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Banking for Cannabis Growers – Canna Law Blog™

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If you own a cannabis business, a major consideration is where to keep your money. Though many business owners may find banking to be a headache regardless of industry, few business owners have more hurdles to deal with than cannabis growers and dispensaries. The current state of cannabis banking can have a significant impact on where cannabis business owners keep their money and whether they obtain cannabis loans.

With the curious legal status of cannabis at the federal and state level, cannabis banking can be complex. This is where a trusted cannabis lawyer at Harris Sliwoski can help.

Current State of Cannabis Banking

Currently, many states have legalized cannabis for medical use and some have legalized it for recreational use, but cannabis remains illegal at the federal level. Since the legality of cannabis varies at the state and federal levels, this has led to a lot of uncertainty in cannabis banking. While the industry is thriving because cannabis can be sold legally in various states, some financial institutions — including big banks — are hesitant to approve cannabis-related business accounts due to the federally illegal status of cannabis.

Financial institutions are concerned about facing repercussions from the federal government, which has forced many cannabis businesses into a cash-based economy. Without the ability to easily obtain reliable banking services while dealing with piles of cash, many cannabis businesses face increased security risks. When a business deals only in cash, it tends to be at a greater risk of robbery. This situation has elevated so much, in fact, that many dispensaries are hiring security guards and armored trucks to protect their money, and some have installed high-tech glass and security systems.

Cash businesses like those in the cannabis industry are also more often exploited for nefarious purposes like money laundering. Making tax payments can also be more challenging in a cash-only system. While it’s possible to pay taxes in cash, it’s less convenient. Fortunately, a burgeoning reform effort is gradually addressing the prohibition of cannabis at the federal level.

The SAFE Banking Act, for example, aims to prevent federal institutions from being penalized by federal banking regulators for associating with legitimate cannabis-related businesses. However, this act has failed to pass through Congress after several attempts, and under the current legal landscape, many banks and credit unions are continuing to stay away from cannabis-related businesses. Hemp, a similar product to cannabis, and hemp-derived consumer products that contain cannabidiol (CBD) are legal at the federal level, which could mean good things for cannabis, though there are still some legal restrictions on CBD products.

Hemp seeds and cbd oil with an informative text on the legality of hemp-derived products.

Tips on Banking for Cannabis Companies

Though there are no guarantees that you’ll be able to open a bank account for your cannabis business, you may be able to improve your odds of approval using the tips below:

  • Be honest: Be honest and transparent about your cannabis business. Misleading a financial institution can lead to account closure and even present a risk of fraud. A bank will perform due diligence, so we recommend disclosing your important information upfront. A past bankruptcy, for example, may affect the risk you present to the lender for loans. However, certain institutions may still allow you to open a bank account.
  • Consider fees: High-risk bank accounts tend to come with fees like monthly account maintenance, online banking, payroll and wires.
  • Review the fine print: Before you open an account with a bank, you should review the fine print so you know the capacity and limits relevant to your cannabis business account.
  • Gather documentation: Collect all of the documentation you’ll need, such as your permits, licenses, inventory logs, property deeds, sales records and Employer Identification Number (EIN). A financial institution will want to know the amount of money that may flow into the account, and they will want to review the source of your funds to avoid risking federal prosecution.
  • Maintain solid recordkeeping: Your recordkeeping needs to be precise and accurate. Track your inventory from the moment you place the order to the moment you sell the product. An added benefit of maintaining solid recordkeeping is that you’ll keep your business running smoother and identify any increases or drops in demand.
  • Brand your business carefully: Brand your business carefully, as your branding and your general reputation can affect your odds of opening a bank account. For example, avoid making direct references to cannabis in your business name, as this can grab a federal regulator’s attention. Make sure your website and social media accounts also demonstrate that your business is reputable.
  • Comply with state regulations: To operate legally, review and comply with state regulations, as the state is the entity that considers your cannabis business legal. In some states, your financial institution may request an on-site visit before approving your new bank account. Ensure you are maintaining state compliance to increase your chances of approval.
  • Establish a paper trail for funding: Every business needs initial funding to pay for equipment, staff and property. You should establish a paper trail that shows where the money came from, such as whether it was crowdfunded or borrowed from a particular person or source. If you make large deposits, you should also be able to show where these funds came from, such as in-store or online sales.
  • Find an experienced cannabis lawyer: A lawyer experienced in the cannabis industry can provide you with the guidance and legal support you need.

Legal support for the cannabis industry: gavel, magnifying glass, and cannabis leaf symbolize specialized legal services.

Banks That Accept Cannabis Businesses

While many larger banks are avoiding cannabis businesses, small banks are entering the space. The number of state-chartered banks and credit unions that have been venturing into the industry is rapidly increasing, creating more competition for cannabis businesses seeking bank accounts. These banks know that cannabis businesses have an attractive financial profile, and many owners of these businesses are high-net-worth individuals and entrepreneurs who have been successful in other areas.

Though some small banks are not advertising their participation, the recent growth may indicate that stigmas surrounding cannabis business may be starting to fade. We recommend looking for a bank or credit union that has experience in dealing with high-risk businesses.

Two professionals shaking hands in an office with legal scales and a gavel, symbolizing legal services for cannabis businesses.

When to Reach Out for Legal Advice

At Harris Sliwoski, we offer specialized legal help to businesses like yours. Our services for cannabis businesses include legal planning, corporate guidance, compliance strategies and regulatory support. We’ve been assisting cannabis businesses in navigating rapidly evolving policies and regulations since 2010. Depending on your needs, we can also help with:

We take on big international commercial litigation matters on a mixed fee basis — part hourly, part contingency. Contact us at Harris Sliwoski to learn more about cannabis banking.



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Latest Trump Weed Rumor – Trump Will Federally Deschedule and Decriminalize Cannabis, but Not Legalize It

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trump on marijuana reform

In a recent interview, former New Jersey Governor Chris Christie made headlines by asserting that President-elect Donald Trump will pursue significant reforms in federal policies regarding marijuana and cryptocurrency. As the nation grapples with evolving attitudes toward cannabis and the burgeoning digital currency market, Christie’s predictions have ignited discussions about the potential implications of such changes on both industries. This article delves into Christie’s insights, the current state of marijuana and cryptocurrency regulations, and the broader implications of these anticipated reforms.

 

The Current Landscape of Marijuana Legislation

 

Federal vs. State Laws

Marijuana remains classified as a Schedule I substance under the Controlled Substances Act (CSA), which places it in the same category as heroin and LSD. This classification has created a complex legal landscape where states have moved to legalize cannabis for medical and recreational use, while federal law continues to impose strict prohibitions. As of now, over 30 states have legalized marijuana in some form, leading to a burgeoning industry that generates billions in revenue.

 

Challenges Faced by the Cannabis Industry

 

Despite its legality in many states, the cannabis industry faces significant hurdles due to federal restrictions. These challenges include:

  • Banking Access: Many banks are hesitant to work with cannabis businesses due to fear of federal repercussions, forcing these businesses to operate largely in cash.

  • Taxation Issues: The IRS enforces Section 280E of the tax code, which prohibits businesses engaged in illegal activities from deducting normal business expenses, leading to disproportionately high tax burdens for cannabis companies.

  • Interstate Commerce: The lack of federal legalization prevents cannabis businesses from operating across state lines, limiting their growth potential.

 

Chris Christie’s Perspective on Marijuana Reform

 

Christie, a former presidential candidate known for his tough stance on drugs during his tenure as governor, has evolved his views on marijuana over the years. In his recent statements, he emphasized that Trump is likely to pursue descheduling cannabis, which would remove it from the Schedule I classification. This move would not only provide clarity for businesses operating in legal markets but also open avenues for banking and investment.

 

Christie highlighted that descheduling would allow for a more regulated market where safety standards could be established, thus protecting consumers. He believes that this approach aligns with a growing consensus among Americans who support legalization and recognize the potential benefits of cannabis use for both medical and recreational purposes.

 

The Future of Cryptocurrency Regulation = The Rise of Cryptocurrencies

 

Cryptocurrencies have surged in popularity over the past decade, with Bitcoin leading the charge as the first decentralized digital currency. The market has expanded to include thousands of alternative coins (altcoins), each with unique features and use cases. As cryptocurrencies gain traction among investors and consumers alike, regulatory scrutiny has intensified.

 

Current Regulatory Challenges

 

The cryptocurrency market faces several regulatory challenges that hinder its growth and adoption:

 

  • Lack of Clarity: Regulatory frameworks vary significantly across states and countries, creating confusion for investors and businesses.

  • Fraud and Scams: The rapid growth of cryptocurrencies has led to an increase in fraudulent schemes targeting unsuspecting investors.

  • Consumer Protection: Without clear regulations, consumers are often left vulnerable to risks associated with volatile markets.

 

Christie’s Vision for Crypto Regulation

 

Christie believes that under Trump’s leadership, there will be an effort to find a “sweet spot” for cryptocurrency regulation balancing innovation with consumer protection. He argues that overly stringent regulations could stifle growth in this emerging sector while too little oversight could expose consumers to significant risks.

 

In his view, a balanced regulatory framework would include:

 

1. Clear Definitions: Establishing clear definitions for different types of cryptocurrencies and tokens to differentiate between securities and utility tokens.

2. Consumer Protections: Implementing measures to protect investors from fraud while promoting transparency within the market.

3. Encouraging Innovation: Creating an environment conducive to innovation by allowing startups to thrive without excessive regulatory burdens.

 

Christie’s insights reflect a growing recognition among policymakers that cryptocurrencies are here to stay and that appropriate regulations are necessary to foster growth while safeguarding consumers.

 

Implications of Proposed Reforms

 

Economic Impact

 

The potential reforms proposed by Christie could have far-reaching economic implications:

 

  • Job Creation: Legalizing marijuana at the federal level could lead to significant job creation within the cannabis industry—from cultivation and production to retail sales.

  • Investment Opportunities: Descheduling cannabis would open up investment opportunities for institutional investors who have been hesitant due to federal restrictions.

  • Boosting Local Economies: Legal cannabis markets have proven beneficial for local economies through increased tax revenues and job creation.

 

Similarly, clear regulations around cryptocurrencies could stimulate investment in blockchain technology and related industries, fostering innovation and economic growth.

 

Social Justice Considerations

 

Both marijuana legalization and sensible cryptocurrency regulations have social justice implications:

 

  • Addressing Past Injustices: Legalizing marijuana could help rectify past injustices related to drug enforcement policies that disproportionately affected marginalized communities.

  • Financial Inclusion: Cryptocurrencies offer opportunities for financial inclusion for those underserved by traditional banking systems, particularly in low-income communities.

 

Political Landscape

 

The political landscape surrounding these issues is complex. While there is bipartisan support for marijuana reform among certain lawmakers, challenges remain in overcoming entrenched opposition. Similarly, cryptocurrency regulation has garnered attention from both sides of the aisle but requires collaboration to establish effective frameworks.

 

Conclusion

 

Chris Christie’s predictions about President-elect Donald Trump’s approach to federal marijuana descheduling and cryptocurrency regulation suggest a potential shift in U.S. policy that could significantly reshape both industries. As public opinion evolves on these issues, lawmakers have an opportunity to enact meaningful reforms that promote economic growth while ensuring consumer protection. The anticipated changes could foster a more robust cannabis industry that contributes positively to the economy and addresses social justice concerns, while clear regulatory frameworks for cryptocurrencies could encourage innovation and protect consumers in the digital economy. Stakeholders in both sectors are closely watching these developments, eager to see how potential reforms might impact their futures. While the realization of Christie’s predictions remains uncertain, it’s clear that the conversation around marijuana and cryptocurrency regulation is ongoing and far from settled.

 

TRUMP 2.0 ON CANNABIS REFORM, READ ON…

TRUMP ON MARIJUANA REFORM

TRUMP 2.0 ON FEDERAL CANNABIS REFORM – WHAT DO WE KNOW?

 



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Webinar Replay: Post-Election Cannabis Wrap – Smoke ’em if You’ve Got ’em

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On Thursday, November 7th, Vince Sliwoski, Aaron Pelley and Fred Rocafort held a post election discussion “Post-Election Cannabis Wrap – Smoke ’em if You’ve Got ’em”. Watch the replay!

Key Takeaways from the “Smoke ’em if You’ve Got ’em – 2024 Post Election Cannabis Wrap” Webinar:

  1. Panelists:
    • Vince Sliwoski: Oregon Business lawyer specializing in cannabis and commercial real estate.
    • Aaron Pelley: Experienced in cannabis law since Washington’s legalization in 2012.
    • Fred Rocafort: Trademark attorney working closely with the cannabis team.
  2. Election Results Overview:
    • Most 2024 cannabis ballot measures did not pass.
    • Florida, South Dakota, and North Dakota saw failures.
    • Nebraska became the 39th state to legalize cannabis for medical use when it passed two cannabis initiatives, Initiatives 437 and 438.
  3. Federal and State-Level Developments:
    • Medical use is currently legal in 38 states, and 24 states allow recreational use.
    • Republican support for marijuana legalization is growing.
  4. Federal Policy Implications:
    • Schedule III Rescheduling: The process to move cannabis to Schedule III is ongoing, which could significantly impact the industry.
    • Importance of Federal Appointments: The future of cannabis policy depends heavily on who is appointed to key positions in the administration.
  5. International and Domestic Trade:
    • Schedule III status could ease import/export restrictions on cannabis.
    • Unified control of House, Senate, and presidency might expedite legislative progress.
  6. Economic and Industry Impact:
    • Cannabis stocks experienced volatility post-election, reflecting investor uncertainty.
    • Federal legalization and banking reforms are crucial for industry stability and growth.
  7. Future Outlook:
    • The potential for federal rescheduling remains strong, with hearings scheduled for early 2025.
    • State-level initiatives and regulatory developments will continue to shape the industry.

Watch the replay!



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I Had Just One Puff

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one puff of a joint a drug test

“How Long Does One Puff of Weed Stay in Your System?”… This topic can be difficult to answer since it is dependent on elements such as the size of the hit and what constitutes a “one hit.” If you take a large bong pull then cough, it might linger in your system for 5-7 days. A moderate dose from a joint can last 3-5 days, whereas a few hits from a vaporizer may last 1-3 days.

 

The length of time that marijuana stays in the body varies based on a number of factors, including metabolism, THC levels, frequency of use, and hydration.

 

Delta-9-tetrahydrocannabinol, or THC, is the primary psychoactive component of cannabis. THC and its metabolites, which remain in your body long after the effects have subsided, are detected by drug tests.

 

Since these metabolites are fat-soluble, they cling to bodily fat molecules. They could thus take a while to fully pass through your system, particularly if your body fat percentage is higher.

 

THC is absorbed by tissues and organs (including the brain, heart, and fat) and converted by the liver into chemicals such as 11-hydroxy-THC and carboxy-THC. Cannabis is eliminated in feces at a rate of around 65%, while urine accounts for 20%. The leftover amount might be kept within the body.

 

THC deposited in bodily tissues ultimately re-enters the circulation and is processed by the liver. For frequent users, THC accumulates in fatty tissues quicker than it can be removed, thus it may be detectable in drug tests for days or weeks following consumption.

 

The detection time varies according to the amount and frequency of cannabis usage. Higher dosages and regular usage result in longer detection times.

 

The type of drug test also affects detection windows. Blood and saliva tests typically detect cannabis metabolites for shorter periods, while urine and hair samples can reveal use for weeks or even months. In some cases, hair tests have detected cannabis use over 90 days after consumption.

 

Detection Windows for Various Cannabis Drug Tests

 

Urine Tests

Among all drug tests, urine testing is the most commonly used method for screening for drug use in an individual.

 

Detection times vary, but a 2017 review suggests the following windows for cannabis in urine after last use:

 

– Single-use (e.g., one joint): up to 3 days

– Moderate use (around 4 times a week): 5–7 days

– Chronic use (daily): 10–15 days

– Chronic heavy use (multiple times daily): over 30 days

 

Blood Tests

Blood tests generally detect recent cannabis use, typically within 2–12 hours after consumption. However, in cases of heavy use, cannabis has been detected up to 30 days later. Chronic heavy use can extend the detection period in the bloodstream.

 

Saliva Tests

THC can enter saliva through secondhand cannabis smoke, but THC metabolites are only present if you’ve personally smoked or ingested cannabis.

 

Saliva testing has a short detection window and can sometimes identify cannabis use on the same day. A 2020 review found that THC was detectable in the saliva of frequent users for up to 72 hours after use, and it may remain in saliva longer than in blood following recent use.

 

In areas where cannabis is illegal, saliva testing is often used for roadside screenings.

 

Hair Tests

Hair follicle tests can detect cannabis use for up to 90 days. After use, cannabinoids reach the hair follicles through small blood vessels and from sebum and sweat surrounding the hair.

 

Hair grows at approximately 0.5 inches per month, so a 1.5-inch segment of hair close to the scalp can reveal cannabis use over the past three months.

 

Factors Affecting THC and Metabolite Retention

 

The length of time THC and its metabolites stay in your system depends on various factors. Some, like body mass index (BMI) and metabolic rate, relate to individual body processing, not the drug itself.

 

Other factors are specific to cannabis use, including:

 

– Dosage: How much you consume

– Frequency: How often you use cannabis

– Method of consumption: Smoking, dabbing, edibles, or sublingual

– THC potency: Higher potency can extend detection time

 

Higher doses and more frequent use generally extend THC retention. Cannabis consumed orally may remain in the system slightly longer than smoked cannabis, and stronger cannabis strains, higher in THC, may also stay detectable for a longer period.

 

How Quickly Do the Effects of Cannabis Set In?

 

When smoking cannabis, effects appear almost immediately, while ingested cannabis may take 1–3 hours to peak.

 

The psychoactive component THC produces a “high” with common effects such as:

 

– Altered senses, including perception of time

– Mood changes

– Difficulty with thinking and problem-solving

– Impaired memory

 

Other short-term effects can include:

– Anxiety and confusion

– Decreased coordination

– Dry mouth and eyes

– Nausea or lightheadedness

– Trouble focusing

– Increased appetite

– Rapid heart rate

– Restlessness and sleepiness

 

In rare cases, high doses may lead to hallucinations, delusions, or acute psychosis.

 

Regular cannabis use may have additional mental and physical effects. While research is ongoing, cannabis use may increase the risk of:

 

– Cognitive issues like memory loss

– Cardiovascular problems including heart disease and stroke

– Respiratory illnesses such as bronchitis or lung infections

– Mood disorders like depression and anxiety

 

Cannabis use during pregnancy can negatively impact fetal growth and development.

 

Duration of Effects

Short-term effects generally taper off within 1–3 hours, but for chronic users, some long-term effects may last days, weeks, or even months. Certain effects may even be permanent.

 

Bottom Line

The amount of time that cannabis remains in your system following a single use varies greatly depending on individual characteristics such as body fat, metabolism, frequency of use, and mode of intake. Frequent users may maintain traces of THC for weeks, whereas infrequent users may test positive for as little as a few days. Hair tests can disclose usage for up to 90 days, while blood and saliva tests identify more recent use. Urine tests are the most popular and have varying detection durations. The duration that THC and its metabolites are detectable will ultimately depend on a number of factors, including dose, strength, and individual body chemistry.

 

PEE IN A CUP COMING UP, READ ON..

how long does weed stay in your urine

HOW LONG DOES WEED STAY IN YOUR URINE FOR A DRUG TEST?



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