By John Schroyer and Omar Sacirbey
The Federal Reserve gives marijuana businesses the cold shoulder, Chicago signals that it is embracing medical cannabis, and political unity emerges behind a legalization push in Maine.
Here’s a closer look at several notable developments in the marijuana industry over the past week.
Banking institutions that work with cannabis companies likely sat up and took note late last week when the Federal Reserve indicated in a legal filing that it won’t accept one penny from marijuana businesses.
That seems to conflict with banking guidance released by the government early last year. And it isn’t exactly how the Federal Reserve has approached the situation to date, said Paula Givens, a principal at Colorado-based Industry Assurance and Oversight.
“The Federal Reserve accepts cannabis funds every single day,” Givens said. “So to me, it’s a little disingenuous for them…to take a position in a lawsuit that’s contrary to what they’re doing every single day.”
The Federal Reserve’s stance is spelled out in a court motion to dismiss a lawsuit filed against it by the Fourth Corner Credit Union, which was denied a charter to offer banking services to cannabis companies.
The motion was likely written by a government lawyer who was simply trying to use a litigation tactic to get the case against dismissed, which isn’t the same thing as formal agency policy, Givens said.
“If that were truly, truly the stance of the Federal Reserve, there would not be a single cannabis business that would have a bank account,” Givens said.
Of course, plenty of cannabis businesses do have bank accounts, although most financial institutions knowingly working with the marijuana industry don’t exactly publicize it.
That being said, the court filing could have ramifications for marijuana companies because banking executives do pay attention to any little indication of a shift in the wind from the Fed.
Banks that may have been thinking about getting into the cannabis space may decide to hold off, or simply change their minds outright.
Open arms in Chicago
There are signs all over the country that marijuana is gaining mainstream acceptance – and that’s especially true in Chicago, home to a few cannabis companies that have been rubbing elbows with the everyday business world.
This week, 1871 – a nonprofit business incubator that has launched about 130 companies – brought a cannabis-focused social network under its wing. According to 1871 spokeswoman Melissa Wooten, the three-year-old incubator helps a “few other” cannabis businesses as well.
Earlier this month, the Bank of America Chicago Marathon accepted a sponsorship from Cresco Labs, an Illinois cannabis cultivation company.
And last year, the medical marijuana clinic Good Intentions sponsored the McDonald’s Thanksgiving Parade in Chicago. That unfolded after Philip Purevich – executive director of the Chicago Festival Association, which produces the parade – saw the company’s billboard while driving and decided to see if Good Intentions was interested in sponsoring.
The company accepted.
There are no cannabis companies sponsoring this year’s Thanksgiving parade. But that’s not for a lack of trying, said Purevich, who called and invited Good Intentions and two other cannabis groups to sponsor, without success.
The parade’s sponsorship deadline is Nov. 13, and Purevich is hopeful that companies from the cannabis sector will sign on.
Why does Chicago seem to be embracing the MMJ industry?
“I think Chicago is a fairly liberal place,” said Purevich. “It’s not ‘anything goes.’ But there hasn’t been any social uproar over this.”
One for all, all for one?
The competition is over in Maine between two pro-cannabis camps that were spearheading separate legalization measures.
Legalize Maine and Marijuana Policy Project formally joined forces as of Monday, meaning that the chances Maine will legalize recreational cannabis next year are much better.
Not only will the groups maximize their signature-gathering and vote-getting efforts by combining their resources, but they also won’t be slinging political mud at each other (which likely would have done both camps a disservice).
“On the whole, it’s a great thing. The last thing we want in any of these states is competing initiatives,” said Kris Krane, a national cannabis consultant with 4Front Advisors.
The regulatory differences between the two initiatives were arguably minimal, and Krane said he sensed the previous division was “more personality-driven than policy-driven.”
But just because Maine activists were able to reconcile their differences for the betterment of the larger movement doesn’t mean the same will happen in other states where there are competing campaigns.
Krane says it’s highly unlikely that Bay State Repeal in Massachusetts will come around and support a competing legalization initiative there by the Marijuana Policy Project.
Some feel it’s highly unlikely that competing legalization groups in California will team up either. Word has it that there’s a good bit of acrimony between Reform CA, which has already filed ballot language with the state, and billionaire Sean Parker’s camp, which is still working on initiative language.
If history is any indication, the likely result in each state is that only one measure will actually make the ballot, and the other campaign will then grudgingly back that measure.
It’s just a question of when.
John Schroyer can be reached at [email protected]
Omar Sacirbey can be reached at [email protected]