot. A poll released Monday by Quinnipiac University suggests residents of New York, a state notorious for its strict drug laws, are in favor of legalizing small amounts of marijuana for personal use by a comfortable margin of 18 percentage points.

Estimates of the total value of a legal pot industry in the U.S. are hard to establish in part because the current price of marijuana is artificially high; dealing an illegal substance, after all, is a significant risk to black market dealers and buyers and with that comes a premium. A 2011 report by See Change Strategy, which focuses on growth in new markets, estimated that the value of medical marijuana alone would grow from $1.7 billion to about $9 billion by 2016.

Here are some other companies that have begun positioning themselves to cash in on this cash crop:

PetroTech Oil and Gas Inc. – The Henderson, Nev.-based oil and gas concern said Wednesday it set up a subsidiary company in Colorado and Washington called LP.US Management Group Inc. to set up deals with growers to deliver their goods to market. PetroTech claims it already has agreement with five unnamed producers in those states. The company’s website touts plans to set up branded strains, make marijuana-based edibles, butane hash oils and even pot-based topical body lotions.

Hemp, Inc. – The company specializes in products based on hemp, the tough fibers of the marijuana stem, popular among many environmentalists that view it as a natural alternative to petroleum-based fibers. As medical and recreational marijuana spreads, the company sees itself expanding relationships with growers since hemp is derived from the parts of the plant that have little or none of the active mind-altering ingredients and are typically discarded by growers who harvest the psychotropic buds of the plant. On Thursday Industrial Hemp and Medical Marijuana Consulting Company, Inc., a Hemp Inc. subsidiary announced a deal with Webxu, Inc., a Los Angeles-based digital media and e-commerce development company, that will help Hemp expand its web and mobile presences in the industrial hemp and medical marijuana industries. Earlier this month Hemp Inc. and Dewmar International BMC, Inc. agreed to market hemp-based edibles that would be qualified for sale in all 50 states.

Nuvilex, Inc. – This Silver Springs, Md.-based biotech firm is primarily involved in research and development of pancreatic and breast cancer treatments but is moving to become a player in medicinal marijuana. In December the company hired Mark L. Rabe, a physician and expert on medicinal uses for cannabis, to develop the company’s role in medical marijuana, which is often prescribed as a treatment for chemotherapy-induced nausea.

GW Pharmaceuticals PLC – This Salisbury, U.K.-based biopharmaceutical firm specializes in cannabis-based prescription medicines. In January the company signed a deal with French pharmaceutical company Ipsen SA to supply Sativex, a cannabis extract that is used to treat spasms caused by multiple sclerosis, in Central and South America.

Alternative Fuels Americas, Inc. – This biofuel company based in Hollywood, Fla., announced earlier this year it established Marijuana Holdings Americas, Inc. to “serve as a vehicle for entry into the legal marijuana sector.” The company is pursuing licensing for the cultivation and sale of marijuana for recreational and medicinal uses and says it intends to own greenhouses and retail outlets.

BHC# 711

"When injustice becomes law, then resistance becomes duty."
Thomas Jefferson

“I am not the lifestyle police.”- (my new hero) Pitkin County, CO Sheriff Joe DiSalvo

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RE: MJ News for 02/20/2014

in Marijuana in the News Thu Feb 20, 2014 12:10 pm
by 7greeneyes | 469 Posts | 1830 Points


Colorado's marijuana firms beg banks to take their cash

Elliot Klug isn't in the security business - but he may as well be.

"Let's just say we have a couple of armed staff," he says.

The owner of Pink House, a marijuana dispensary in Denver, Colorado, Mr Klug has armed his employees because he has been unable to find a bank that will accept the thousands of dollars of cash he takes in each day since recreational cannabis became legal in Colorado on 1 January.

"Even armoured cars have been told not to do business with us," says Mr Klug.

That's because while Colorado has legalised cannabis, most banking institutions are governed by federal laws which make it a crime to take money from firms engaged in the cultivation and sale of what is technically still an illegal drug.

While the Obama administration has recently attempted to convince banks that it will not prosecute them for doing business with Colorado's firms, issuing new guidance just last week, the banking industry remains unmoved.

"An act of Congress is the only way to solve this problem," says Colorado Bankers Association president Don Childears, who says he has continued to advise banks to refuse cannabis cash out of fear of money-laundering charges.

But in an industry that is projected to grow to $10.2bn (£6.1bn) by 2018, the question remains: what to do with all that cash?

'We were not drug dealers'

While the sale of recreational cannabis has been legal in Colorado only since the beginning of the year, medicinal marijuana has been legal for over a decade.

And for most of that time, those "ganja" firms had access to legal banking, including Simply Pure, a medicinal marijuana edibles business.

"While everybody else was still focusing on brownies and cookies we took it a step further. We did marinara sauce, green chillies, mango salsa, peanut butter," says Wanda James, who co-founded the firm in 2010 with her husband Scott Durrah.

"There's really only so many brownies you can eat in a given week."

Within a year, they were doing business with more than 400 dispensaries in the US.

But that all came to a screeching halt in 2012, when Wells Fargo suspended their bank account.

"They said we're ending all relationships with anybody doing anything with cannabis. Even though they were clear as to who we were - we were not drug dealers or cartel members," recalls Ms James.

They were forced to close the firm months later.

Not a high priority

For a while, "there was an environment where some banks did [accept business from] cannabis firms, probably unknowingly because none of us really focused on the issue. Once it was surfaced by the Department of Justice then everybody started getting concerned," explains Mr Childears.

"I think the end result was most people have concluded that banks can't be in this business."

And banks have been unmoved by the Obama administration's seemingly supportive stance, noting that the Department of Justice has issued four different positions on banks and cannabis in the past two years.

"We need more permanence than that. We need to know this is going to last for years," says Mr Childears.

The problem is that the executive branch - the one that Mr Obama controls - is not the one that dictates banking laws and regulations.

Bankers fear not just jail, but also the suspension of their banking licences and steep penalties if they are caught violating these laws, most notably the Bank Secrecy Act and the Anti-Money Laundering Act, which are designed to prevent money laundering.

Also, while the marijuana industry is projected to grow into a booming business, it isn't yet. It's worth $1bn a year - banks in Colorado take in more than $100bn.

"Quite honestly banks don't care a lot right now - it's not a high priority for them at this point in time," says Mr Childears.

'Third-class citizens'

Medicine Man Denver is one of the biggest operators in the area. Its warehouse lies on an unassuming industrial stretch but inside, the 20,000 sq ft (1,850 sq m) facility is essentially a weed factory.

A security guard greets customers, asking "Medical or recreational?" before asking to see some ID to prove they are over 21.

At lunchtime on a recent Thursday, the line of buyers was nine deep, and included middle-aged couples, tourists from Texas, and a few tried-and-true types.

Each day, the firm does thousands, if not hundreds of thousands, of dollars of business.

Although for a while they were forced to forgo banking support, they are one of many firms here that have quietly worked out an agreement with a local bank.

But it is still not ideal: the bank will not provide loans.

"It's costly banking and it's liable to go away at any point," says Sally Vander Veer, who runs the firm with her two brothers.

So Medicine Man constantly plans for what would happen if it had to go back to being an all-cash firm, even as it expands its operations to encompass 40,000 sq ft.

"It's really tough - we're a legitimate industry, we have been written into the constitution of Colorado and yet we're still treated as third-class citizens on many levels," says Ms Vander Veer.

It is a sentiment echoed by Wanda James, who says she and her husband remain committed to restarting Simply Pure one day.

"The state of Colorado has received over $20m of revenues and yet they can take that money and deposit it into their bank. But we can't deposit the same money into our bank," she says.

"The minute we can have a real business with access to capital and credit cards we will be back."

But with Congress divided and banks digging in, it looks like cannabis in Colorado will remain in the weeds for a time to come.

BHC# 711

"When injustice becomes law, then resistance becomes duty."
Thomas Jefferson

“I am not the lifestyle police.”- (my new hero) Pitkin County, CO Sheriff Joe DiSalvo

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RE: MJ News for 02/20/2014

in Marijuana in the News Thu Feb 20, 2014 12:13 pm
by 7greeneyes | 469 Posts | 1830 Points


Cannabis can kill without the influence of other drugs

The first full post-mortems of people who died after smoking cannabis suggest that the drug can kill unaided.

Cannabis has been known to cause death when laced with other substances, by triggering a heart condition or by causing respiratory cancers. But whether it can be directly lethal has remained unclear. A 2011 report from the UK Department of Health says no cases of fatal overdose have been associated with cannabis.

But earlier this month, a UK coroner's report found that a 31-year-old woman died from a marijuana overdose. So can it be fatal?

Benno Hartung of University Hospital Düsseldorf in Germany and his colleagues conducted post-mortems on 15 people whose deaths were linked to cannabis use. To rule out other factors that might have contributed to death, such as alcohol use or liver disease, they performed numerous tests, including an autopsy, a toxicology exam, genetic tests and histological analysis of all organs. "It's a diagnosis of exclusion so you have to rule out all other possibilities," says Hartung.

Two of the deaths could not be attributed to anything but cannabis intoxication. Both were men who died of cardiac arrhythmia – when the heart beats too quickly or slowly. The team surmises that this was triggered by smoking cannabis. Both men had enough THC – an active chemical in cannabis – in their blood to suggest they had taken cannabis within hours of death. Neither had a history of cardiovascular problems or channelopathies – diseases that increase the risk of heart problems by affecting ion channels. "We did every test we could," says Hartung.

Long-term effects

It is not clear how cannabis could trigger arrhythmias. There might be unknown channelopathies that increase the risk of cardiac conditions triggered by the drug, says Hartung.

Even so, says David Raynes at the UK National Drug Prevention Alliance,"these deaths are rare and will remain rare. The real risks are from long-term effects on the young brain."

Several studies show a link between cannabis use and an increased risk of schizophrenia, depression and a lowering of IQ. However, many of these studies remain contentious.

"Even though it may be rare, I hope others investigate death by cannabis intoxication in other cities," says Hartung, "particularly in light of the increased use of cannabis for pain relief."

Journal reference: Forensic Science International, DOI: 10.1016/j.forsciint.2014.02.001

BHC# 711

"When injustice becomes law, then resistance becomes duty."
Thomas Jefferson

“I am not the lifestyle police.”- (my new hero) Pitkin County, CO Sheriff Joe DiSalvo

Scroll up


RE: MJ News for 02/20/2014

in Marijuana in the News Thu Feb 20, 2014 12:15 pm
by 7greeneyes | 469 Posts | 1830 Points


S.C. Republican senator introduces medical cannabis bill

Mary Louise is a six-year-old epileptic child in Charleston. Sometimes she has more than 100 seizures in an hour, says her mother Jill Swing. And while they aren’t life threatening, Mary Louise has busted a lip and knocked out her teeth because of seizure-induced falls. Doctors have put her on different medications since she was a baby, but the seizures won't go away. However, her doctors believe there is one drug that might work, but it’s illegal in South Carolina: cannabidiol (CBD), a non-psychoactive chemical in cannabis.

The Swings are now thinking of moving to Colorado so their daughter can get the medicine she needs. But they've put that thought on hold thanks to a new bill filed today by Sen. Tom Davis (R-Beaufort).

When Davis heard the Swings’ story, he began researching South Carolina’s pot policies. He discovered that lawmakers passed a medical marijuana law in 1980 called “The Controlled Substances Therapeutic Research Act,” which allows the director of the state’s health agency to obtain and distribute marijuana to treat certain medical ailments. But no program based on that law is currently up and running. That’s because there is a caveat in its language that says the director can only obtain marijuana through means that are consistent with federal law, and the feds classify pot as a Schedule 1 controlled substance. So the law has essentially remained dormant.

Today, Davis filed a bill that would revise the law to authorize the state Department of Health and Environmental Control to engage in clinical studies regarding certain medical therapeutic uses of marijuana.

“I realize that federal law still classifies cannabis as a Schedule 1 controlled substance,” Davis says. “But as the FDA itself has acknowledged, it makes no sense to ban CBD oil, a non-psychoactive chemical derived from cannabis. You can’t get high on it and it has no street value, and it makes zero sense to legally prohibit doctors from prescribing something that would relieve their patients’ suffering.”

Swing says she’s talked to her daughter’s doctors about whether medical marijuana in the form of cannabidiol oil might help.

“They are very on board with it,” she says.

BHC# 711

"When injustice becomes law, then resistance becomes duty."
Thomas Jefferson

“I am not the lifestyle police.”- (my new hero) Pitkin County, CO Sheriff Joe DiSalvo

Scroll up

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