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Last Word: When Will We Get That Giddy Feeling About the Cannabis Industry Back Again?

About a year ago, when I was really starting to get familiar with the Cannabis Industry, I was sure that legal marijuana was the next big thing.

It was hard not to think that. You could hardly turn around without bumping into a story, or some media coverage, proclaiming that the marijuana business was “in,” and groups/events like ArcView seemed to legitimize the notion that cannabis was getting sober and respectable.

Yes, the Cheech & Chong days seemed over.

Fast forward 12 months, and the giddy feeling that legal marijuana’s time has finally come has waned somewhat. There aren’t quite as many news stories, or pundits predicting full legalization coming soon, and even the expansion of legal cannabis in places like Oregon, Alaska, and Washington, D.C. hasn’t pushed a second wave of trend coverage proclaiming marijuana as the next big thing.

It feels like something happened, but what was it exactly? What was it that caused everyone to turn down the party music?

I don’t know exactly, but I think it has something to do with banking, or to be more precise, the lack of banking options for the legal marijuana industry.

As great as it that Oregon has gone fully legal with recreational marijuana this month, stories about how the state raked in $11 million in the first week of fully legal sales only make me wonder — how are they doing handling all that cash?

It’s the Achilles Heel of the Great Marijuana Boom, and it’s pretty simple: as long as the federal government refuses to change marijuana’s legal status as a Class I drug, there’s little to no chance that the banking and regulatory arms of the feds will ease up either.

So, marijuana businesses, even in the many places where the state’s have decreed it legal, can’t take advantage of the banking and tax benefits any other legal business enjoys.

A story last week in Willamette Week, a Portland-area alternative weekly, put it plainly: Marijuana Businesses Are Raking in Money — and the IRS Will Take Most of It

It’s a sobering read, and that’s just the tax side. The banking side is an equally big problem, and it is why Bloomberg News published an interview this week with Anthony Rivera, a Native American businessman who believes his organization, CannaNative, can “link tribal leaders from the 566 sovereign American Indian nations with finance professionals and legal-marijuana businesses to use the expertise gained from decades of managing casinos. That way, he said, they can go where big institutions such as JPMorgan Chase & Co. and Wells Fargo & Co. fear to tread — banking the legal-pot industry’s estimated $3 billion in annual revenue.”

Rivera believes that Indian tribes can take the expertise they have built from managing casinos (where they deal with lots of cash) and apply that to the legal marijuana industry. He also thinks that the fact that the tribes are sovereign nations will help in their ability to deal the Federal Government on this matter, nation to nation.

It’s an interesting notion that anyone in the Cannabis Industry should be rooting for, but like so many efforts to open up the banking industry to the legal marijuana trade, it’s a long-shot.

With the New Year rapidly approaching, all of this makes me wonder: what needs to happen to push the Federal Government to finally decide to deal with the growing legal marijuana market?

Will it take a really big state — like California — voting to go fully legal in 2016? Will it take a new president, a big change in the Congress, or something else entirely?

I really don’t know, but what I do know is that the giddy feeling that marijuana was the next big thing has waned, and like all of you, I’m desperately hoping something happens soon to get that feeling back again.




This Post Has One Comment
  1. Mr. Hollon, if the experience of tribe owned payday loan businesses is any indication of future tribe success in cannabis banking, don’t hold your breath. Payday loans are legal in 33 states but that didn’t stop the FED’s from launching “Operation Choke Point.” This campaign literally choked off 80% of tribe lending. Not only did the ACH system shut down for tribe lenders, but bank examiners “threatened” banks with increased examinations and substantial compliance expenses. I suspect the same strategies will be employed by those D.C insiders threatened by a plant and the thought of tribe owned banks facilitating the demise of their clients. You’re right! We in the cannabis space still have a tough road ahead! Note that I’m NOT debating the pros and cons of payday loans but rather the methods employed by the boys in D.C. to achieve their goals. Until serious cash is available to turn the tide – that is a collaboration of funding by ALL the various cannabis organizations in a united campaign – banking for cannabis companies will remain a distant dream.

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