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Cannabis Prohibition is Over

For the last seven years, I have had a unique seat in the war on cannabis prohibition, and I am proud to announce that the war is over.

For me, the first battle was lost seven years ago when I suffered a life-threatening attack of peritonitis and subsequently discovered that cannabis stopped nausea better than any pharmaceutical could. There really is substance to the medical value of cannabis, and everyone from my personal physician to Dr. Sanjay Goupta agrees. This is not a political issue; this is a personal health issue. The government is wrong about the Schedule 1 status of cannabis, and they know it.

In 2009, Attorney General Eric Holder issued a memo directing the Federal government to make the enforcement of cannabis laws their lowest priority in legalized states that have a regulated medical cannabis program. In 2010, Colorado formulated the first for profit medical marijuana program that included a state-issued license for both dispensaries and patients.

Colorado’s government devised elaborate rules for the industry to qualify for a license. Applications are 600-pages long. However, with thousands of dispensaries online using point of sale and inventory control systems with cloud-based data stores like MJ Freeway, retailers are in compliance, meeting or exceeding government mandates for cannabis monitoring and tracking. RFID tags follow each plant as its makes its brave journey from sprout to agricultural testing to vape pen. On the cash collection side, in-store ATM kiosks allow for secure, risk free deposit of cash and receipt print-outs, adding another layer of tracking and reporting. The possibility of cash being misappropriated, lost or stolen, is eliminated.

Other technologies exist to keep everyone’s nose clean. There is a way to meet state regulations and prove it.  Software and cloud applications making compliance possible has led to the remarkable opportunity for patients to use cannabis legally to heal themselves.

Unlike many cannabis legalized states, the California program is not without its conflicting laws, which has led to the unfortunate result of DEA raids and the shuttering of hundreds of cannabis“collectives”.

According to the California laws, marijuana must be distributed through a not-for-profit collective. Therefore, there is no sale, and no sales tax is ever collected. However, the California Board of Equalization will shut down any business where sales tax is not collected. You are guaranteed to be illegal in California by breaking one rule or the other. In other words, there is no legal way to operate a legal dispensary in California. Because cannabis is the leading cash export crop in California, many do not want to see this dysfunction solved. But the majority of honest cannabis business owners want to be above table, pay their fair share of taxes, and get on with it.This should all sort out in 2016. When it does, it will be the last battle in the war on prohibition that has, for all practical purposes, already ended.

In February of this year, FinCEN, the Financial Crimes Enforcement Network, issued another memo that effectively resulted in the final surrender of the Federal Government’s prohibition stance. That memo outlined the guidelines that banks must follow if they are to openly take deposits from businesses in this industry. The Feds can create more restrictive rules, but they can’t keep patients from healing themselves, and they probably won’t stop the flow of the more than $2.6 billion in taxable revenue collected this year by legalized states.While the addictive nature of cannabis itself can be debated, nobody can debate the addictive properties of tax revenue to starving governments.

The debate about whether cannabis should be legalized no longer exists. Enough states, enough patients and enough tax revenue have made the point moot. Ideologically, the debate was over years ago when it became clear that the healing properties of cannabis are unmatched by pharmaceuticals. Now, the practical implementation of technology has assured that the debatable issues are nothing more than the Federal government smoking something.

About the Author

Mark Goldfogel is a founder of C4EverSystems, a cash handling kiosk guaranteed to meet banking compliance guidelines for cannabis transactions, and was a co-founder of MJ Freeway, the popular point of sale software for cannabis businesses, guaranteed to meet government compliance regulations for cannabis. He held management positions at ADP and John Deere. You can reach him at [email protected].


Mark Goldfogel

Mark Goldfogel

Mark Goldfogel is an entrepreneur, consultant, writer, and speaker. He is credited with having first proposed “Seed to Sale Tracking” as a means of diversion control, taxation, and health and human safety to the State of Colorado. He co-founded the cannabis industry’s first compliance inventory control system and was a key advisor to The Fourth Corner Credit Union, a financial institution with a banking charter to support the “Hemp and Cannabis Movement.” He has advised States, non-industry companies wishing to enter the industry, and startup companies capitalizing on the opportunities and avoiding the potholes of the budding cannabis industries. For a free copy of his book, Smoking Something, The Cannabis Paradox10, (Amazon $24.20) please send an email to [email protected]

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