By Matt Walstatter

They say all politics is local, but some problems require a federal solution.

For cannabis, the biggest federal issues are banking, taxes and de-scheduling. We can have strong lobbying at the state level and robust outreach to cities and counties — but only the federal government can fix those issues.

That’s why the Oregon Cannabis Association sent 25 members to Washington, D.C. last week for the second time this year. Our members met with Senators, Members of Congress, their staffs, representatives from think tanks, members of the press, and other policy makers, thought leaders, and opinion drivers.

The goal was to raise awareness, garner support, and show the decision-makers that the Cannabis Industry is maturing. We wanted them to understand that we are not a bunch of hippy stoners, but rather a group of intelligent, competent operators seeking to run legal, compliant businesses. By all accounts, the mission was a huge success.

The Issues

Let’s talk for a minute about the three major federal issues that I mentioned earlier: banking, taxes and rescheduling.

Because cannabis remains illegal at the federal level, many banks are reluctant to work with our industry. FinCen, the agency tasked with tracking financial crimes, released guidance last year for banks that choose to serve the Cannabis Industry.

Unfortunately, that guidance was murky at best, leaving banks that want to work with cannabusinesses little legal cover. Congress could easily rectify this situation by passing legislation that protects banks working with compliant, state-legal cannabis firms.

With regard to taxes, the biggest issues come from Internal Revenue Code section 280E. This previously obscure provision states that if a business traffics in a Schedule 1 controlled substance (like cannabis), that business may deduct its cost of goods sold but not any other expenses.

This forces businesses in our industry to pay taxes at punitive rates as high as 80-90 percent. In some cases, the effective tax rate can top 100 percent. Again, a simple act of Congress, either standing alone or as an amendment slipped into a larger bill, could amend 280E so that it no longer applies to state-legal marijuana companies.

Finally, there is de-scheduling. The Controlled Substance Act created a schedule of controlled substances.

Cannabis is currently listed as Schedule 1, which is the most dangerous category. Schedule 1 is reserved for substances with no therapeutic potential, a ridiculous listing for cannabis considering the wealth of information available about its medical value.

Re-scheduling cannabis to a less restrictive category would be a strong incremental step. But the real goal is to have cannabis de-scheduled — removed from the list of controlled substances altogether. This would mark the end of federal prohibition, leaving the states to determine whether to permit the medical or recreational use of cannabis.

The OCA Trip

About 25 members of the Oregon Cannabis Association made the trip to DC. The group consisted of growers, processors, wholesalers, and retailers of cannabis, as well as some folks who run businesses providing ancillary services like security and banking.

They made sure to prepare in advance. The group met before the trip to learn how to lobby effectively in this environment. The OCA leadership provided talking points and trained everyone on how to stay on topic.

The trip was also carefully planned well in advance. By the time the group left, they had been divided into teams. Each team received a schedule of meetings for the trip. Some, like the meeting with Rep. Earl Blumenauer, D-OR, were attended by all groups. For the most part, they took the approach of divide and conquer.

The teams met with several Senators and Representatives. They also met with key staffers of both houses, as well as staff from certain relevant committees. One group met with a representative from the Brookings Institution, a prominent think tank that recently released a report calling for the federal government to allow more research into the therapeutic value of cannabis.

The Oregon Cannabis Association also sponsored a briefing on Capitol Hill for about 30 congressional staffers. OCA members told the group of their difficulties around banking and taxation, putting a human face on the issue.

The Response

By all accounts, the Oregon Cannabis Association group was prepared, professional and effective. When you represent cannabis, expectations can be low, so even a modicum of professionalism can impress. Our group went far above and beyond this low bar.

This was the OCA’s second trip to Washington and we have heard a ton of positive feedback from a number of the people who we met with. In the interval between the two trips, Rep. Blumenauer, along with Sen. Ron Wyden, D-OR, and Sen. Jeff Merkley, D-OR, held a press conference calling for Congress to act to provide our industry with banking.

In that time we have also seen several pieces of legislation introduced in Congress to address the issues of banking and taxation. Bills around rescheduling have also been proposed, although that may take a bit longer to garner support. Rep Blumenauer and others have told us that the OCA trips have made it easier for them to push for these changes.

The Oregon Cannabis Association will continue sending delegations to Washington. The National Cannabis Industry Association also has an annual DC trip where members do similar work. But, this will progress faster if we have more help.

It has to be the right help. We need to send thoroughly prepared industry representatives on carefully planned trips. We need to demonstrate the utmost professionalism and execute effectively.

If you would like to join the next OCA trip, or if you work with an organization that would like to lobby at the federal level, contact me or the Oregon Cannabis Association.

We have come a long way in a short time over the last couple of years. With unity and professionalism we can take further steps to end federal prohibition and free our plant and the people that use it.