By Bart Schaneman and Omar Sacirbey
A Nevada regulator threatens crackdowns on marijuana promotions, a bank in Florida is openly working with MMJ businesses, and U.S. Attorney General Jeff Sessions writes letters to governors of three recreational cannabis states.
Here’s a closer look at some notable developments in the marijuana industry over the past week.
Not so smoker friendly
Nevada cannabis entrepreneurs are trying creative ways to increase business.
But promoting private consumption and marijuana-themed events is a good way to lose your license, says one industry watcher.
The Department of Business Licenses in Clark County, where Las Vegas is located, has told local marijuana companies that promoting public use of cannabis or getting involved with non-licensed MJ businesses could result in the suspension or loss of licenses.
Regulators are watching.
In June, Las Vegas-based Digipath Labs sent an email promoting a third-party event that paired food and marijuana.
The event was canceled, but the company was brought before the county zoning board. Digipath avoided punishment by donating $50,000 to a medical study on substance abuse.
“While public consumption and consumption lounges would be good for the industry in Nevada, they’re currently not available,” Gidvani said. “So these license holders that want to increase business by promoting private events need to be very careful.”
Gidvani estimates the state is at least two years from enacting any public consumption laws because Nevada’s legislature doesn’t meet until 2019.
But the tourism industry will force the issue, he said.
“Public consumption lounges are coming,” he said. “They’re absolutely necessary in Nevada given our tourist industry and tourist population.
“People coming to Nevada have to have a place to smoke.”
A new day for banking?
Word that First Green Bank in Florida is accepting cash deposits from and issuing loans to medical marijuana businesses was heralded by industry observers as more evidence that financial institutions can serve the cannabis industry without fear of federal interference as long as they comply with a 2014 Department of Justice memo.
But the memo’s co-author, John Vardaman, acknowledged that while banks should feel safe working with marijuana businesses, many don’t – and the federal government could take steps ease their concerns.
Vardaman – a former Treasury Department and Justice Department official during the Obama administration – relayed that message to members of a DOJ task force he met with a couple of weeks ago.
What steps did he recommend to his former colleagues?
“If banks had some level of assurance … the existing guidance was here to stay and that there was going to be some additional guidance – so they knew what to do and how to stay on the right side of federal policy – then a lot more banks would be comfortable about serving the industry,” said Vardaman, now executive vice president and general consul for Hypur, an Arizona-based payment and banking technology company.
“Right now, there’s just a lot of uncertainty about the fate of the existing guidance and how to apply it.”
Vardaman said financial institutions would benefit if federal guidelines were reworked to better clarify what qualifies as a marijuana business. For example, is a marijuana business exclusively a plant-touching company or, perhaps, businesses that profit from plant-touching entities, such as greenhouse firms.
What should cannabis professionals take away from U.S. Attorney General Jeff Sessions’ letters to governors of three adult-use states in which he questioned the effectiveness of their marijuana regulations in complying with the 2013 Cole Memo?
“I think it’s a lot of posturing,” said Kayvan Khalatbari, a Denver-based consultant with over a decade of experience in the MJ industry. “The Department of Justice doesn’t have the funding that they need to appropriately go after this industry.”
Sessions used similar wording in the letters, which challenged the strength of rec cannabis regulations in Colorado, Washington state and Oregon.
But the AG’s letter to Oregon Gov. Kate Brown went farther, alleging that her state’s legal marijuana industry hasn’t slowed the black market.
The vocally anti-cannabis Sessions‘ bluster shouldn’t concern the marijuana industry, Khalatbari said.
“I know that this is a new administration and Sessions is a new man,” he added. “But there’s never been a raid on a state-compliant cannabis business in the history of this country, and I think that’s an important step that we all need to remember.”
Khalatbari pointed out that not only would amassing the required funds for shutting down the industry be expensive, it would be unpopular.
“I just can’t see members of Congress putting money back on the table to go after (the cannabis industry) when many Republicans and Democrats are worried about getting reelected next year,” he added.
He also questioned Sessions’ assertion that Oregon’s black market continues to grow.
Maybe it’s a warning shot that Oregon’s MJ industry needs to do things differently, Khalatbari said, “but again, where’s the evidence that this is really the case?”
Bart Schaneman can be reached at email@example.com
Omar Sacirbey can be reached at firstname.lastname@example.org