Week in Review: Bank Axes CO Service, Contentious Biz Plan in Alaska & Concerns Over Potential AG

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By John Schroyer

An Oregon-based bank retreats from the Colorado marijuana market, an entrepreneur reveals plans to open an unlicensed dispensary in Alaska, and the nominee for U.S. attorney general comes out against cannabis.

Here’s a closer look at several notable developments in the cannabis industry over the past week.

Banking Bummer

Many marijuana business owners were disappointed this week when Oregon-based MBank decided to pull out of Colorado – just days after announcing its intention to enter the market.

Some observers speculate that the federal government was behind the move.

“This screams ‘federal regulator calls MBank and says we’re going to cut this off if you don’t stop what you’re doing,’” said Jason Katz, a partner at Denver-based LoPro Consulting.

“When I hear that they all of a sudden don’t have the infrastructure, seven days after they decided that this is the way they were going to do business, something had to change at the top,” Katz added. “Something significant that probably is related to politics and the federal government in some capacity. That would be my guess.”

The news even spurred U.S. Rep. Earl Blumenauer, D-OR, to send a letter to the FDIC requesting clarification on whether federal regulators interfered with MBank’s plans.

“If this is true, it raises serious questions about the application of federal oversight,” Blumenauer wrote to FDIC Chairman Martin Gruenberg, who also said he’s troubled by allegations that the FDIC “appears to be governing by informal fiat.”

Many companies are trying to solve the banking problem, but the issue likely won’t be resolved unless there’s a policy change in Washington DC.

“Until there’s a real change – rescheduling (of marijuana) or change of banking policy at the federal level – none of this is going to surprise me. I actually think it’s going to continue to be the standard,” Katz said.

‘Pretty Stupid’ Move in Alaska?

Reporter-turned-cannabis-entrepreneur Charlo Greene is still good at making headlines, both in her home state of Alaska and beyond.

She first came to prominence last September, when she sensationally quit her television reporting job during a live broadcast to support Alaskan legalization efforts. Now, she’s turning heads with her newest venture.

Greene essentially announced plans to open a psuedo-dispensary in downtown Anchorage on Feb. 24, the day possession and consumption become fully legal in the state. The club will operate as a nonprofit, and allow members to make a “donation” for MMJ edibles and cannabis.

She’ll also allow recreational cannabis users to essentially exchange marijuana with each other.

Some industry insiders say that Greene’s not only facing legal risks herself, but that she’s also unnecessarily creating bad will with regulators who could have oversight of her business in the future.

“In my opinion, it’s pretty stupid,” said Zeta Ceti, owner of Green Rush Consulting in Oakland, California. “It’s going to put her name in jeopardy, her business in jeopardy, and even possibly her business application in jeopardy.”

Even though Alaskans voted last November to legalize recreational marijuana, state and local officials are still in the process of setting up regulations for cannabis stores. On top of that, MMJ dispensaries are still illegal.

Greene thinks she’s found a legal way around that, telling the Alaska Dispatch News that she’s sure she’s on solid legal footing. Even so, observers say she should either wait for regulations to be established or start up an alternative business.

“We saw people pre-licensure open their doors, often against legal advice, and they got prosecuted,” said Amy Margolis, an attorney in Portland, Oregon. “It’s never a good thing to make yourself a target.”

Nominee Not Ideal

When attorney general nominee Loretta Lynch told a U.S. Senate panel this week that she opposed the legalization of marijuana, cannabusiness owners started squirming.

If Lynch is confirmed, it will create a host of questions about federal marijuana policy.

Will the government look to crack down on the marijuana industry again or start meddling with states that have legalized some form of cannabis? Will Lynch stifle recent progress at the federal level on marijuana-related issues? Will her appointment dash hopes that the government will reschedule marijuana anytime soon?

There’s little clarity on these questions at this point.

Outgoing Attorney General Eric Holder, though not an outright fan of the industry, has backed off the cannabis business in recent years. He stood aside when Washington State and Colorado decided to go ahead with recreational marijuana, and didn’t pick a legal fight with the states even though he could have.

He also tried to make it easier for banks to work with companies that cultivate and sell cannabis.

If Lynch is confirmed and decides to take a firm stance against cannabis, she could definitely make life more difficult for those in the industry. Or she could simply be playing politics right now to make sure she’s confirmed by the Senate, and then continue Holder’s more moderate approach once she assumes office.

Of course, Congress recently forbid the DOJ from using federal funds to interfere with states setting up marijuana laws. That law may herald an end to federal intervention regardless of who takes the attorney general post. On the other hand, it might just be a simple legislative hurdle that a hard-line anti-marijuana attorney general could sidestep.

At the very least, Lynch’s nomination shows that the industry isn’t out of the woods yet by any means. As one New York Times writer blogged, “Lynch’s statements serve as a reminder that the Obama administration’s policy on marijuana could easily be reversed.”

John Schroyer can be reached at johns@mjbizmedia.com