What’s the biggest day-to-day challenge facing medical marijuana dispensaries?
For most owners, it’s getting by without a bank account, which means operating as an all-cash business – and dealing with all of the headaches that entails.
Last week, two Democratic federal lawmakers introduced a bill in Washington DC that would solve that problem. Under the Marijuana Business Access to Banking Act of 2013 (or HR 2652), federal regulators would not be able to prohibit or dissuade banks, credit unions and other financial institutions from lending money to or taking deposits from state-legal medical cannabis companies. The measure now has the support of 18 other lawmakers, including two Republicans, and has been referred to a committee.
The banking bill is just one of numerous medical marijuana measures that have been introduced in Washington this year. Others include:
- Respect State Marijuana Laws (HR 1523): Would prevent the federal government from prosecuting medical marijuana businesses/providers that are in compliance with state cannabis laws.
- Small Business Tax Equity Act of 2013 (HR 2240): Would allow medical marijuana dispensaries and related operations to take common business deductions when filing their taxes by essentially barring the IRS from using provision 280E of the US tax code to hinder cannabis companies.
- Ending Federal Marijuana Prohibition Act (HR 499): Would remove marijuana from the Controlled Substances Act and effectively let states decide whether to legalize cannabis for medical or recreational use. Also would have the federal government regulate cannabis like alcohol, requiring cultivation operations to obtain a permit.
- Marijuana Tax Equity Act of 2013 (HR 501): Calls for a federal excise tax on marijuana sales, which would help legitimize the cannabis industry.
- States Medical Marijuana Patient Protection Act (HR 689): Would reschedule marijuana under the Controlled Substance Act and ensure that the federal government could not prevent patients and businesses in states with medical cannabis laws from consuming, recommending, producing and/or distributing cannabis if they are in compliance with local laws.
- Truth in Trials Act (HR 710): Offers an affirmative defense for medical marijuana providers and patients, allowing them to introduce evidence in federal court showing that they followed state law.
- States’ Medical Marijuana Property Rights Protection Act (HR 6335): Would bar the Department of Justice from initiating civil asset forfeiture proceedings against property owners of state-sanctioned medical marijuana treatment centers.
An impressive number of bills, to be sure.
But some long-time MMJ business owners have expressed skepticism and tempered their expectations, saying that the same cycle plays out each year: a series of MMJ measures are introduced to much hype, only to die quietly – often without a hearing – in the months after.
Some experts involved in the lobbying process, however, say this time could be different, adding that at the very least the introduction of such bills sheds light on the plight of the industry and gets lawmakers talking about the issues.
“While it is true that cannabis-related bill have been introduced in the past and not progressed beyond introduction and garnering co-sponsors, things have truly changed in Washington,” said Steve Fox, chief lobbyist for the National Cannabis Industry Association, a trade for medical cannabis businesses. “With regard to both the banking issue and Section 280E…we are making significant progress. Members of Congress and their staff are taking the issues seriously and recognize that they need to be fixed. The introduction of these bills is part of a process that leads to reform.”
Also last week, Medical Marijuana Business Daily provided an overview of cannabis stock performance in the second quarter. Nearly every public cannabis companies saw its share price drop in the second quarter, which followed an equally unimpressive first quarter. For the year, most cannabis stocks are down, some by as much as 40%.
At this point, investors are skeptical of these companies’ business models, though they remain optimistic about the industry as a whole.