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ECONOMICS

  • by Kevin Mahmalji, NORML Outreach Director September 10, 2018

    As more and more states decide to legalize and regulate marijuana, businesses outside of America’s new billion dollar marijuana industry around the country are doing their best to navigate the murky waters of entering into partnerships with state-sanctioned marijuana businesses.

    Some are responding by adopting new company policies more considerate of state laws that grant marijuana-related businesses the freedom to engage in activities that are still prohibited by the federal government (e.g., sale and distribution of marijuana). On the other hand, some of the largest and most well-known social media platforms such as Facebook and Instagram have decided to steer clear of the issue all together. Instead of evolving like the majority of the American public, where more than 68% support the legalization of adult-use marijuana, they appear to be aggressively suspending social media accounts of marijuana-related businesses while offering little to no explanation as to why.

    Without question, companies, regardless of their products or services, need a strong presence on social media to compete, and ultimately survive in today’s digitized marketplace, but social media accounts of state-sanctioned, legal marijuana businesses are routinely being shut down without warning, and frankly without just cause. This is a devastating blow to companies that have invested time, money and energy into building robust following of tens of thousands of dedicated supporters and potential customers.

    Considering the restrictions against marijuana-related activities outlined in the “Terms of Use” and/or “User Agreement” adopted by most popular social media platforms are based on the fact that marijuana is federally illegal and categorized as a Schedule 1 Controlled Substance, the problems companies like Natural Remedies and Dixie Elixirs are currently experiencing can only be solved by Congress.

    That’s why I believe the focus should be on ending the federal prohibition of marijuana by encouraging members of Congress to pass HR 1227: The Ending Federal Marijuana Prohibition Act, S.3174: The Marijuana Freedom and Opportunity Act, or S.1689/HR 4815 The Marijuana Justice Act. Not only would marijuana-related companies be able to promote their events and market products on Instagram, Facebook and other social media platforms, it will end the harassment, arrest, and incarceration of marijuana patients and consumers, not to mention all of the collateral consequences related to a marijuana charge (e.g. employment and housing discrimination).

    I’m in no way trying to minimize the challenges with censorship that business owners operating in the marijuana industry are facing, but merely trying to redirect focus to the root of the problem. Currently there are numerous business-centric marijuana law reform bills being considered by Congress, and while NORML’s focus continues to be on ending marijuana prohibition and being a voice for marijuana consumers, we are generally supportive of these efforts.

    We at NORML understand and appreciate how marijuana consumers benefit when a company has access to basic banking services such as checking accounts, small business loans and merchant services. We understand that without a stable and predictable environment where businesses can thrive, consumers will be the ones to suffer at the end of the day.

    I’ve highlighted a few business-centric marijuana law reform bills that NORML has created action alerts for below:

    The Secure and Fair Enforcement Banking Act: http://norml.org/action-center/item/support-the-secure-and-fair-enforcement-banking-act-safe-banking-act

    The Small Business Tax Equity Act: http://norml.org/action-center/item/federal-legislation-pending-to-cease-penalizing-state-compliant-marijuana-businesses-under-the-federal-tax-code

    The States’ Medical Marijuana Property Rights Protection Act: http://norml.org/action-center/item/federal-legislation-pending-to-halt-forfeiture-actions-against-marijuana-facilities

    The State Marijuana And Regulatory Tolerance Enforcement Act: http://norml.org/action-center/item/federal-support-the-state-marijuana-and-regulatory-tolerance-smart-enforcement-act

    For a comprehensive list please visit NORML’s Action Center.

    As a nonprofit organization that’s focused on the larger goal of ending federal marijuana prohibition, we also promote business-centric marijuana law reforms to our members and supporters. If your business would like to support our efforts, please consider becoming a sponsor today!

    “Businesses can do well by doing good, when they join the fight to end prohibition,” says NORML’s development director, Jenn Michelle Pedini. “NORML’s grassroots includes tens of thousands of reform-savvy consumers, and businesses gain exclusive access to that network when they stand alongside them and fight for freedom.”

    Whether you’re a longtime business owner or new to the marijuana industry, we’ll recognize your company on our website and social media for supporting NORML’s longstanding mission of reforming marijuana laws in our country.

    For more information about becoming a NORML Sponsor click here!

  • by Paul Armentano, NORML Deputy Director July 20, 2018

    A fiscal report issued by the state’s Auditor General estimates that taxing Pennsylvania’s existing retail cannabis market would yield $581 million in new annual revenue.

    The report estimates that just under 800,000 Pennsylvanians are currently using cannabis. Statewide polling finds that a majority of voters endorse legalizing and regulating its use by adults.

    “The benefits of regulating and taxing marijuana are undeniable,” the report concludes. “As its neighbors weigh the issue, Pennsylvania must act to create its own marijuana market. Otherwise, it runs the risk of losing the revenue from potential customers to other states. It is time for Pennsylvania to stop imagining the benefits of marijuana and realize them.”

    Pennsylvania’s Auditor General Eugene DePasquale has previously spoken in support of statewide legalization. Governor Tom Wolfe has expressed support for decriminalizing marijuana possession offenses, but has been reluctant to endorse legalizing the marijuana market.

    Full text of the report, “Regulating & Taxing Marijuana: A Special Report on the Potential Revenue & Financial Benefits for Pennsylvania,” appears online here.

  • by Justin Strekal, NORML Political Director June 14, 2018

    The House Appropriations Committee took up and defeated language known as the Safe Banking Amendment offered by Congressman Dave Joyce (R-OH) on Wednesday, June 13th.

    If adopted, regulators would not be authorized to use federal funds to threaten sanctions against banks working with marijuana-related businesses and entrepreneurs.

    The defeat of the Safe Banking Amendment was not a vote about marijuana, but rather it was about normalizing a nascent industry that serves hundreds-of-thousands of customers in the majority of US states where cannabis is currently regulated. Once these companies have an easier time conducting their day-to-day operations, then they should be willing to offer more consumer-friendly prices instead of inflating them at the point of sale to cover backend costs associated with operating as an all-cash business.

    Currently, hundreds of state-legal, licensed, and regulated businesses do not have access to the banking industry and are unable to accept credit cards, deposit revenues, or write checks to meet payroll or pay taxes. This situation is untenable. No industry can operate safely, transparently, or effectively without access to banks or other financial institutions. Congress must move to change federal policy so that these growing number of state-compliant businesses, and their consumers, may operate in a manner that is similar to other legal commercial entities.

    As an appropriations amendment, this funding restriction would have only been in place for one year.

    There is pending bicameral legislation introduced by Representative Perlmutter (D-CO) and Senator Jeff Merkley that the banking amendment was based, known similarly as the SAFE Banking Act. You can click here to send a message to your lawmakers in support of that legislation. 

  • by Madisen Saglibene, Executive Director of Las Vegas NORML February 8, 2018

    For decades, Las Vegas has been a place known to play fast and loose – and this is even becoming evident in our emerging Marijuana Industry. On January 16, 2018, hundreds of citizens, business owners, and marijuana consumers met to provide public comment on the proposed set of permanent regulations issued by the Nevada Department of Taxation at a public hearing. Taxation in Nevada certifies, audits, coordinates and educates hundreds of state-certified marijuana establishments such as dispensaries, cultivation facilities, production facilities and independent testing laboratories. In 2016, over 600,000 Nevadan’s voted to legalize marijuana, giving the Department of Taxation the authority to regulate the operation of Marijuana Establishments, award and limit licensing, and carry-out other provisions of ballot measure 2. However, due to lack of transparency in the scoring process outlined in the proposed regulations for how these licenses are awarded, dozens went on the record to speak out to the Commision in opposition.

    There were many areas of concern, but because there is little clarity on how the applications for licenses are granted, it would appear there is instead, favors being given to Insiders. Multiple licenses of varying types are being awarded to the same small group of millionaires, allowing for extremely monopolistic practices. When an entity is able to cultivate, produce and dispense all of their own product, there is little incentive to vertically integrate other brands. Cultivators of great brands without a dispensing license are unable to sell their own product, leaving the success of their business in the hands of Dispensaries. In addition, license holders are able to resell licenses, and due to a cap on how many will be issued, the current value of a license is approximately $10 million. This bears significance on who is able to establish themselves in this surfacing industry and is shutting potential small businesses and minorities out. This over-burdened cost to obtain a license dramatically impacts the price tag on products available in the marketplace. Including the marijuana tax, ? of cannabis in Las Vegas is on average $65! Patients and locals have not only been faced with extreme costs but competition with tourists, resulting in limited availability.

    After nearly 3 hours of public comment, the Taxation Commision still made a motion to move forward with the proposal after ZERO deliberation. Because it’s not too late, we are asking Nevadans to urge the Legislation to insist the Department of Taxation extend their deadline of March 1st in order to revisit the verbiage, paying close attention to what the Department can and cannot do according to Question 2. With other States looking at Nevada as a model for a successful program, it is vital the regulations be revisited to ensure fairness and inclusion instead of monopolies and reverting back to old Las Vegas ways.

    Frank Sinatra once said, “Las Vegas is the only place I know where money really talks–it says, “Goodbye,”.”

    Madisen Saglibene is the Executive Director of Las Vegas NORML. 

    Visit their website at http://lvnorml.org/ and follow them on Facebook and Twitter.

  • by Aubrie Odell, Former NORML Junior Associate November 5, 2017

    In March of this year, Oakland City Council implemented the Equity Permit Program for aspiring marijuana entrepreneurs in the new green economy. This program is designed to address the past disparities in the cannabis industry by giving priority to the victims of the war on drugs and minimizing barriers to entry into the industry; ultimately trying to level the playing field within the medical cannabis arena. The Oakland City Council found that the Black community has been dramatically overrepresented in cannabis-related arrests in the past 20 years, accounting for 90% of these arrests at times.

    The city is including an incentive for non-equity applicants by fast-tracking permits from property owners who offer free rent to equity applicants as a way to assist the entrepreneurs who have had little access to capital. Additionally, tax revenue collected from this new licensing process will be used to establish an assistance program for equity applicants, offering no-interest startup loans, exemption from the permit application fee, and technical assistance.

    To qualify as an applicant and receive this assistance, the individual must be an Oakland resident with an annual income that’s less than 80 percent of the Oakland Average Medium Income and either has a past marijuana conviction in Oakland or has lived for ten of the last twenty years in police beats that experienced a disproportionately higher amount of law enforcement.

    Although the program may not perfect, Oakland is setting an example of how to begin to address marijuana-related oppression that has impacted historically marginalized groups. Other states that have legalized marijuana, or are in the process of doing so, should look to the Oakland model because legalization alone will not address the historic injustices perpetrated by law enforcement under prohibition.

    However, as states both decriminalize and legalize the recreational use of marijuana, researchers still find enormous racial disparities within arrest rates. From a 2013 ACLU report, researchers found that although marijuana use rates are almost equal among Black and White individuals, Black people are 3.73 times more likely to be arrested for marijuana possession compared to their White neighbors. Even with decriminalization, most states still have outrageous fines in lieu of jail time—$5 worth of marijuana can result in a $150 fine in Ohio. For most people, that is a large portion of their paycheck that would otherwise go towards rent, food, and other basic necessities. And, most importantly, the same racial disparities within arrest rates of marijuana possession are likely replicated in civil offenses for marijuana possession. Even with decriminalization, police are still going to be targeting Black people at the same rate. In Washington, DC last year, arrests for public use of marijuana nearly tripled just one year after marijuana use (but not marijuana sales) became legal in the city. Many of these arrests directly impact poor people and minorities, especially because it’s only legal to consume marijuana on privately owned property. Individuals who rent or are in public housing cannot enjoy private consumption.

    So, even when more states begin to legalize marijuana, Black individuals are still going to be less likely to be able to thrive in the regulated marijuana market because of the copious amount of fines, prison time, and harassment from law enforcement. Not to mention, even when fines are replaced for minor marijuana possession instead of jail time, those that are unable to pay the fine may be arrested or forced to appear in court–raking in additional fines to pay. However, not even programs similar to Oakland’s are enough to resolve these discrepancies. A number of states have laws that don’t allow those with past convictions to apply to open a marijuana business, which disproportionately discriminates against minorities that have been targeted for marijuana possession offenses prior to legalization. To rid of this disparity, states with legalization laws should be issuing automatic expungements of prior marijuana-related arrests.

    The enforcement of marijuana prohibition has gone out of its way to marginalize the Black community, so it’s only right that each state work just as hard to remedy this problem. A great place to start is with a program that allocates a certain amount of funds, resources, and applications for minorities who want to start a marijuana business, in states that have legalization laws. Without these programs and without recognizing these injustices, racial disparities will continue and Black people will not be given a fair opportunity to thrive in a regulated marijuana market.

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