MJ News for 02/21/2014

in Marijuana in the News Fri Feb 21, 2014 12:09 pm
by 7greeneyes | 469 Posts | 1830 Points


Colorado Expects to Reap Tax Bonanza From Legal Marijuana Sales

DENVER — For Colorado’s new flock of recreational marijuana growers and sellers, Thursday was Tax Day — their first deadline to hand over the taxes they had collected during their inaugural month of sales. And as store owners stuffed cash into lockboxes and made the nervous trek to government offices, new budget numbers predicted that those marijuana taxes could add more than $100 million a year to state coffers, far more than earlier estimates.

The figures offered one of the first glimpses into how the bustling market for recreational marijuana was beginning to reshape government bottom lines — an important question as marijuana advocates push to expand legalization beyond Colorado and Washington State into states including Arizona, Alaska and Oregon.

In Colorado, where recreational sales began on Jan. 1 with hourlong waits, a budget proposal from Gov. John W. Hickenlooper estimated that the state’s marijuana industry could reach $1 billion in sales in the next fiscal year, with recreational sales making up about $610 million of that business.

“It’s well on its way to being a billion-dollar industry,” said Michael Elliott, executive director of the Marijuana Industry Group, a Colorado trade association. “We went from 110,000 medical marijuana patients to four billion people in the world who are 21 and up.”

In the budget proposal that Mr. Hickenlooper released Wednesday, his office said the state could collect about $134 million in taxes from recreational and medical marijuana for the fiscal year beginning in July. He proposed to spend $99 million on programs including substance-abuse treatment, preventing marijuana use by children and teenagers, public health and law enforcement.

“This package represents a strong yet cautious first step toward ensuring a safe and responsible regulatory environment,” Mr. Hickenlooper wrote in the proposal.

In Washington, where retail sales of marijuana are expected to begin in June, budget forecasters estimated Wednesday that marijuana could bring the state nearly $190 million in taxes for the four years beginning in the middle of 2015. That money would go to a variety of health and substance-abuse programs, and the state’s general fund.

“Every governor and legislator in the country will be like, ‘Hey, check out these numbers,’ ” said Reuven Carlyle, a Democratic state lawmaker from Seattle who is chairman of the House Finance Committee.

For marijuana advocates, taxes were one of the major selling points of legalization. They have said that expanding the market for the federally prohibited plant could give states money for school construction, health care, substance-abuse programs and public health. Colorado’s legalization measure said $40 million in tax revenue would go toward school construction, and in November, voters across this otherwise tax-averse state overwhelmingly approved 25 percent taxes on recreational marijuana.

But opponents, and some skeptical economists, say the dreams of a windfall are far too optimistic. They worry that the higher costs of enforcement and regulation could outweigh any tax revenue from marijuana sales.

Officials in Colorado and Washington warned that the marijuana revenue numbers were only their best guesses for the moment and could shift, depending on marijuana prices, demand, the number of cities that prohibit marijuana retailers and other factors. In Washington, where retail sales have not begun, Mr. Carlyle said it was far too early to say how marijuana might affect the state’s pocketbook.

“Many of us have been emphatic at trying to temper expectations,” he said.

Across Colorado, Thursday was one of the most nerve-racking days of the year for marijuana businesses. Some sellers have hired third-party companies to handle their finances, but many run almost entirely on cash because so few banks are willing to do business with them.

To pay their sales taxes — often their largest expense of the month — owners said they had set aside tens of thousands of dollars in secure locations and driven in pairs to deposit it with government officials. Brooke Gehring, owner of Patients Choice, a chain of dispensaries, sent an armed guard with the employee who ferried $140,000 in taxes to several local and state agencies.

Caitlin McGuire, an owner of the Breckenridge Cannabis Club, said she tucked her tax payments into a lockbox several days ago and made the drive to Denver from Breckenridge, Colo., with a co-owner of the business.

“We just try to be as discreet as possible,” she said. “You feel like you’re walking around with a target over your head.”

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 02/21/2014

in Marijuana in the News Fri Feb 21, 2014 12:11 pm
by 7greeneyes | 469 Posts | 1830 Points


(GA) Bill to legalize medical marijuana hits snag in committee

ATLANTA — A push to legalize medical marijuana in Georgia may have hit a snag, but families who support the bill though are far from giving up.

One powerful critic of the current medical marijuana bill told Channel 2’s Lori Geary she has some real concerns about the safety of cannabis oil. It's not FDA approved and could actually hurt young patients over time.

Supporters of the bill said they remain hopeful the bill will move forward.

“Most of these kids having seizures, like my son Hawk, don't have other options,” said parent Katie Harrison.

Katie and her husband John wheeled their 15-month-old son, Hawk, through the halls of the state Capitol, hoping to win over legislators who still have concerns about a medical marijuana bill stalled in a House committee.

“What you have is science versus emotion. There is no proof,” said Republican State Rep. Sharon Cooper, who chairs the committee hearing the bill.

Copper says although the cannabis oil, known as Charlotte's Web in Colorado, where it's legal, is showing promise in kids with severe seizure disorders, there's been no FDA clinical trials.

She says hospitals in Georgia wouldn't touch it for fear of losing their federal funding.

“There's a reason for animal trials. Otherwise, you're using children as guinea pigs,” Cooper said.

Cooper said she's passionate on the issue because she used to teach pediatric nursing. She said there's a British company already producing medical marijuana approved for clinical trials.

“I'm hoping we will be able to get what is already FDA-approved and start that into clinical trials and try to help these families,” Cooper said.

But the families say they may not be able to wait that long, wondering what happens if their child gets the placebo.

“We won't stay here and watch nothing work and if it doesn't, we have to move,” said Katie Harrison.

“It doesn't matter if it's a seizure disorder or they scrape their knee. You're going to fight for them, especially as a dad. All men know we want to fix things, this is one thing I can't fix, but this is a way I can fight for him,” said John Harrison.

Supporters of the bill gained some national ammunition Thursday.

The Epilepsy Foundation came out in favor of medical marijuana, saying if patients and doctors feel the benefits outweigh the risks, and that families need to have that legal option now.

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 02/21/2014

in Marijuana in the News Fri Feb 21, 2014 12:14 pm
by 7greeneyes | 469 Posts | 1830 Points


Banks balk on marijuana money despite US guidelines

The Obama administration has sent a message to the nation's bankers: Even though the sale of marijuana is a federal crime, they can provide service to this new industry without fear of prosecution, but only if the bankers follow a detailed list of guidelines.

Many praised the move as giving financial institutions "the green light" to finally serve the multibillion dollar cannabis industry. But the nation's bankers don't see it that way.

They say the guidance from the Department of Justice and the Department of Treasury doesn't change the fact that possession or distribution of marijuana violates federal law, and any bank that supports those illegal activities could be prosecuted or sanctioned.

The Colorado Bankers Association called the guidance a red light. The association's senior vice president, Jenifer Waller, said the government outlined "all the risks involved of banking the marijuana industry" and "made it very clear that financial institutions can still face criminal liability."

Waller told CNBC financial institutions in Colorado would like to service the legal marijuana industry in that state, but she does not know of a single one that changed its position as a result of the federal memos released last week.

"Operating on a memo that is in conflict with the law is just unwise for any business, including financial institutions," Waller said.

Jim Pishue, president of the Washington Bankers Association, points out that guidelines don't supersede federal law, which categorizes marijuana as a controlled substance that cannot be legally sold anywhere in the U.S. And guidance, he noted, can change at any time.

"The guidelines may give some a little bit of confidence, but I don't think it will give them enough to bank these folks," Pishue said.

The National Cannabis Industry Association believes it's too soon to know what effect the new guidance will have. The association has praised the feds for providing a roadmap for financial institutions that want to work with legal marijuana businesses.

"We don't need every bank in America or even every bank in Colorado and Washington to suddenly start offering accounts to our businesses," said Deputy Director Taylor West. "I think there will be some very smart banks and credit unions that will recognize that this is a potentially valuable new industry for them."

And that may happen—eventually.

teve Hudak, spokesman for the Financial Crimes Enforcement Network at the Treasury, told CNBC that in preparing its guidance, the agency learned that there are financial institutions interested in accepting this business.

"Let's give it some time and see if they come forward," Hudak said. "We tried to make it clear that financial institutions can offer services to these businesses and still comply with their obligations under the Bank Secrecy Act."

And here's another sign that big banks don't want to touch this business: Wells Fargo and FirstBank have decided not to refinance commercial loans to landowners who lease to marijuana businesses. The banks told The Denver Post that this property, when used as collateral, could be seized under federal drug laws.

Who will be first?

Some have suggested that small community banks may be the first to step up to the plate because the revenue from marijuana businesses would be more significant for them.

Karen Thomas, senior executive vice president for government relations and public policy at the Independent Community Bankers of America, said most of its members still feel it's too risky to take the plunge. Another stumbling block: The new guidelines require a lot of paperwork and due diligence to satisfy federal regulators and prosecutors.

"And that due diligence is still very burdensome and prohibitive," Thomas said. "It's very compliance intensive and risky if the bank misses something."

For example, the Justice Department would expect a bank to make sure any marijuana business with an account did not sell pot to minors, is not involved in illegal activities and that the cash flow of that business is what would be reasonably expected.

In addition to all the monitoring, the bank would have to file suspicious activity reports with the federal government anytime there was a cash transaction of $10,000 or more.

"Those are things that are very difficult for a bank to be confident enough about to go ahead and provide the banking service," Thomas said. "I think those hurdles are just too great to overcome."

The pitfalls of a cash-only business

Licensed and regulated pot shops are doing a booming business in Colorado after voters approved recreational marijuana use. The first retail stores are expected to open in Washington this summer.

Customers must pay in cash—no checks, no credit cards and no debit cards. The cannabis industry in the U.S. is a cash-only business, with all the problems that creates. A busy pot shop in Denver can handle about $25,000 a day.

"It's crazy," said Brian Ruden, who owns Starbuds in Denver and runs his business on cash and money orders. It's not only "extremely inconvenient," but it creates a security nightmare.

"We have secured rooms, and within those secured rooms we have secured locking safes and sometimes within those safes we have money safes," Ruden said. "That won't stop someone from coming in and trying to rob us."

John Davis, who owns Northwest Patient Resource Center, a medical marijuana facility in Seattle, plans to meet with a bank next week to see if it is willing to take his business. He calls it "frustrating and ridiculous" not to have a bank account for his business.

Because his customers can't pay with a check or credit card, Davis bought an ATM for his lobby, and he stocks it with cash every day.

"You need a bank to pay taxes, to pay vendors and to pay employees," Davis said. "Without a bank you have to keep the cash on site, and people realize this and that can make you a target for theft."

Calls for Congress to act

The financial industry will need more than a few signals from the White House that it's safe to bank legal marijuana businesses.

Bankers and those in the expanding legal marijuana business want Congress to change the law—to make it clear that it's not a crime to provide financial services to the legal marijuana businesses.

Reps. Denny Heck, D-Wash., and Ed Perlmutter, D-Colo., have introduced a bill that would do just that. The Marijuana Business Access to Banking Act would prohibit any federal banking regulator from "prohibiting, penalizing or otherwise discouraging a depository institution from providing financial services to a marijuana-related legitimate business."

It would reduce the requirements for suspicious activity reports and grant immunity from federal criminal prosecution or investigation simply for providing financial services to a legal marijuana-related business.

"The law needs to reflect the changes that are going on in so many different states across the county," Permutter said. "So long as that state has licensing and a regulatory structure in place then that should suffice to allow these guys to go forward with their banking."

Heck says it's impossible to have a regulated market for legal pot sales when everything is done in cash.

"You can't track cash. No good can come from it," Heck said. "It's like putting out the welcome mat for organized crime. They're also ripe to be tax evaders and to slip out from the regulated market."

The congressmen realize their bill has no chance of passing anytime soon, but they want the House to hold hearings this spring to start focusing on the issue.

"I'm not going to stop pushing for our bill," Heck said. "It is absolutely needed in order to keep this from continuing to be a black market product."

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 02/21/2014

in Marijuana in the News Fri Feb 21, 2014 12:16 pm
by 7greeneyes | 469 Posts | 1830 Points


High sales? Genius Girl Scout sells hundreds of cookies outside cannabis clinic

An enterprising Girl Scout has demonstrated her brilliant business acumen by selling boxes of cookies outside a cannabis clinic.

Danielle Lei, 13, pitched up outside The Green Cross medical centre in San Francisco with her mother, enticing patients with the munchies to try their baked treats.

And the teenager had no shortage of customers, selling a total of 117 boxes.

‘It’s no secret that cannabis is a powerful appetite stimulant, so we knew this would be a very beneficial endeavour for the girls,’ Holli Bert, a Green Cross staff member, told Mashable.

‘It’s all about location, and what better place to sell Girl Scout cookies than outside a medical cannabis collective?’

The Girl Scouts of Northern California (GSNC) said it didn’t have a problem with the sale of cookies outside the clinic.

‘Girls are selling cookies, and they and their parents pick out places where they can make good sales,’ said GSNC communications director Dana Allen.

‘The mum decided this was a place she was comfortable with her daughter being at. We’re not telling people where they can and can’t go if it’s a legitimate business.’

Danielle is set to return to the clinic this weekend, with all the money she makes going towards supporting the Girl Scouts organisation worldwide.

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

Last edited Fri Feb 21, 2014 12:17 pm | Scroll up

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