Where in the World is Cannabis Island & Its Secret Plants? The Leafly Legalization RoundupLisa RoughJuly 13, 2015
Many states are facing numerous deadlines for legislation, but the marijuana movement keeps progressing through it all. A major cannabis banking bill is making waves, Alaska’s recreational lawmakers just released regulations, and Chile is on the verge of decriminalization. To top it off, Crimean authorities just discovered an island covered for miles with cannabis, as far as the eye can see. We’ve got the latest in cannabis legalization updates – are you in the know?
U.S. Cannabis Updates
A bipartisan group of senators, including presidential hopeful Rand Paul, have signed on to a crucial piece of legislation that could reform federal banking laws for cannabis businesses across the United States. The Marijuana Business Access to Banking Act of 2015 would restrict federal banking regulators from discriminating against institutions that dealt with state-sanctioned legal cannabis businesses.
The bill would not force banks to work with cannabis businesses, but it would create a safe harbor for institutions that choose to provide these services and would give state-sanctioned legal marijuana companies the opportunity to safely secure their revenue, as well as make their businesses run more smoothly and reliably. As more and more states consider legalization, this bill would ease the transition and improve the current circumstances for states that have already legalized.
Alaska’s Alcoholic Beverage and Marijuana Control Board just released the draft regulations for the implementation of the state's new retail system. The regulations cover a variety of issues related to the retail selling of cannabis, including who can obtain a retail license, handler permits, health and safety standards, and restrictions on advertising. It prohibits licensing to those who have been illegally operating a cannabis club or delivery service two years before the regulations go into effect unless the owner has worked diligently to comply with current laws. The regulations also establish that cannabis delivery services will not be permitted under the new law.
The board will be accepting comments from the general public until August 8th, and the first business licenses will be issued in May of 2016.
A San Francisco federal appeals court ruled against medical marijuana dispensaries in California, saying that cannabis businesses can’t deduct business expenses from their taxable income due to the federal prohibition. The Vapor Room operated as a social club in the Lower Haight neighborhood of San Francisco until mid-2012, when it shut down due to pressure from federal prosecutor Melissa Haag. It was located within 1000 feet of Duboce Park, which increases federal penalties, and Attorney Haag was seeking their eviction.
The owner, Martin Olive, claimed $650,000 in business expenses on his federal tax returns but, predictably, the Internal Revenue Service would not honor those expenses. This led to the appeals court, where Judge Susan Graber stated, “If Congress now thinks that the policy embodied in tax deduction disallowance is unwise as applied to medical marijuana sold in conformance with state law, it can change the law. We may not.”
Indeed, federal banking policies have fallen behind the times, but it’s never too late for change.
Minnesota’s medical cannabis program is finally up and running, but despite the fact that the medical cannabis industry has an estimated market value of $1.7 billion per year, based on the way the law is written, it’s unlikely that Minnesota will be collecting any of those profits. The state's law does not establish any kind of sales or excise tax on cannabis products. Medical patients pay an annual fee of $200 to the state, although patients who qualify for Social Security Disability or other public assistance programs may pay a discounted rate of $50. With a predicted number of 5,000 patients, the registration fees could net the state $1 million annually.
The program was allotted $2.8 million to get started and there were 12 companies that each paid the state a $20,000 fee to be considered as an authorized manufacturer. Prescription costs could run patients between $250 and $600 monthly, which would go straight to the dispensary. Legislators have stressed that this law is to help sick patients obtain the treatment they need. Unfortunately, since the program’s implementation, less than 200 patients have qualified for registration.
Montana is seeking a recreational cannabis bid thanks to a Helena man who has submitted a proposal to amend the state’s constitution in order to legalize recreational cannabis for adults 21 and older. The initiative’s language is based on the cannabis law passed in Colorado in 2012 and would allot taxes towards education. In order to get the initiative on the ballot for the 2016 general election, the author, Anthony Varriano, will need to collect 50,000 signatures required for a constitutional amendment. You can do it, Montana — the sky’s the limit!
Ohio’s attempt at a marijuana legalization bid, which would create a legal, for-profit medical and recreational cannabis program, is falling short, with a 42 percent validity rate based on recent spot checks. None of the five boards have completed the validation process, which must be finished by July 16th. Responsible Ohio, the group in charge of the bid, submitted 695,273 signatures to put the initiative on the ballot; however, with such low validity rates (and many false signatures), the group is about 13,000 signatures short. They will announce the results of the signature tally on July 21st, upon which the group may be given a “ten-day cure period” where they may collect as many signatures as possible during that timeframe.
Curiously, an item that is already on the ballot for November is an anti-monopoly issue. The proposal would require a two-step, multiyear process for economic-based amendments, making it much more difficult to get such an amendment to be considered. If this bill passes, it would essentially nullify Responsible Ohio’s proposal, which had planned to establish a monopoly for the five organizations already financially invested in producing, processing, and selling cannabis.
One of the biggest changes coming to Oregon in the wake of the state's recreational legalization implementation is an unexpected but nice perk. Passengers traveling on flights within the state may carry up to one ounce of cannabis so long as they are staying within the bounds of the new law. Traveling across state lines with cannabis continues to be a federal crime, but if you meet all the legal requirements, the TSA has said that their agents are not looking for legal cannabis, they're instead focusing on security threats.
Many businesses that were once considered lawful are receiving ominous warnings from King County to “wrap it up” and close down in lieu of a state license. Washington's licenses for medical cannabis establishments are reserved for specific businesses that meet the required qualifications.
Another bill recently signed into law, House Bill 2136, outlaws marijuana locations that allow the use of cannabis on-site through legal loopholes by requiring a membership fee, making it a “private setting.” HB 2136 closes the loophole and makes operating “a club, association, or other business, for profit or otherwise, that conducts or maintains premises for the primary or incidental purpose of providing a location where members or other persons may keep or consume marijuana on the premises” a class C felony.
International Cannabis Updates
Chilean lawmakers just approved a measure to allot citizens to grow and use small amounts of cannabis for medical, recreational, or spiritual purposes. The bill must still be considered by a health committee and the Senate before being enacted, but it is reflective of a general trend of easing restrictions on the use of cannabis in South America. It would allow for adults over the age of 18 to grow up to six plants, store up to 500 grams, and/or possess up to 10 grams for personal use, and would decriminalize recreational cannabis use as well, although medical marijuana patients would still need to file for a prescription for their medicine.
Congressman Giorgio Jackson commented on the bill, saying, “I hope we can reinforce the education process to avoid stigmatizing [cannabis] consumption….This bill advances civil liberties and the end of drug trafficking.”
Officials in Crimea discovered an artificially created island on the Black Sea peninsula in the Syvash gulf. Concealed behind the island’s tall rushes were row upon row of cannabis plants spanning nearly 2,000 square meters. The island, dubbed by the media as “Cannabis Island” (and nicknamed “Heaven” by everyone else), contained more than 1,000 plants in three separate marijuana plantations, with a preliminary estimated street value of about $3.5 million. The plants have since been destroyed.
Did you miss last week's legalization roundup? Check it out and stay informed!