Out with the old cannabis, in with the new – 

As we close out the year, we thought it would be a great time (as did everyone else, most likely) to take the opportunity to look at where things stand with cannabis in the US and Canada and what might be upcoming next year with legalization, enforcement, compliance and banking. 

In no particular order and with no particular emphasis –

Cannabis banking –

Conditions have improved somewhat, and there are approximately 400 banks in the US that are willing to work with state legal cannabis companies in a transparent, knowing manner.  While that may sound like a lot of banks, it’s not.   There are nearly 13,000 banks and credit unions in America, and that doesn’t even begin to count all the branches these financial institutions have between them. 

[LISTEN: Cannabis Banking: Cole & FinCEN – Part 2 – PODCAST EPISODE]

Cannabis is still public enemy #1 for a certain AG from Alabama (like we haven’t seen enough of that state to last a lifetime this year…), and while the Cole Memo survived a late December list of rescinded DOJ memos and orders, one has to get the feeling that he’s just waiting to pounce.  It’s difficult for the DOJ to allocate resources towards prosecutions and investigations for the state legal industry, but if that budget appropriations language should happen to fall out of the finalized budget at any point, all bets are off. 

Cannabis legalization – 

West Virginia jumped onboard with the Medical Cannabis Act in April of this year, and New Hampshire Gov. Sununu signed a decriminalization bill as well, bringing the totals up to 16 CBD states, 29 medical marijuana states and eight recreational, or adult casual, usage law states.

[WORKSHEET: 3 Steps to Creating an Effective Mobile Marketing Strategy – FREE DOWNLOAD]

The CBD states are fairly unimportant at the moment, since hemp oil is controlled by a different set of rules and laws, as long as it’s grown in a few specific locations, or it’s imported from another country.  Yes, we know, big bunch of hypocrisy, but what can you do?  Laugh about it, one could suppose. 

Canadian cannabis – 

In an odd twist of events, Trudeau backed away from the July 1 legalization date – seeming to say that he had no idea where or how people had gotten the idea that it was going to be July 1…  months and months after it’s been in the news, in the provincial government discussions, and everywhere else on the planet as the announced date. 

And those poor people, Mark and Jody Emery, facing $150,000 each in fines for their arrest in Toronto earlier this year on black market selling charges.  

[CANNABIS BANKING: Find out if you may qualify for deposit banking or transaction processing]

Another concerning development in the Canadian expansion into legalized cannabis sales is the prohibitions and restrictions on advertising that seem to be coming as part of the plan.   If event sponsorships and advertising are prohibited, except in certain specific circumstances (CannabisWallet appears to be, at the moment, a compliant vehicle for cannabis advertising), there are a large number of lifestyle advocates, brand ambassadors and product companies that could feel the pinch from it. 

Cannabis commerce – 

Sticking with the Canada theme here, Shoppers Drugmart is reportedly super close to having their own brand ready to go by, err, summer, I guess is the new target date, since the July 1 thing is up in the air.  Long ago in a land far away, I arrived to college to find the local drugstore sold K&B Brand vodka, rum, beer, etc and it was a strange sort of reality coming from a state that owned all the liquor stores and was closed on Sundays and holidays and most of the dark hours each day. 

MJBizCon ditches Vegas in response to a lot of nonsense from the casino control board and now Vegas is sad about it.  More than 18,000 people showed up for the November conference in Vegas, putting it on a par with many mainstream attendance levels, and now the powers that be are meeting to decide whether or not they’ll take the risk of hosting the cannabis industry in Vegas in the future, since Republican (can you believe it?!?) Governor Sandoval has decided that cannabis is GREAT for Nevada.  

Onward + upward in 2018

While we don’t technically have a crystal ball, we do have a few ideas about what might be coming down the pipe (see how we did that?) in the new year, and some thoughts about where the industry – should, might, could – choose one to suit yourself – be going as we head into the continuing insanity that we’ve come to know as our own here in the US. 

Canada is going to be big – 

The impending legalization in Canada is a huge deal.  The way it’s getting worked out, with the provinces sort of being in control, but with the federal government deciding to interject at all kinds of odd times (see Trudeau’s amnesia above), it still remains to see how this is going to play out. 

The industry is, of course, going to be dead set against many of the rules and regulations, especially in regards to advertising, sponsorship and branding; and with very good reason if you’re asking for an opinion from this peanut gallery.  Marijuana has been a big part of Canadian lifestyles for years, and slapping a legal sticker on the product isn’t going to cause the schoolkids to start toking as if they’d never even heard of the stuff prior to now. 

California is going to be bigger – 

This is, of course, the easiest prediction for anyone to make.  California is ushering in the era of casual cannabis (don’t you love the idea that if you rename it something else, it becomes something else?) sales to the general public and initial estimates are so darn big that they’ll probably be wrong by a lot…  our guess is that the estimate of sales is WAY LOW and just like in Nevada, it will turn out to be much more lucrative for the state and those involved in the industry. 

The biggest problem with big parts of the California industry is the backlash against just how much it’s going to cost to become legal, compliant and properly licensed.  Too many growers and processors have been living in the shadows for the past decade – or more – and the thought of giving the government 30% of more of their income in the form of taxes is not sitting well with a lot of these guys.  

US DOJ presents interesting issues

Without touching on any other parts of American politics, we’re going to spend some ink talking about the Department of Justice and why there is very likely a big dustup coming, and it’s almost impossible to predict the outcome of the scuffle, err, pitched battle and siege-like tactics that Sessions could employ against its own citizens, who have said – time and again – that they want legalized cannabis in the country. 

California is certainly the elephant in the corner of Sessions’ living room, dining room and even his bedroom (eww, that is just icky) perhaps.  The current reported medical market is larger than the combined entire market of Washington, Colorado, Oregon, Nevada, and Arizona.  The underreported, unreported, and black market probably doubles the amount of weed being grown and sold in the state, and it’s certainly not going to all find its’ way to becoming licensed product after the bell tolls for the last time this calendar year.  

Fortunately for the industry, the DOJ is embroiled in so much Russia, Mueller, Clinton and so on controversy and scandal at the moment that it’s got to be hard for them to find the manpower and the time to put forth a concerted effort against the state legal cannabis industry.

Unfortunately for the industry, I doubt that statement is entirely true.  It’s funny how priorities manage to wend their way to the top of the heap, even when they should be somewhere in the middle or lower on the totem pole (how’s that for a bunch of mixed metaphors!), based on personal preferences and other factors.  It would be more surprising if Justice doesn’t have a cadre of junior lawyers trying to figure out how to prosecute state legal cannabis (if the budget appropriations language sticks) successfully in the new year.  

The return of civil asset forfeiture

This is such a sore subject for me.  It’s really the most effective way for the DOJ to start harassing and haranguing the state legal companies and business owners.  There’s no need to have a law that says one can or cannot grow or distribute marijuana or hemp if the alternative is to confiscate – without a conviction – the property of people who are attempting to do so. 

Persecution instead of prosecution is really what we're looking at here. Click To Tweet

I’ve said a million times, if the government wanted to shut down cannabis, they should reschedule it to a CSA 2, and force everyone to go through the FDA testing process, pick up the prescriptions at the Walgreens, and require doctors to be licensed to prescribe the drug, not just to recommend the treatment. 

Although the reality is that the government, at this point, has no business shutting down cannabis at all.  The overwhelming majority of people in this country believe it should be legalized in some form or other, and when states take to the voting booths to enact laws that directly contradict what the federal legislation says, obviously we have a perception issue.  

Leaving that rant for another day, I’ll bet on the feds coming into California with civil asset forfeiture and utilizing conservative local law enforcement to do their dirty work for them initially.  That way they can maintain a hands off appearance, while orchestrating the big moves from the shadows.  I give it until the end of March before this starts happening, provided there’s not a complete implosion of the federal government, or perhaps Sessions being removed from office for his part in the Russia situation. 

How will the standoff end?  

Good question.  I think California will survive the onslaught, there’s too much money and too many peoples’ livelihoods at stake for everyone to just roll over and give up when the first salvo is fired.  I also really like Cat Packer, the LA city drug czar…  I’m sure there are many who don’t appreciate her particular style of handling things, but I think that overall she’s a great choice for the city.   I’m sure she’s got some ideas up her sleeve about how to manage things if the feds do decide to come knocking on the SoCal door instead of the SF door first…  

Have a comment?  Stop by our LinkedIn page and let us know what you’re thinking!