During the Regan administration, Nancy Regan announced the “War on Drugs”, but the demand for the product far outweighed the politics. This year could turn out to be a monumental year for marijuana to be on the ballot. More states than ever before will vote on easing the restrictions on the use of marijuana. States are voting on allowing medical marijuana and other states are looking to fully legalize its recreational use.
This may seem like a blast from the past, but investors are seeing dollar signs in a new industry. This situation may hinder more than help the movement as big companies may be looking to cash in. So what about the crime rate as some have argued? What about big business monopolizing the industry? In Colorado, which legalized buying cannabis, the law enforcement and courts are no longer wasting the taxpayers’ money going after people for smoking pot. Actually there has been an 80% drop in charges for marijuana related crimes and a 23% drop in all drug related charges. And arguably the issue for taxes has far outweighed expectations in Colorado with $125 million, yes, million, collected in 2015. This was not just derived from the pot industry but also from the tourists that it brings to the state. With the laws changing this year to allow tourists to purchase as much as a Colorado resident, that tourism industry will continue to grow.
Colorado has adopted a public approach to marijuana by funding local public schools, youth services, and behavioral health programs. Many opponents have a hard time arguing when the money going to help schools, communities and the youth. Additionally, Colorado businesses have earmarked cannabis money for cleaning up highways and communities.
Statistics don’t lie and according to The Free Thought Project out of Colorado; teen cannabis use has declined, deaths related to painkillers has declined, prescription drug use has declined and even violent crimes have significantly decreased.
However, marijuana businesses are finding the financial world not as receptive to their line of work. Many business owners are finding it harder to get lines of credit from local banks. Even checking accounts are hard to come by for fear of retaliation from the federal government. Many banks are reluctant to accept the responsibilities associated with the risk of accepting or housing money from a deity whose business is still illegal under federal law. Another major issue is the tax code that forbids businesses from taking normal business deductions. Will this year’s federal and national elections chance this? That is yet to be seen.
These businesses are facing tough decisions about their finances. The Treasury Department even issued guidelines that go so far as to say that if the banks are involved with a marijuana business, the bank should monitor that customer for “suspicious activity”. So, why are banks not going to bars to monitor the alcohol activity? Banks and financial institutions are not willing to accept the obligations associated with the marijuana businesses.
A credit union in Denver went as far as to try to set up the first financial institution serving exclusively to the cannabis business. However, the obstacles from regulations set up by the government has made it impossible to move ahead. Again, we will have to wait to see if a change in elected officials will transform this awkward situation.
So, all of this leads us to the questions surrounding this election season. According to Fortune magazine, both Hillary Clinton and Donald Trump agree that they are both pro pot, to a certain extent. This has the advocates for medicinal marijuana hoping that eventually a federal bill will legalize medical use in all states. Trump also endorses medical use and goes further to say that the recreational use of cannabis should be determined by each state.
Yes, this election season will be interesting.