Author: Steven M Smith

You thought you had banking and credit card problems. The Cannabis Industry is finally gaining Positive Momentum.

The push for legislation that would allow banks to do business with cannabis companies without the risk of federal enforcement action is gaining momentum, and credit unions are playing a key role. 

The National Association of State Treasurers adopted a resolution on Friday that calls for “common-sense federal laws and regulations” for companies in states that have legalized cannabis for medical or recreational use that are forced to deal with large amounts of cash. 

“Cash-based systems are inefficient, expensive and opaque, making illicit activity more difficult to track and posing a significant risk to public safety by increasing the likelihood of violent crime,” the association said in its resolution. 

Because cannabis remains a Schedule I drug at the federal level, a classification that groups it with heroin, federally insured banks are unable to do business with companies for fear of being shut down, a situation that experts agree is hampering the development of the sector. 

As Canadian companies enjoy their first-mover status in the only G-7 country to fully legalize cannabis, U.S. companies have been unable to open bank accounts or tap capital markets to raise the funds needed to grow their businesses, and many have been forced to hire security companies, such as Brink’s Co., to guard cash piles. 

Ryan Donovan, chief advocacy officer for the Credit Union National Association (CUNA), said one out of every two cannabis businesses has been robbed. “We wouldn’t tolerate that in any other industry, and we shouldn’t tolerate it here,” he told MarketWatch. 

Credit unions have a core mission of serving the communities they operate in, and are keen to help the fledgling cannabis sector grow and thrive, but they, too, need a safe harbor or state exemption to fully participate, he said. CUNA has no official position on cannabis itself, but it would like to see one of two measures currently under consideration be adopted, said Donovan.

The Secure and Fair Enforcement (SAFE) Banking Act is a bipartisan bill introduced in March that would protect banks and their employees from liability for federal prosecution when servicing cannabis companies. The bill is sponsored by Colorado Democratic Rep. Ed Perlmutter, Washington Democratic Rep. Denny Heck and two Ohio Republicans, Steve Stivers and Warren Davidson, and is supported by the banking sector, the National Association of Attorneys General and Treasury Secretary Steven Mnuchin, among others.

Separately, lawmakers are promoting the Strengthening the Tenth Amendment Through Entrusting States (STATES) Act, which gives each state the right to determine its own approach to cannabis legislation. That bill is backed by Elizabeth Warren and Cory Gardner, both Senate Democrats and presidential hopefuls and Attorney General William Barr has said it is his preferred solution.

“The bill that becomes law will be the better bill,” said Donovan. “Our interest is making sure that credit unions can service businesses that are legal at [the] state level, either through a safe harbor or a law that recognizes [a] state’s authority to decriminalize the substance.” 

The issue runs deeper than the challenge of cash management. Cannabis companies face a variety of obstacles, including in acquiring real estate, in land-title issues and in buying insurance coverage.

“Like any other business on Main Street, they have deposit needs, but also payroll, building supplies, expanding and getting into other lines of business, and payments,” said Rachel Pross, chief risk officer at Maps Credit Union in Salem, Ore., which has been working with cannabis companies since 2014. While companies are banned from using card networks, Maps can allow them to wire money and use online banking and pay with direct deposits.

Maps is not lending to the sector for now, although that would change if there’s a change in the federal treatment of cannabis companies. “It’s certainly something we would evaluate much more open-mindedly,” she said. 

Pross testified on behalf of CUNA at a Federal Committee in March, on her institution’s experience of banking and cannabis, emphasizing the risks to the community of cash-only businesses. 

Maps has received more than $500 million in cash deposits from cannabis companies in the last two years, she said. “That’s $500 million removed from Oregon’s sidewalks that used to be carried around in backpacks and shoe boxes by legitimate, legal business owners,” she said. 

Cannabis banking can be conducted safely and effectively, she argued. The Maps approach is to collect extensive records and to conduct criminal checks on account signers to ensure they are complying with all state laws and regulations. The credit union has invested in the infrastructure needed to monitor and maintain high-risk cannabis accounts and files quarterly suspicious-activity reports on any account suspected of engaging in illegal activities.

Financial institutions that decide not to bank for the sector are still at risk of serving those businesses, she told the hearing.

“Indirect connections are often difficult to identify and avoid because growers and retailers don’t operate in a vacuum,” she said. “Like any other industry, they work hand-in-hand with vendors and suppliers. These are Main Street businesses like the printing company that makes a business card, the landlord that rents office space, and even the utility company that provides water or electricity. Under the existing status quo, a credit union that does business with any one of these indirectly affiliated entities could unknowingly risk violating federal law.”

Most states that have legalized have done so through the ballot, demonstrating the growing public support for cannabis. It’s now up to lawmakers to devise the rules needed to protect them.

Published: May 22, 2019 7:39 a.m. ET

Edited for content.

An entire industry is being built around cannabidiol, or CBD, one of the many chemical constituents of the cannabis plant. Advocates of the compound say it confers all sorts of health benefits, from mitigating the symptoms of depression and anxiety to treating glaucoma. It’s cropping up in protein powders, bath salts, makeup and even jelly beans.

But scientists are still unsure of exactly what the benefits — and pitfalls — of CBD are. 

“Society has jumped way ahead of the science on this,” said Margaret Haney, a professor of neurobiology at Columbia University Medical Center in New York. Reported benefits have mostly been anecdotal, or they have come from studies involving animal models. CBD isn’t well understood, nor have there been sufficient studies done in humans, she said.

Cannabis plants produce a group of chemical compounds called cannabinoids. The best-known are tetrahydrocannabinol, or THC (the so-called psychoactive component of the plant that’s associated with the marijuana “high”), and CBD (a non-intoxicating component of the plant that doesn’t produce a high), Hemp. Recently, Legal to grow and process for CDB.

Here’s what we do know: CBD can help treat some types of pediatric seizures. Last year, the FDA approved GW Pharmaceuticals PLC’s Epidiolex for the treatment of seizures associated with two rare forms of epilepsy in patients two years of age and older. But, to get to that point, GW Pharmaceuticals had to go through a long and rigorous drug-approval process to show the drug’s safety and efficacy through clinical trials. This hasn’t been done with CBD for any other indication, until now.

While it’s true that CBD has shown promise in pre-clinical and animal trials in addressing a number of issues such as pain, anxiety, neuroinflammation and substance-use disorder, there’s still not nearly enough peer-reviewed research available, said Ziva Cooper, research director of the Cannabis Research Initiative at the University of California, Los Angeles. To truly determine the effects of CBD in humans, many further studies need to be done — studies with humans, she said.

“Overall, we have very little real data on the therapeutic effects of cannabidiol,” she said.

As for those CBD-based skin products that are popping up on shelves and online, Columbia University’s Haney said she remains skeptical of their marketed benefits. Many are diluted.

It’s a question of both dosage and absorption, she said. “We have no idea how much CBD you would need to rub on your skin for it to have some kind of medical effect,” she said. 

The amount of CBD in a lot of marketed products — even ones that are meant to be taken orally — is so small that we can not make any therapeutic measures for the person using it, said UCLA’s Cooper. In the few studies that have involved humans, doses were in the hundreds of milligrams, but most CBD-infused products contain much less than that, which the company says can be used as a daily supplement and help “promote a calm sense of well-being,” it also notes on its website that such statements “have not been evaluated by the Food and Drug Administration.” 

CBD advocates were hoping laws around the compound might loosen up — or at least become clearer — after President Donald Trump signed the 2018 Farm Bill. The bill legalized hemp, a variety of the cannabis plant that contains no more than 0.3% THC. But regulation of CBD, whether derived from hemp or not, is still largely under the FDA’s jurisdiction. Since CBD is technically an active ingredient in an FDA-approved drug, companies are not allowed to add it to food or drinks sold across state lines or to sell it as a dietary supplement. (Companies are, however, allowed to put the compound into beauty and skin-care products, as cosmetics are not subject to premarket approval by the FDA. That could explain why drugstore chains like CVS and Walgreens aren’t worried about introducing CBD-infused topical products in their stores.

“People shouldn’t confuse availability with legality,” said former FDA regulatory counsel Jonathan Havens. The agency has cracked down on unfounded claims, but it has limited resources and can’t get to everyone, so it is focusing mostly on companies making blatant health claims about their products, Havens said. The FDA recently sent warning letters to Advanced Spine and Pain LLC, Nutra Pure LLC and PotNetwork Holdings, saying the companies violated federal law by advertising their CBD-containing products as potential treatments for ailments including cancer, Alzheimer’s disease, arthritis and more. 

“The FDA wants to protect consumers. The last thing it wants is companies out there marketing CBD products and claiming health benefits without any clinical research to validate that,” said Rob DiPisa, co-chair of the Cannabis Law Group at law firm Cole Schotz. 

At the same time, requiring anyone who wants to put a CBD-containing food or beverage on the market to go through the clinical-trial process would “chill the whole CBD market,” he said. 

The FDA is aware of the public’s interest in CBD. Former FDA commissioner Scott Gottlieb put out a statement last month outlining steps to figure out a framework to lawfully market cannabis and cannabis-derived products, including planning a public hearing scheduled for May 31 and forming an internal working group to look into the issue. 

DiPisa said he hopes the hearing in May will provide more clarity for him and his clients. “Everyone is running blind right now,” he said.

Where is CBD illegal?
Thanks to the passing of the 2018 Farm Bill, zero THC CBD is not illegal in any state in the USA. That’s right; according to federal law, it is legal in all 50 states. With that being said, since the change in law is relatively new, some states might not fully embrace CBD. This should change with the new bill, however, it may take time. Below we outline four different jurisdictional categories based on pre-2018 Farm Bill practices.

States can be grouped into four jurisdictional categories.

Friendliest States.
These jurisdictions have explicit laws allowing retailers to sell industrial hemp-derived products.

These jurisdictions include Alaska, Colorado, Illinois, Indiana, Kentucky, Maryland, Missouri, New York, North Carolina, Oregon, Rhode Island, South Carolina, Tennessee, Utah, Vermont, and Wisconsin.

Friendly States.
In these jurisdictions industrial hemp grown in a Farm Bill-compliant agricultural pilot program is explicitly exempted from the definition of marijuana.

These jurisdictions include the District of Columbia, Hawaii, Kansas, Montana, New Mexico, North Dakota, and Oklahoma.

Gray Area States.
In these jurisdictions, explicit prohibitions against the retail sale of industrial hemp-derived CBD products but that have exemptions in the law for the argument that hemp-derived CBD products are legal.

These jurisdictions include Arkansas, Delaware, Florida, Georgia, Idaho, Iowa, Louisiana, Maine, Massachusetts, Minnesota, Mississippi, New Hampshire, New Jersey, Pennsylvania, Texas, Virginia, and Washington.

States with Concern.
These jurisdictions have no explicit prohibitions against the sale of industrial hemp-derived CBD products. However, recent law enforcement actions or pronouncements raise the risk of the retail sale of industrial hemp-derived CBD products.

These jurisdictions include Alabama, Arizona, California, Connecticut, Michigan, Nebraska, Nevada, Ohio, South Dakota, West Virginia, and Wyoming.

What are the specific rules in your state?

Concluding Thoughts: Is CBD Legal in 2019?
Yes, it is legal to purchase and consume hemp-derived-CBD in all 50 states.

Marijuana derived CBD is not legal federally.

The government classifies hemp as any plant of the cannabis family that contains less than 0.3% THC.

It classifies “marijuana” as any plant of the cannabis family that contains greater than 0.3% THC.

You need to check your specific state for any restrictions.

Federal law permissions for activities involving industrial hemp are clear. However, the Farm Bill, and other federal laws on industrial hemp, do not pre-empt state law.

Just as there are hundreds of municipalities in the United States that prohibit alcohol sales nearly a century after Prohibition’s repeal, local and state laws may still restrict the sale of industrial hemp products even where federal law is clearly permissive.

Some states continue to view CBD that comes from marijuana as being no different than marijuana itself. The government classifies any plant of the cannabis family that contains more than 0.3% THC to be marijuana.

Bottom line, it is legal to purchase and consume hemp-derived-CBD in all 50 states.

Keep checking back in this space for updates as there is currently a bill going through Congress right now that could change the way the government views both hemp and marijuana.

The 2018 Farm Bill holds the promise to clear up many of the misconceptions and confusing elements surrounding CBD.

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Based on a Study by Leafly, Evidence-Based Studies Refute Dispensary Fears
When a state legalizes cannabis, local municipal officials are put in a tough spot. They have the power to allow or prohibit cannabis stores from opening in their jurisdiction. It’s done through property zoning.
When the issue comes up for vote, the discussion is often dominated by imagined fears. Law enforcement leaders warn about crime increases. Parents worry about their kids having easier access to cannabis. Real estate agents forecast doom for any neighborhood surrounding a cannabis store. Pew Research has found a 25 point gap between support for legalization (75%), and support for a store nearby (50%).
A review of the research finds that cannabis dispensaries improve public safety, health, and nearby property values—contrary to previous fears.
All too often, the result is a complete ban on cannabis stores—which has the unintentional effect of propping up the local illicit market. Here’s the rub: Cannabis stores actually improve public safety, health, and property values. The research proves it.
In a review of 42 key studies, Leafly’s team of data analysts, researchers, and editors found that the broad body of published research suggests crime near licensed dispensaries has generally stayed flat or decreased. Teen cannabis use in legalization states has fallen since legalization. And property values near cannabis outlets generally are not affected or even rise.

Leafly’s report examined 42 published studies on the effects of cannabis medical dispensaries and adult-use stores. (Click to download.)
Click Here to Download ‘Debunking Dispensary Myths’
That literature review, Debunking Dispensary Myths, is intended to better inform civic debate at the city, state, and national levels. Leafly is sharing the report with elected officials, legislative aides, activists, industry groups, and researchers nationwide, as well as presenting the findings at upcoming events.
Fears surrounding local cannabis stores have prompted many communities to prohibit cannabis companies in their towns, cities, and counties. Millions of adult consumers now living in legal states find it impossible to purchase legally in their own towns. Leafly found that as of May 1, 2019:
In California, 75% of jurisdictions have banned cannabis stores.
In Colorado, 65% of cities and counties have similar bans.
In Massachusetts, 54% of the state’s 351 municipalities have banned cannabis stores.
In Washington, 35% of cities and 20% of counties have banned cannabis stores.
In Nevada, 75% of counties and 42% of cities prohibit cannabis stores.

Clean Stores, Good Neighbors
In Colorado and Washington, where data is now available from five years of adult-use cannabis sales, many local officials have switched from hesitance to confidence in the positive benefits of well-regulated stores. Cannabis companies “are tremendous employers and socially responsible members of the communities in which they operate,” said Ron Kammerzell, former senior director of enforcement at the Colorado Dept. of Revenue.

The Lux cannabis store in Seattle’s Lake City neighborhood is the cleanest, brightest property in a transitional business district. (Photo courtesy of Lux)
Dispensaries Add 6% to 8% to Home Values
Some of the data backing up that conclusion:
Crime rates unaffected: An overwhelming majority of studies—including one from the journal Preventive Medicine in 2018, and a Federal Reserve Bank 2017 paper—found no increase in crime related to the location of medical marijuana dispensaries or adult-use retail stores.
Teen use unaffected specifically, declines generally: Colorado and Oregon state health reports show teen cannabis use flat or down since licensed adult-use stores opened. In Washington, a 2018 JAMA Pediatrics study concluded use had fallen. Federally administered surveys show the 2016 teen use rate was the lowest in more than 20 years.
Property values increase: A 2016 study in the journal Economic Inquiry concluded allowing stores added 6% to city home prices, compared to ban towns. A 2018 study in the journal Contemporary Economic Policy found home prices went up by 7.7% within a half-mile of a new cannabis store
Debunking Dispensary Myths identifies and examines the most reliable studies on medical and adult-use cannabis stores. In the report, Leafly editors David Downs and Bruce Barcott worked with cannabis policy expert Dominic Corva, co-director of the Humboldt Institute for Interdisciplinary Marijuana Research (HIIMR) at Humboldt State University in Arcata, CA.
Over the coming years, virtually every city council and county supervisorial board will eventually have to weigh the pros and cons of cannabis retail.“We can all have different opinions, but we have to work from the same set of facts,” said Leafly CEO Tim Leslie. “These discussions should be informed by the best available research, not imagined fears and archaic mythology.”
David Downs and Bruce Barcott

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These are the differences between CBD, THC oils. CBD and THC oils, derived from hemp or marijuana, are being used medically in the U.S. Their uses and legality vary from State to State. Although, Legislation has Approved the Production and Transfer across State Lines, some State have held fast to the notion that CBD without THC is illegal. And they are enforcing it.
A drug possession charge has been dropped against the 69-year-old North Carolina woman who was found with a bottle of doctor-recommended CBD oil in her purse at Disney World, according to the Associated Press.
Hester Jordan Burkhalter was stopped and arrested by an Orange County sheriff’s deputy at one of the park’s check points, Fox News reported.
Burkhalter spent 12 hours in jail before she was released on $2,000 bond on April 15, after being charged with possession of hashish, according to WDBO.
She pleaded not guilty in court, and prosecutors said in a court filing that her case “wasn’t suitable for prosecution,” reported the Associated Press.

Burkhalter’s doctor recommended she use CBD oil to help alleviate pain caused by her arthritis, the radio station reported.
“I have really bad arthritis, in my legs, my arms and my shoulder and I used it for the pain, because it helps,” Burkhalter said in a video posted by WOFL.
Even though she had a note of recommendation from her doctor, she was still arrested because CBD oil is illegal in Florida, even though it is sold “across the state,” according to Fox News.
“I didn’t know what to think. I couldn’t understand it,” Burkhalter said in the video. “I didn’t feel like I done nothing wrong. I’ve never had but one speeding ticket in my life. I’ve never been in a jailhouse.”
The Sheriff’s Office said the deputy was following the law in making the arrest, even though her peppermint CBD oil contained zero milligrams of THC, WOFL reported.
CBD is extracted from hemp. But unlike marijuana, CBD oil does not contain THC, the active agent that gets people stoned, according to CBS News.

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Noah Feit is a Real Time reporter with The State and McClatchy Carolinas Regional Team. The award-winning journalist has worked for multiple newspapers since starting his career in 1999.

Original story printed here: https://www.miamiherald.com/news/nation-world/national/article230142959.html#storylink=cpy

Edited for content 5-14-2019