The Cannabis Thread

[Kiwithrottlejockey]

from The Washington Post....

Why this ‘horrible’ idea for how to legalize pot could be worth voting for

By CHRISTOPHER INGRAHAM | Friday, July 01, 2016


Micah Sherman, 32, and Nicole Graf, 28, who moved from Brooklyn to cultivate cannabis, care for the “mother plants”, which will
seed their 7,000-square-foot indoor farm in a warehouse south of Seattle, on March 15th, 2014, in Olympia, Washington.
 — Photograph: Gilles Mingasson/Getty Images.

CALIFORNIA's marijuana legalization initiative is “horrible, awful, very bad no-good drug policy,” said a leading marijuana expert who helped implement Washington state's legal market. That said, he'd vote for it, anyway.

Mark Kleiman, a professor of public policy at New York University, wrote this week that marijuana would become so inexpensive under California's proposed legalization ballot initiative, the Adult Use of Marijuana Act, that a dramatic rise in heavy marijuana use and marijuana-related disorders would be very possible.

Kleiman points to falling marijuana prices in Washington state, where the drug is already legal, as an example. He notes that some marijuana shops there are offering highly potent marijuana — 18 percent THC — for as little as $95 an ounce. He then does the math:

A typical joint contains about 0.4 gram of cannabis. $95/oz. is $3.50/gm. So a joint of “Uncle Ike's Budget Bud” in Seattle has about $1.40 worth of cannabis in it. At 18% THC — aka “one-hit weed” — that should get three naïve users wrecked out of their gourds (if you'll allow me the use of technical terminology) for about three hours each. That comes to about 15 cents per stoned hour, making cannabis far more cost-effective than even very cheap beer on a per-hour basis.

By Kleiman's reckoning, California's weed would be even cheaper than that within three years of legalization. This could be good for knocking out the illicit market, but there's a big downside, too: if pot is dirt-cheap, there's little to stop problem users from taking Dr. Dre and Snoop Dog's advice to “smoke weed everyday” quite literally.

Overall rates of monthly marijuana use among U.S. adults have changed little over the past several decades. But as Kleiman notes, some changes are happening within that group of monthly users: “In 1992, about 10 percent of people who reported using cannabis the past month reported having used it on 25 or more days that month. That number is up to 40 percent.”

Kleiman worries that ever-cheaper marijuana could drive that proportion of daily users, many of whom meet diagnostic criteria for drug dependency, even higher.

Kleiman's criticism is significant, given the respect he commands in drug policy circles and his reputation as a radical centrist on marijuana issues. Many of the contemporary arguments against marijuana legalization seem like throwbacks of decades past, grounded in dubious arguments, misuse of statistics and the occasional outright falsehood.

But Kleiman comes at the issue from a data-driven public health perspective. He's less opposed to legalization per se than he is to the fully commercialized markets springing up in Colorado and elsewhere. He says that a truly ideal policy might look like what we currently have in Washington D.C., where growing and giving pot is legal but selling it is not. He points out that there are a host of other legalization options between prohibition and commercialization that policymakers could consider.

Advocates of California's ballot measure point out that it contains funding for the prevention of teen drug use and additional law enforcement. They say that it will build on and strengthen regulatory measures recently put in place in the state's medical marijuana market. And the measure has drawn support from a wide array of politicians (including Democratic Lieutenant Governor Gavin Newsom and Republican U.S. Representative Dana Rohrabacher), public health groups (including the California Medical Association), and civil rights organizations such as the American Civil Liberties Union of California and the California NAACP.

Both Kleiman and the bill's backers agree on at least one thing: Given the current political environment, the measure is likely to pass this fall. Current polling in California puts support for legalization at about 60 percent, with 37 percent opposed.

Given all his concerns, I asked Kleiman whether he'd still vote for the California measure over the status quo. “Yes,” he said, “unless there were some prospect of something better as an alternative.”

• Christopher Ingraham writes about politics, drug policy and all things data for The Washington Post. He previously worked at the Brookings Institution and the Pew Research Center.

https://www.washingtonpost.com/news/wonk/wp/2016/07/01/leading-pot-expert-calls-californias-legalization-bill-horrible-says-hed-vote-for-it-anyway

[Kiwithrottlejockey]

from The Washington Post....

One striking chart shows why pharma
companies are fighting legal marijuana

By CHRISTOPHER INGRAHAM | 10:01AM EDT - Wednesday, July 13, 2016


Marijuana buds. — Photograph: Sarah L. Voisin/The Washington Post.

THERE'S a body of research showing that painkiller abuse and overdose are lower in states with medical marijuana laws. These studies have generally assumed that when medical marijuana is available, pain patients are increasingly choosing pot over powerful and deadly prescription narcotics. But that's always been just an assumption.

Now a new study, released in the journal Health Affairs, validates these findings by providing clear evidence of a missing link in the causal chain running from medical marijuana to falling overdoses. Ashley and W. David Bradford, a daughter-father pair of researchers at the University of Georgia, scoured the database of all prescription drugs paid for under Medicare Part D from 2010 to 2013.

They found that, in the 17 states with a medical-marijuana law in place by 2013, prescriptions for painkillers and other classes of drugs fell sharply compared with states that did not have a medical-marijuana law. The drops were quite significant: In medical-marijuana states, the average doctor prescribed 265 fewer doses of antidepressants each year, 486 fewer doses of seizure medication, 541 fewer anti-nausea doses and 562 fewer doses of anti-anxiety medication.

But most strikingly, the typical physician in a medical-marijuana state prescribed 1,826 fewer doses of painkillers in a given year.



These conditions are among those for which medical marijuana is most often approved under state laws. So as a sanity check, the Bradfords ran a similar analysis on drug categories that pot typically is not recommended for — blood thinners, anti-viral drugs and antibiotics. And on those drugs, they found no changes in prescribing patterns after the passage of marijuana laws.

“This provides strong evidence that the observed shifts in prescribing patterns were in fact due to the passage of the medical marijuana laws,” they write.

In a news release, lead author Ashley Bradford wrote, “The results suggest people are really using marijuana as medicine and not just using it for recreational purposes.”

One interesting wrinkle in the data is glaucoma, for which there was a small increase in demand for traditional drugs in medical-marijuana states. It's routinely listed as an approved condition under medical-marijuana laws, and studies have shown that marijuana provides some degree of temporary relief for its symptoms.

The Bradfords hypothesize that the short duration of the glaucoma relief provided by marijuana — roughly an hour or so — may actually stimulate more demand in traditional glaucoma medications. Glaucoma patients may experience some short-term relief from marijuana, which may prompt them to seek other, robust treatment options from their doctors.

The tanking numbers for painkiller prescriptions in medical marijuana states are likely to cause some concern among pharmaceutical companies. These companies have long been at the forefront of opposition to marijuana reform, funding research by anti-pot academics and funneling dollars to groups, such as the Community Anti-Drug Coalitions of America, that oppose marijuana legalization.

Pharmaceutical companies have also lobbied federal agencies directly to prevent the liberalization of marijuana laws. In one case, recently uncovered by the office of Senator Kirsten Gillibrand (Democrat-New York), the Department of Health and Human Services recommended that naturally derived THC, the main psychoactive component of marijuana, be moved from Schedule 1 to Schedule 3 of the Controlled Substances Act — a less restrictive category that would acknowledge the drug's medical use and make it easier to research and prescribe. Several months after HHS submitted its recommendation, at least one drug company that manufactures a synthetic version of THC — which would presumably have to compete with any natural derivatives — wrote to the Drug Enforcement Administration to express opposition to rescheduling natural THC, citing “the abuse potential in terms of the need to grow and cultivate substantial crops of marijuana in the United States.”

The DEA ultimately rejected the HHS recommendation without explanation.

In what may be the most concerning finding for the pharmaceutical industry, the Bradfords took their analysis a step further by estimating the cost savings to Medicare from the decreased prescribing. They found that about $165 million was saved in the 17 medical marijuana states in 2013. In a back-of-the-envelope calculation, the estimated annual Medicare prescription savings would be nearly half a billion dollars if all 50 states were to implement similar programs.

“That amount would have represented just under 0.5 percent of all Medicare Part D spending in 2013,” they calculate.

Cost-savings alone are not a sufficient justification for implementing a medical-marijuana program. The bottom line is better health, and the Bradfords' research shows promising evidence that medical-marijuana users are finding plant-based relief for conditions that otherwise would have required a pill to treat.

“Our findings and existing clinical literature imply that patients respond to medical marijuana legislation as if there are clinical benefits to the drug, which adds to the growing body of evidence suggesting that the Schedule 1 status of marijuana is outdated,” the study concludes.

One limitation of the study is that it only looks at Medicare Part D spending, which applies only to seniors. Previous studies have shown that seniors are among the most reluctant medical-marijuana users, so the net effect of medical marijuana for all prescription patients may be even greater.

The Bradfords will next look at whether similar patterns hold for Medicaid.

• Christopher Ingraham writes about politics, drug policy and all things data at The Washington Post. He previously worked at the Brookings Institution and the Pew Research Center.

https://www.washingtonpost.com/news/wonk/wp/2016/07/13/one-striking-chart-shows-why-pharma-companies-are-fighting-legal-marijuana

[Kiwithrottlejockey]

from The Washington Post....

There's more on the ballot than Trump and Clinton:
A look at state ballot measures

About 160 proposals across the country could have
major impacts on drug and economic policy.

By KATIE ZEZIMA | 5:57PM EDT - Saturday, November 05, 2016


Marijuana is processed at Los Suenos Farms in Avondale, Colorado. Voters in several states will decide on ballot initiatives
to legalize marijuana for recreational or medical use. — Photograph: Brennan Linsley/Associated Press.

THERE'S A LOT MORE on the ballot on Tuesday than candidates for president and Congress.

Voters in 35 states will have the chance to weigh in on a host of ballot initiatives — about 160 in all — that could have a major impact on national drug, economic and tax policies.

Residents of Arizona, California, Maine, Massachusetts and Nevada will vote on whether to legalize the recreational use of marijuana for adults. Polls show voters favoring legalization in all of the states, although some of the margins are small. Voters in Arkansas, Florida, Montana and North Dakota will vote on legalizing medical marijuana.

Advocates think support for marijuana legalization has galvanized in California and across the country since Colorado legalized marijuana in 2012, followed by Alaska, Oregon and Washington. They also say that approval of California's ballot measure, which includes a five-year moratorium on industrial-scale growing and carve-outs for small farmers, will send a signal that the rest of the country is ready for legalization.

“The California initiative is going to be the gold standard,” said Ethan Nadelmann, director of the Drug Policy Alliance, which is supporting legalization.

In an interview with Bill Maher on Friday, President Obama said he does not think legalization of marijuana is a panacea, but that if the initiatives are approved, about 20 percent of Americans will live in a state where marijuana is legal — making enforcement difficult for federal authorities.

“The Justice department, DEA, FBI — for them to try to straddle and try to figure out how they're supposed to enforce some laws in some places and not in others, that is not going to be tenable,” Obama said.

But some longtime marijuana farmers in Northern California are leery of the measure. They are wary of some of the measure's big-pocketed donors, including Facebook and Napster co-founder Sean Parker, and worry that it could create factory farming of marijuana in the state.

“There's a ton of fears,” said Chrystal Ortiz, a second-generation marijuana farmer on the Humboldt County Sun Growers Guild.

Gun-control advocates are looking for victories in Maine and Nevada, two rural states with robust gun cultures that will vote on whether to close a loophole in federal law and require background checks for almost all gun purchases. Californians will decide if they want to ban the sale of high-capacity magazines and require background checks for ammunition purchases. In Washington state, residents will vote on whether to allow family members to seek a temporary order barring a person from access to firearms if the person is determined to pose a risk to themselves or others.

Frustrated by congressional inaction, gun-control proponents are pursuing a strategy reminiscent of the one taken by same-sex marriage activists a decade earlier, attempting to change the law state by state.

In Colorado, voters will choose from a number of initiatives, including whether to create a single-payer health-care system.

The health measure has split liberals in the state, with supporters saying it will save Colorado residents money and curb health spending, and opponents arguing that the program will be too big and have a larger budget than the state government.

Voters will also have the chance to make assisted suicide legal in the state — a controversial measure that has been enacted in six other states — and to decide it should be harder to put initiatives on the ballot.

Coloradans will also join residents of Arizona, Maine and Washington state in choosing whether they want to raise the minimum wage. Polling has shown strong support for the measures in each state. Arizona, Colorado and Maine have proposed raising the minimum wage to $12 an hour by 2020; Washington wants to hike it to $13.50 by 2020. The Arizona and Washington measures also mandate paid sick leave for employees.

“There's been so much media coverage of Trump and Clinton … that it's hard to compete,” said Jonathan Schleifer of the Fairness Project, which has worked to put the wage initiatives on the ballot.

Maine Governor Paul LePage likened increasing the minimum wage to the “attempted murder” of senior citizens “because it is pushing people to the brink of survival,” he said on a South Portland radio station.

In California, the pharmaceutical industry has spent millions of dollars fighting a proposition that would limit the price state agencies pay for prescription drugs, requiring them to pay no more than the Department of Veterans Affairs. It was spurred by stories of massive increases in the price of EpiPens and other drugs. Opponents worry it could drive up the cost of pharmaceuticals for residents who get their drugs through private plans.

A number of criminal justice initiatives are up for a vote, including some on the death penalty. In Oklahoma, voters will consider an amendment allowing the legislature to provide for any method of execution not prohibited by the U.S. Constitution. Voters in the state will also decide if they want to change the classification of certain drug and property crimes from a felony to a misdemeanor and, if enacted, start a fund that funnels money toward treatment programs. The two questions have bipartisan support and the backing of the American Civil Liberties Union.

Voters in California will choose between two competing ballot measures on the death penalty: one that would bar the practice and another that would speed up the execution process. And Nebraska residents will decide if they want to repeal a 2015 law that eliminated the death penalty in the state.

• Katie Zezima is a national political correspondent covering the 2016 presidential election. She previously served as a White House correspondent for The Washington Post.

__________________________________________________________________________

Related story:

 • Here's how gun control advocates are hoping to finally win on Tuesday

https://www.washingtonpost.com/politics/theres-more-on-the-ballot-than-trump-and-clinton-a-look-at-state-ballot-measures/2016/11/05/ba440dac-a1ea-11e6-a44d-cc2898cfab06_story.html

[Kiwithrottlejockey]

from The Washington Post....

Marijuana wins big on election night

By CHRISTOPHER INGRAHAM | 8:40PM EST - Tuesday, November 08, 2016


Photograph: Linda Davidson/The Washington Post.

VOTERS in California and Massachusetts approved recreational marijuana initiatives on Tuesday night, and several other states passed medical marijuana provisions in what is turning out to be the biggest electoral victory for marijuana reform since 2012, when Colorado and Washington first approved the drug's recreational use.

Of the five recreational marijuana initiatives on the ballot, two passed and two more — in Nevada and Maine — were at midnight in preliminary vote totals. A similar measure in Arizona was trailing with 53 percent of votes counted.

On the medical side, voters in Florida, North Dakota and Arkansas have approved medical marijuana initiatives. A separate measure in Montana that would loosen restrictions on an existing medical pot law is currently leading with only 9 percent of votes counted so far.

Reformers were jubilant. “This represents a monumental victory for the marijuana reform movement,” said Ethan Nadelmann, executive director of the Drug Policy Alliance, in a statement. “With California’s leadership now, the end of marijuana prohibition nationally, and even internationally, is fast approaching.”

California has long been seen as a bellwether by both supporters and opponents of marijuana reform. The state is home to about 12 percent of the U.S. population. Given the size of the state's economy and the economic impact of the marijuana industry there, California's adoption of legal marijuana could prompt federal authorities to rethink their decades-long prohibition on the use of marijuana for any purposes.

In a recent interview with Bill Maher, President Barack Obama said that legalization in California could make the current federal approach to the drug “untenable.”



Still, the likelihood of a Trump White House leaves a lot of uncertainty about the fate of marijuana measures in the next four years. Under Obama, federal authorities largely took a hands-off approach to state-level legalization efforts. But an incoming administration more skeptical of drug reform could easily reverse that approach.

“The prospect of Rudy Giuliani or Chris Christie as attorney general does not bode well,” the Drug Policy Alliance's Nadelmann said in an interview. “There are various ways in which a hostile White House could trip things up.”

Still, Nadelmann pointed to the success of marijuana measures in the midst of an evident Republican wave as a sign that support for legalization now cuts deeply across party lines. And citing Trump's often contradictory statements on marijuana and drug use in the past, Nadelmann added that “Donald Trump personally could probably go any which way on this.”

With today's votes, legal marijuana is also making significant inroads in the northeast. “Marijuana legalization has arrived on the East Coast,” said Tom Angell of the marijuana reform group Marijuana Majority in an email. “What Colorado and other states have already done is generating revenue, creating jobs and reducing crime, so it’s not surprising that voters in more places are eager to end prohibition.”

Votes on medical marijuana in Florida and North Dakota were decisive. With 99 percent of precincts reporting, the Associated Press has declared that Florida's Amendment 2 has passed with 71 percent support. In North Dakota, the Associated Press reports that 64 percent of voters currently approve of the medical marijuana measure with 71 percent of precincts reporting.

Two years ago a medical marijuana measure in Florida earned 58 percent of the vote, just shy of the 60 percent threshold needed for passage. Then, as now, opposition to the measure was fueled by multi-million dollar donations from Sheldon Adelson, the Las Vegas casino magnate and GOP donor. In 2014 Adelson spent $5.5 million to defeat the measure. This year he's spent $1.5 million in Florida, and several million more to defeat recreational marijuana measures in other states.

“This is a major tipping point,” said Tom Angell of Florida's vote. “With Florida's decision, a majority of states in the U.S. now have laws allowing patients to find relief with medical marijuana, and these protections and programs are no longer concentrated in certain regions of the country like the West and Northeast.”

The victory in North Dakota is something of a surprise as no polling was done on the measure.

The Florida amendment has the potential to be one of the more permissive medical marijuana regimes in the nation. In addition to diseases like HIV, cancer and PTSD, the measure also allows doctors to recommend medical pot for “other debilitating medical conditions of the same kind or class as or comparable to those enumerated, and for which a physician believes that the medical use of marijuana would likely outweigh the potential health risks for a patient.” While the 2014 measure allowed doctors to prescribe marijuana for any illness they believed it would be useful for, the new measure requires they show the illness is severe — though the wording gives physicians considerable leeway in determining which conditions would meet those criteria.

The medical pot measure in North Dakota allows doctors to recommend the drug for a number of severe medical conditions.

With the passage of Amendment 2, Florida will become the first southern state to enact a robust medical marijuana regime. Medical marijuana is already legal in 25 other states and the District.

“Better late than never,” said Ethan Nadelmann, executive director of the drug reform group Drug Policy Alliance, in a statement. “Most states outside the South already have legal medical marijuana, but the overwhelming victory today in Florida is likely to accelerate the momentum for reform throughout the region.”

• Christopher Ingraham writes about politics, drug policy and all things data for The Washington Post. He previously worked at the Brookings Institution and the Pew Research Center.

__________________________________________________________________________

Read more on this topic:

 • Where legal weed will likely win today — and where it probably won't

 • A casino magnate is spending millions to fight legal marijuana in three states

 • One striking chart shows why pharma companies are fighting legal marijuana

 • Legal marijuana is finally doing what the drug war couldn't

https://www.washingtonpost.com/news/wonk/wp/2016/11/08/medical-marijuana-sails-to-victory-in-florida

[Kiwithrottlejockey]

from The Los Angeles Times....

California scrambles to implement new recreational pot law

By PATRICK McGREEVY | 3:35PM PST - Wednesday, November 09, 2016


Krystal Xiques smokes marijuana at a rally in support of Proposition 64 at Sparc Dispensary on Tuesday in San Francisco.
 — Photograph: Marcio Jose Sanchez/Associated Press.

SACRAMENTO — Passage of marijuana-legalization initiatives in California and other states this week has given momentum to a national movement to decriminalize pot, but that could change with the election of Republican Donald Trump as president, activists said on Wednesday as state officials scrambled to make the new rules work.

The cannabis industry also took stock of the massive market California represents, while police agencies, prosecutors, state regulators and tax collectors took steps on the day after the election to accommodate the new law.

Proposition 64, which allows California adults to possess, transport and buy up to an ounce of marijuana, won passage with 56% of the vote.

Similar ballot measures were also approved on Tuesday in Massachusetts and Nevada, and one is ahead in Maine, although that one may face a recount. Arizona was the only state to reject an initiative that would have allowed possession of recreational marijuana. Florida, North Dakota and Arkansas approved medical marijuana initiatives.

“It was really a remarkable set of victories last night,” said Ethan Nadelmann, executive director of the Drug Policy Alliance, in a conference call with reporters. “There is a massive sense of momentum in this regard.”

Recreational use had been approved in previous years in Alaska, Oregon, Washington and Colorado.

Lynne Lyman, California state director for the group, noted that 40 million people now have access to legal recreational marijuana.

“We did something really significant last night in California,” she said.

Kevin Sabet, president of the opposition group Smart Approaches to Marijuana Action, said it was no surprise that “deep-pocketed pro-marijuana investors prevailed in California.”

But he held out hope that the new Trump administration would change federal policies that have encouraged states to adopt legalization laws.

“We're really in a whole new unknown world here,” Sabet said.

Trump said during the campaign that he would respect states that adopt their own marijuana laws, but some in his inner circle, including former New York Mayor Rudy Giuliani, have pushed for tough enforcement of drug laws in the past, Nadelmann said. One concern is that Trump might make Giuliani attorney general, which oversees drug enforcement, the activists said.

“What gives me real concern is the election of Donald Trump,” he added. “Donald Trump is totally unpredictable on this issue.”

California Lieutenant Governor Gavin Newsom was less concerned.

“I don't see any issues if the president-elect is consistent with his rhetoric from the campaign trail that established a framework of supporting states' rights,” Newsom told reporters on Wednesday.

One issue supporters think might pressure the federal government to ease restrictions on marijuana is its potential economic value and the taxes it would produce.

A new study released on Wednesday found the increase in the country's marijuana market with California on board is staggering, compared to the next largest market in Washington state.

The smaller state is expected to have total sales of medical and non-medical marijuana of more than $2 billion by 2020, according to a study by New Frontier Data, a data analytics group, in partnership with Arcview Market Research.

In comparison, California's market is expected to reach $7.6 billion by 2020, according to the study.

The growth of markets in states that previously approved marijuana was strong, said Troy Dayton, chief executive of Arcview Group. “Now with these decisive ballot victories for legalization, growth will be off the charts,” he said.

Wednesday also saw a flurry of activity by state and local agencies that have to implement aspects of the new Adult Use of Marijuana Act.

The Los Angeles County district attorney’s office issued a 14-page memo to its prosecutors outlining the new ways it will handle marijuana cases as well as filings by those who want convictions for marijuana cleared from their records.

The ballot measure means numerous marijuana offenses have been decriminalized or reclassified, according to Chief Deputy District Attorney John K. Spillane.

“As a result, pending felony cases where all the charges have been reduced to misdemeanors will be transferred to the appropriate city prosecutor's office unless the office regularly handles the misdemeanors for that area,” he wrote to his field attorneys.

In addition, the California Highway Patrol has launched expanded training of its field officers on how to identify when a motorist using marijuana is impaired, Assistant Chief Omar Watson said on Wednesday.

“The main thing we are going to do now that the law has passed is to really look at our training, to make sure our officers can more acutely know what the objective symptoms are when it comes to someone who may be under the influence of marijuana,” Watson said.

He also said a public education campaign will be launched against drugged driving.

The Los Angeles County Sheriffs' Department also plans to educate its deputies about how the new law affects the handling of drug cases, according to Captain Jeffrey Scroggin.

He noted that the ballot measure immediately legalizes possession of an ounce of marijuana for recreational use, but it cannot legally be sold until the state begins licensing pot shops — and the state has until January 1st, 2018, to begin issuing permits.

A newly named Bureau of Marijuana Control has already begun developing regulations for deciding how to issue licenses for medical marijuana dispensaries and will expand to include pot shops selling recreational marijuana, according to Lori Ajax, head of the agency.

“Although meeting the January 1st, 2018, implementation date will be challenging, we have already made great progress with medical cannabis regulations that will help us reach this new goal,” Ajax said on Wednesday.

State lawmakers said they are already working on the possibility of allowing interim sales licenses for medical marijuana dispensaries until the new state licenses are issued.

The state also needs to find a system for handling the hundreds of millions of dollars generated by the marijuana industry in California given that federally regulated banks will not accept drug proceeds, said Fiona Ma, chairwoman of the state Board of Equalization.

In addition to pot shops having difficulty handling their profits, the state faces a burden accepting up to $1 billion in annual taxes in cash.

“We are going to have to figure out the cash issue and how we are going to accept the cash,” Ma said.

One idea is to have a tax official stationed at branches of Bank of America, which handles tax proceeds, so the official can accept cash payment of taxes and then deposit the money as state revenue.

The results of a handful of other ballot measures were not called until early on Wednesday, when the Associated Press determined voters had approved a $9-billion school construction bond, but rejected three other measures: Proposition 60, which would have required the use of condoms in adult films; Proposition 62, a repeal of the death penalty; and Proposition 61, a prescription drug pricing measure fiercely opposed by the pharmaceutical industry.

• Los Angeles Times staff writer Christine Mai-Duc contributed to this report.

__________________________________________________________________________

Read more on this topic:

 • Before Proposition 64, simple possession of marijuana was already decriminalized

 • Younger voters overwhelmingly favor marijuana measure, which is likely to pass, poll finds

 • Proposition 64 would legalize recreational use of marijuana though it's illegal under federal law. How will that work?

http://www.latimes.com/politics/la-pol-ca-marijuana-legalized-implementation-snap-20161109-story.html

[Kiwithrottlejockey]

from The Washington Post....

Legal pot won big at the ballot box last week.
Now the real challenges start.

The new political landscape is just one of the issues that will
roil newly legal recreational and medical marijuana use.

By BILL KILBY | 6:00AM EST - Friday, November 18, 2016


Photograph: Elaine Thompson/Associated Press.

ELECTION DAY was a blowout for the cause of legal marijuana. Ballot measures legalizing medical or recreational cannabis use passed for the first time in seven states, with a defeat in Arizona the only setback for activists. But, as the experiences of other legal-marijuana states show, the thorniest debates are just starting. How should the trade be regulated? Who will benefit financially? How will the federal government act? These questions and others will roil the states for years to come.

The presidential and congressional election results have already put some of these measures in peril. Activists knew that an overwhelming show of support for marijuana ballot initiatives could be interpreted as a mandate for lawmakers to reconsider the federal prohibition on the plant. (President Obama added to these hopes by saying that if just five of these states decided to allow a form of cannabis use, that would mean that “a fifth of the country [is] operating under one set of laws, and four-fifths in another…. That is not going to be tenable.”)

The new political landscape, however — with President Donald Trump in office alongside a Republican-dominated House and Senate — signals that, despite a groundswell of popular support for marijuana legalization and its growing geographic footprint in America, ending the plant's federal prohibition is unlikely to be a legislative or executive priority. Trump's prospective federal law enforcement appointments (such as early-but-now-unlikely contender Chris Christie, New Jersey's governor, who promised in the Republican primary race that he'd terminate legal marijuana in all 50 states; or Senator Jeff Sessions (Alabama), who's said that “good people don't smoke marijuana” and that he thought the Ku Klux Klan was “okay until I found out they smoked pot”) don't suggest an extension of the Obama administration's noninterference policy. Journalist Tobias Coughlin-Bogue also raises the disturbing possibility that an anti-immigration attorney general might not disrupt state cannabis initiatives entirely, but could selectively enforce federal drug laws against immigrants and people of color in the cannabis industry.

But even if appointed officials honor Trump's professed respect for states' rights, legalization is just the start of a protracted dialogue over how to craft cannabis policy. States that legalized marijuana earlier have contended with unanticipated consequences as well as social and legal disputes over the rules of a newly sanctioned industry.

Take Pueblo, Colorado, which became the state’s second-largest hub of marijuana production after legalization in 2012. The city voted on two measures in this election, both proposing local bans on the cannabis industry. Proponents argued that legalization has attracted a migration of homeless persons from neighboring states, overburdening social services. The measures, in a town where the new industry has yielded thousands of jobs, were soundly rejected. But other cities, such as Los Angeles, are now studying the link between the availability of cannabis and the movements of homeless people, wondering whether to use the tax revenue from cannabis to expand homeless services or just leave them as public costs that other taxpayers are irritated about subsidizing.

In California, more than 50 municipalities that correctly anticipated the passage of Proposition 64 (which legalizes and regulates “adult use” cannabis in the state) also drafted ballot measures to impose local taxes on pot, all but one of which passed. While tax revenue has helped sell skeptics on the benefits of legalization, if taxes are too severe, they risk driving consumers back to underground suppliers. Proposition 64's proposed statewide tax was controversial: Dale Gieringer, director of California NORML, a pro-pot lobbying group, called it “inordinately high” and predicted that it would “encourage a lot of black-market activity for the foreseeable future.” Steep local taxes could compound this problem, as cities in California passed levies ranging from 3 to 20 percent, which, on top of the state tax, means that for some the cost of medical marijuana will rise by 27 percent.

In Montana, where voters originally approved medical marijuana in 2004, voters chose to reform the law this year after a Republican-controlled legislature repealed the original act and replaced it with a far more limited version in 2011. While state Democrats at the time agreed that the original program was too permissive and sponsored the replacement, Republicans added restrictive provisions such as a rule limiting medical marijuana providers to three patients each, suddenly leaving 93 percent of registered patients without any legal means of procuring their medication. The new program voters passed this month is eventually expected to restore access for those temporarily dislocated from a legal supplier.

Aside from the legislative and social growing pains of legal pot, municipalities have ethical issues to consider — namely, who stands to benefit from these new laws. California, recognizing that people of color were most affected by racially biased enforcement of cannabis prohibition, made history with its answer: It's the first legalization initiative to allow drug offenders to participate in the sector from the start, as well as to include reparations for communities torn apart by drug policy. The pro-64 campaign explicitly argued that it's unethical to permanently disenfranchise previous offenders for an act that a majority of voters now deem acceptable. Relatedly, Maryland's Legislative Black Caucus has raised concerns about the fairness and diversity of license distribution for that state's developing medical marijuana program.

As these cases demonstrate, legalization often raises surprising social and economic complications that can elicit new resistance. Cannabis consumers and others in legalized communities have good reason to pay attention to these challenges, as they will probably be called on to vote on cannabis regulations again as the industry matures and new concerns crop up. Cases like Pueblo and Montana serve as reminders that policy regression can be as easy as progress.

It's also important for the voting public not to merely settle for marijuana legalization as presented, but to put political pressure on their representatives to ensure that cannabis policy mitigates potentially harmful outcomes such as burdensome taxation, unequal opportunity in the industry and disruption to consumers’ medical needs. Given the possibility that state legalization projects could be subject to federal interference (or even prosecution of participants), citizens may need to turn up the heat on their lawmakers to convince them that access to legal cannabis, given the diversity of states now supporting its medical or recreational use, is finally a bipartisan value.

• Bill Kilby is a writer and journalist based in Los Angeles.

https://www.washingtonpost.com/posteverything/wp/2016/11/18/legal-pot-won-big-at-the-ballot-box-last-week-now-the-real-challenges-start

[Kiwithrottlejockey]

from the Los Angeles Times....

Trump administration signals a possible
crackdown on states over marijuana

By EVAN HALPER and PATRICK McGREEVY | 6:05PM PST - Thursday, February 23, 2017


Legal marijuana grown in Los Angeles County. — Photograph: Los Angeles Times.

THE White House on Thursday put states that have legalized recreational-use of marijuana on notice that federal law enforcement agents could be targeting them soon.

It was the clearest warning yet that the Trump administration may move to disrupt the marijuana trade in the eight states, including California, that have legalized the recreational use of pot.

White House Press Secretary Sean Spicer told reporters that the administration had no plans to continue the permissive approach of the Obama administration and that it viewed recreational marijuana use as a flagrant violation of federal law.

Spicer's statement that the Department of Justice could initiate enforcement actions in states that have legalized recreational pot alarmed the multibillion-dollar marijuana industry and set up the administration for yet another confrontation with liberal states.

Spicer said recreational marijuana was a scourge, likening its widespread use to the opioid addiction epidemic — an incendiary charge that many medical experts would dispute. But the comments intensified concerns that the robust recreational marijuana trade that has been brought out into the open in recent years — generating hundreds of millions of dollars of tax revenue — could soon be disrupted by federal agents.

“When you see something like the opioid addiction crisis blossoming around so many states … the last thing we should be doing is encouraging people,” Spicer told reporters. “There is still a federal law we need to abide by in terms of when it comes to recreational marijuana and other drugs of that nature.”

Asked whether states that have legalized recreational use could be targeted by federal actions, Spicer said, “I do believe that you'll see greater enforcement.” He said that while federal law prohibits raids of medical marijuana operations, “that's very different than the recreational use, which is something the Department of Justice, I think, will be further looking into.”

It has been years since the Drug Enforcement Administration sent agents on busts of pot businesses operating legally under state laws. The Obama administration issued an administrative policy putting a stop to such federal raids, even as it continued to classify the drug as more dangerous than cocaine. Congress further reassured marijuana users in 2014 by banning the DEA from using federal funds to go after medical marijuana operations operating legally under state laws.

To many, the legal recreational pot trade in America has grown so large, routine and socially acceptable that it has become too big to jail.

But the marijuana industry has been on edge since Trump's election. While the president's position on the drug has been murky, his appointment of former Senator Jeff Sessions as U.S. attorney general rattled dispensary owners and growers. Sessions is a longtime crusader in the war on drugs, as is Vice President Mike Pence.

“It looks like the first shoe is dropping as expected,” said Ethan Nadelmann, executive director of the Drug Policy Alliance. “Trump was never all that reassuring on the issue of marijuana legalization.”

How far the administration would go in provoking states that have legalized pot is unclear. The options range from largely symbolic gestures such as cracking down on the illegal transportation of marijuana between states or initiating a few seizures from dispensaries, to filing injunctions seeking to nullify state legalization laws.

Any such enforcement brings political risk, and could undermine Trump's positioning as a champion of states' rights. Spicer's announcement comes only days after the formation in the House of the first Cannabis Caucus. The founding members are two Democrats and two Republicans, a reminder of the bipartisan appeal of the issue.

“The federal government should stay out of this. Period,” Representative Don Young (Republican-Alaska), one of the caucus founders, said as it was launched last week. “I am happy to say that we will butt heads with the attorney general when we have to. We will do our job.” Alaska, a deeply Republican state, is among those that have recently legalized recreational use.

The Trump administration positioned itself to go after recreational pot on the same day a new Quinnipiac poll showed 71% of Americans surveyed are opposed to the kind of enforcement action Spicer suggested is coming. The same poll found 59% of Americans support full legalization of marijuana.

“We have hoped and still hope that the federal government will respect states' rights in the same manner they have on several other issues,” said Derek Peterson, chief executive of the Irvine-based marijuana firm Terra Tech. “The economic impact, job creation and tax collection associated with both medical and recreational legalization have been tremendous throughout the country.”

But he said states should start preparing to fight the administration in court.

“We hope that the states make a point of defending their independence in regards to this and protect their constituents,” he said.

“I took an oath to enforce the laws that California has passed,” California Attorney General Xavier Becerra said in a statement on Thursday. “If there is action from the federal government on this subject, I will respond in an appropriate way to protect the interests of California.”

Some, however, take a different view.

"The current situation is unsustainable,” said Kevin Sabet, the president of Smart Approaches to Marijuana, a group opposed to legalization. “This isn't an issue about states' rights. It's an issue of public health and safety for communities.”

• Evan Halper reported from Washington and Patrick McGreevy reported from Sacramento.

• Evan Halper writes about a broad range of policy issues out of Washington D.C., with particular emphasis on how Washington regulates, agitates and very often miscalculates in its dealings with California. Before heading east, he was the Los Angeles Times bureau chief in Sacramento, where he spent a decade untangling California's epic budget mess and political dysfunction.

• Patrick McGreevy covers the California Legislature out of the Sacramento bureau. Since joining the Los Angeles Times in 1998, he has worked in the City Hall and San Fernando Valley bureaus, writing about subjects including Valley secession, LAPD reform and city government during the administrations of Mayors Richard Riordan, James Hahn and Antonio Villaraigosa. He is a native of San Diego and a graduate of San Jose State University.

http://www.latimes.com/politics/la-na-pol-trump-marijuana-20170223-story.html

[Kiwithrottlejockey]

from the Los Angeles Times....

California officials and the marijuana industry
prepare to fight a federal crackdown

By PATRICK McGREEVY | 12:05AM PST - Saturday, February 25, 2017


Patrons shop at Bud & Bloom, a Santa Ana marijuana dispensary. — Photograph: Allen J. Schaben/Los Angeles Times.

WARNED of a possible federal crackdown on marijuana, California elected officials and cannabis industry leaders said on Friday they were preparing for a potential showdown in the courts and Congress to protect the legalization measure approved by state voters in November.

The flashpoint that set off a scramble in California was a news conference during Thursday at which White House Press Secretary Sean Spicer told reporters that the administration had no plans to continue the Obama administration's permissive approach in states that have legalized marijuana for recreational use.

“I do believe that you'll see greater enforcement,” he said, adding that the administration would continue to allow states to regulate the sale of marijuana for medical use.

The latest development could force California officials and marijuana industry leaders into an unusual alliance against the federal government, with billions of dollars in profits for businesses and taxes for state coffers at stake.

The state agency responsible for drafting regulations said on Friday it was going ahead with its plans to start issuing licenses to growers and sellers in January.

“Until we see any sort of formal plan from the federal government, it's full speed ahead for us,” said Alex Traverso, a spokesman for the California Bureau of Medical Cannabis Regulation.

In Congress, Representative Dana Rohrabacher (Republican-Costa Mesa) plans to introduce legislation that could blunt Spicer's threat by preventing the Department of Justice from enforcing federal laws against the recreational use of marijuana in states that have legalized it, a spokesman said on Friday.

And industry officials warn that any federal crackdown in California and other states will result in many growers and sellers continuing to operate, but on the black market.

California Attorney General Xavier Becerra says he is ready to safeguard the rights of the 56% of voters who approved Proposition 64, which allows California adults to possess, transport and buy up to an ounce of marijuana for recreational use.

“I took an oath to enforce the laws that California has passed,” Becerra said in a statement on Thursday after Spicer's comments. “If there is action from the federal government on this subject, I will respond in an appropriate way to protect the interests of California.”

State lawmakers also say California should do what it can to preserve Proposition 64.

“We will support and honor the laws that California voters have democratically enacted,” said Assemblyman Rob Bonta (Democrat-Oakland), an author of legislation creating the licensing system for medical marijuana dispensaries.

Becerra would likely be joined in any defense of the state's marijuana policy by attorneys general in other parts of the country. Recreational use has also been legalized in Washington state, Colorado, Oregon, Alaska, Maine, Massachusetts and Nevada, home to a combined 68 million Americans.

Washington Attorney General Bob Ferguson, who has worked with Becerra on opposing President Trump's travel ban, said he and Democratic Governor Jay Inslee last week asked for a meeting with U.S. Attorney General Jeff Sessions to discuss how the recreational marijuana use system is working in their state.

California Lietenant Governor Gavin Newsom, a leading supporter of Proposition 64, took a similar approach, sending a letter on Friday to Trump urging him not to carry through with threats to launch a federal enforcement effort.

“I urge you and your administration to work in partnership with California and the other … states that have legalized recreational marijuana for adult use in a way that will let us enforce our state laws that protect the public and our children, while targeting the bad actors,” the Democrat wrote.

If the Justice Department starts arresting licensed marijuana sellers, the multibillion-dollar industry would join forces with the states that issue permits to challenge the action in court, said Amy Margolis, an attorney whose law firm has more than 200 clients in the marijuana industry, including businesses in California.

“This industry is so mature and it's so far along that I have no doubt that if the Department of Justice started true enforcement actions against cannabis businesses, that they would go to court,” Margolis said. “I see joint actions between the states and the industry hoping to prevent those type of actions.”

Margolis would argue that it is a states' rights issue.

“The argument would be that this is a situation where the states have the right to regulate and tax an industry the way they want,” she said, adding that states are gaining tax revenue to pay for government programs.

Although federal law does not outline a medicinal use for marijuana, Trump administration officials have made public statements indicating they recognize that such a benefit exists, which could help the industry in a potential court case, Margolis said.

However, the states may find their hands tied legally if they try to keep federal agents from raiding and shutting down marijuana growing and sales operations, according to Adam Winkler, a professor at UCLA School of Law.

“I imagine that California will mount a legal challenge to any crackdown on recreational marijuana,” Winkler said. “Yet there is not much California can do. Federal law is supreme over conflicting state law. Federal agents are entitled to enforce federal law anywhere in the country, including California.”

He said there are limits to federal power, but the courts have held that the federal government does have the authority to enforce federal drug laws.

Aaron Herzberg, an attorney for the industry, agreed that the state would face a tough fight. He cited the 2005 case Gonzales versus Raich, in which the U.S. Supreme Court found that under the Commerce Clause of the U.S. Constitution, Congress may criminalize the production and use of homegrown marijuana even if states approve its use for medical purposes.

“Let's face it: If the federal government wants to shut down recreational marijuana they could quite easily accomplish it using federal law enforcement and taxation tools,” Herzberg said.

Others say one basis for legal action would be an argument that enforcing laws against marijuana would damage states that have put regulations in place and are depending on hundreds of millions of dollars in taxes to pay for government programs.

States are too far down the path of regulating, licensing and taxing those who are making big investments in the sanctioned marijuana industry to pull the rug out now, said Richard Miadich, an attorney who co-wrote Proposition 64.

“Given the strict regulatory structure set forth in Proposition 64, that medical and adult-use regulations are being developed in concert, and that public opinion is squarely on the side of states' rights on this issue, I think it is impractical for the federal government to reverse course now,” he said. “Not to mention the potential for great harm to individual states.”

Supporters of Proposition 64 say there is also a potential political solution.

In recent years, Rohrabacher and Representative Sam Farr (Democrat-Carmel) won congressional approval of a rider to the federal budget that prohibited federal funds from being used to prosecute medical marijuana businesses that are in compliance with state laws.

Rohrabacher plans to introduce legislation that would expand the protection to businesses that comply with state laws allowing the growing and sale of marijuana for recreational use, according to spokesman Ken Grubbs.

The congressman is planning the legislation “because recreational use is an issue of individual freedom and should be dealt with legally according to the principle of federalism, a bedrock conservative belief,” Grubbs said.

Representative Ted Lieu (Democrat-Torrance) is also “reviewing options to counteract whatever the Trump Administration's plans” are for state marijuana laws, said Lieu senior advisor Jack d'Annibale.

Another option, though a long shot, would be for Congress to attempt to change the federal Controlled Substances Act to decriminalize the use of marijuana nationally.

Herzberg said reinstituting federal raids would be “a major setback for the industry.”

But the state could still go ahead with a licensing system for medical marijuana growing and sales in spite of a federal crackdown on recreational use, according to Hezekiah Allen, head of the California Growers Association.

“A vast majority of California growers and cannabis business owners would choose to participate only in the medical marketplace if given the option, and some would choose to avoid licensure entirely if they were unable to distinguish themselves from adult-use businesses,” Allen said.

Because Spicer did not provide details on what an enforcement effort might look like, many in the industry hope it will focus on the illegal exporting of marijuana to other states, leaving alone state-licensed firms that grow and sell pot.

“The biggest crackdown we may see is on the increase of cannabis being illegally exported out of recreational states,” said Nate Bradley, executive director of the California Cannabis Industry Association.

State Senator Mike McGuire (Democrat-San Rafael) said any change in federal enforcement policy on states that have legalized recreational use would be misguided.

“You can't put the genie back into the bottle — marijuana regulation and enforcement can't and shouldn't go backwards,” he said.

• Patrick McGreevy covers the California Legislature out of the Sacramento bureau. Since joining the Los Angeles Times in 1998, he has worked in the City Hall and San Fernando Valley bureaus, writing about subjects including Valley secession, LAPD reform and city government during the administrations of Mayors Richard Riordan, James Hahn and Antonio Villaraigosa. He is a native of San Diego and a graduate of San Jose State University.

__________________________________________________________________________

Read more on this topic:

 • Trump administration signals a possible crackdown on states over marijuana

 • Lieutenant Governor Gavin Newsom asks Trump for co-operation with California on marijuana regulation

 • Cities and counties tell legislators they're struggling to keep up with the legalized marijuana industry

http://www.latimes.com/politics/la-la-pol-ca-federal-pot-crackdown-response-20170225-story.html

[aDjUsToR]

Now before I write anything, keep in mind I believe alcohol is a very bad drug. A lot of pain for very low quality "fun".

And on the subject of Marijuana, it *appears* to me Marijuana may be a better drug if
one wants some chemical relaxation/fun, HOWEVER, *ONLY* if used by mature adults, and *ONLY* if used
very sparingly (a moderate dose of THC  at the maximum, and at the MOST once a week and at least
48 hours before commencing work, and as long
as it is not smoked by combustion).

It is called "Dope" for a reason. Smoking it more than the above will make you dopey, and/or weird/crazy/dumb. Over use is also
commonly associated with depression and anxiety.

Anyone with a serious mental illness should stay away from it (and ANY
mind altering drug).


PS edited for better clarity of wording.

[Im2Sexy4MyPants]

Anyone with a serious mental illness should stay away from it (and ANY
mind altering drug).

that rules out ktj then lmao

[Kiwithrottlejockey]

The only mentally ill people around here are those gullible clowns who are so stupid that they believe the bullshit vomiting from Donald J. Trump's mouth.

[Kiwithrottlejockey]

from the Los Angeles Times....

Why some pot businesses hide their cash — and others
truck it straight to a federal vault

By JAMES RUFUS KOREN | 3:00AM PDT - Friday, July 07, 2017


Donnie Anderson is one of the owners of Medex, a medical marijuana dispensary in South Los Angeles.
 — Photograph: Luis Sinco/Los Angeles Times.

SLIP a fresh $20 bill under the bulletproof teller window of Donnie Anderson's Medex marijuana dispensary on Century Boulevard — perhaps for a gram of cannabis or some THC-infused toffees — and the legal tender is transformed into something else: drug money.

Though the transaction is legal in California, under federal law that bill is not much different from the contents of a drug cartel's safe — cash that most banks won't touch.

So how is Anderson supposed to pay his employees, suppliers or business taxes? He deposits cash, in drips and drabs, into an account held by a limited liability company that his bank thinks is a property management firm.

“The bank doesn't know what we do,” he said.

If this sounds like money laundering, you're not far off.

Yet consider this: That same $20 exchanged at Canndescent, another cannabis company, takes a direct and transparent route into the financial system.

When the marijuana cultivator sells its product to a dispensary, one armored car drops off the pot and another picks up the cash payment — and then heads to a downtown Los Angeles branch of the Federal Reserve Bank.

There the cash is deposited into the account of a local credit union, one that's eager to do business with Canndescent.

“After all the horror stories I've heard, it does seem like a little bit of magic,” said Tom DiGiovanni, Canndescent's chief financial officer.

Indeed, though the same laws apply to Anderson's dispensary and Canndescent's Desert Hot Springs farm, the world of cannabis banking is so full of contradictions that one business can truck money to a federal facility while the other is left to play a high-stakes game of hide-and-seek with its cash.

“It's the early stages of the Wild West,” said California Treasurer John Chiang, who is leading an effort to reform cannabis banking, a problem dating back to 1996 when California legalized medical marijuana.

With recreational use set to become legal next year under Proposition 64, cannabis sales in the state are expected to top $7.5 billion in 2020, up from about $3.3 billion last year, according to data provider New Frontier and cannabis investor network Arcview Group.

But while Proposition 64 broadened the legal use of pot, it did nothing to relax banking regulations.

“It left significant questions unresolved,” Chiang said. “How do you handle the taxation of cannabis dollars and the banking of billions of dollars of transactions that are going to take place here in California?”

Last year, Chiang created a group of cannabis and banking industry trade groups, attorneys, regulators and others, trying to figure out how to bring the cannabis industry into the financial mainstream. But it's a vexing challenge, and one that cannot be solved by the state alone.

Marijuana is legal for medical use in 29 states and for recreational use in eight, yet the federal Controlled Substances Act lists it alongside heroin and LSD as both dangerous and having no accepted medical use.

And for banks, federal laws are paramount.

Banks and credit unions can guarantee deposits because they have federal deposit insurance. They rely on Federal Reserve systems to make wire transfers, handle electronic payments and process checks. And they all answer to at least one federal regulator.

Banks and credit unions also are required to tell federal authorities if they suspect that their customers might be engaged in illegal activity. And when it comes to following those rules, the stakes are high.

“The FDIC could step in and shut down a bank, and it can do that with very little notice,” said Julie Hill, a law professor at the University of Alabama and former finance industry attorney who has studied cannabis banking. “Nobody's ever gotten their bank brought back to life after it's been closed by regulators.”

Because of that, many banks won't even take the risk.

“From a federal level, it's illegal,” Jim Brush, chief executive of Summit State Bank in Santa Rosa, told Chiang's working group in May. “It really doesn't matter what California does.”


A medical marijuana patient pays for product through a teller window at Medex, a dispensry on Century Boulevard
in South Los Angeles. — Photograph: Luis Sinco/Los Angeles Times.


Medical marijuana patients Daquan Giles, 23, left, and Nana Whitfield, 21, check out products at Medex on Century Boulevard.
 — Photograph: Luis Sinco/Los Angeles Times.

Still, federal officials have cracked open the door for banks and credit unions.

In 2013, the Justice Department said it would focus its marijuana-enforcement efforts on preventing sales to minors, interstate trafficking and a handful of other crimes.

The following year, the Financial Crimes Enforcement Network, or FinCEN, part of the U.S. Treasury Department, released guidelines for financial institutions that want to work with marijuana companies. They require additional reporting and demand that banks monitor companies for activities that remain Justice Department priorities.

FinCEN reported that 368 banks and credit unions were serving the industry in March, up from fewer than 300 at the beginning of 2016. But that's a tiny fraction of the nation's nearly 12,000 banks and credit unions.

Hill said so few institutions are playing along because FinCEN's guidelines don't offer clear legal protection. And some banks don't want to be in the uncomfortable position of policing cannabis companies.

“How would you know a business isn't selling to minors unless you're in the store all the time?” Hill said.

What's more, with a new administration in the White House and avowed marijuana opponent Jeff Sessions running the Justice Department, it's not clear whether the the feds will take a harder line on pot.

With many cannabis companies unable to get bank accounts, they are often left to deal in cash, which is inconvenient and dangerous.

Take Jerred Kiloh, owner of Higher Path Collective. His Sherman Oaks dispensary had sales of about $4 million last year, so he owed more than $200,000 in taxes to Los Angeles alone, he told Chiang's group.

Imagine, Kiloh said, carrying that much cash.

“Right now, at the downtown office of finance, there's a six-story parking structure 500 yards away,” he said. “I have to walk through what is essentially a homeless encampment with a duffel bag full of cash, walk across the street, go through security and then sometimes stand in line.”

Kyle Kazan, a former Torrance police officer who runs a firm that invests in cannabis growers and retailers, said the lack of access to banking poses big safety risks.

“Real lives are in danger because there's so much cash in play here,” Kazan said.

In one infamous case from 2012, an Orange County dispensary owner was kidnapped, tortured and had his penis cut off by assailants who thought that the businessman was burying cash in the desert outside Palm Springs.

Burying cash might seem ridiculous in the 21st century, but it's not unheard of in the cannabis industry.

“We get lots of cash, and sometimes it has been washed — actually washed — because it had been buried out in the backyard,” said John Bartholomew, treasurer-tax collector for marijuana-rich Humboldt County, speaking to Chiang's group last year.

Cash payments are a hassle for governments too. Todd Bouey, L.A.'s assistant director of finance, told Chiang's group that the city had to buy new currency-counting machines because office workers were spending so much time counting and recounting cash tax payments from marijuana businesses.

“No one comes in with the type of cash they come in with,” Bouey said. “ It was taking hours to get through one deposit.”

Still, Bouey said that only about 20% of marijuana businesses that pay taxes are doing so in cash. Most pay with checks, indicating that they have bank accounts — either openly or on the sly.

Even though they are few, and mostly small, there are banks and credit unions that are hungry for customers and willing to quietly open accounts for cannabis businesses.

The Los Angeles-area credit union serving Canndescent has been losing traditional members, and hopes that by serving young, growing companies in a booming industry, it will be able to offer checking accounts, home loans and auto loans to the companies' employees.

“We'll probably max out at about 200 businesses, and we're basically at capacity,” said an executive, who provided details of the institution's cannabis banking operations on the condition that neither his name nor the institution's be used. “​​​I don't need to get inundated with phone calls.”


Medical marijuana patient Nana Whitfield, 21, looks at samples at Medex. — Photograph: Luis Sinco/Los Angeles Times.


Marijuana in jars at Medex, a dispensary on Century Boulevard in South Los Angeles. — Photograph: Luis Sinco/Los Angeles Times.

Finding a willing institution is just the first challenge. Next, companies have to qualify for an account — and be able to afford it.

At the credit union, cannabis companies have to pay an upfront fee of as much as $10,000 to cover the cost of independent financial audits and criminal background checks for the owners.

The credit union also charges recurring fees to cover the cost of ongoing due diligence and reporting required by FinCEN. For growers, the credit union charges $5,000 a month. For dispensaries, it's $7,500.

“We're verifying that they're not breaking any laws, not evading taxes, not doing anything that could be a legal or ethical violation,” the executive said. “We assume we're going to be investigated at some point by our regulators and maybe by the IRS or the DEA.”

Companies also have to hire the armored car services to take their cash directly to a Federal Reserve Bank branch. “We don't want cash coming to the credit union,” the executive said. “If we did, then we'd have people signing up to rob the place.”

Other businesses that handle lots of cash, such as big-box stores, often have their cash sent directly to the Federal Reserve.

Matthew Schiffgens, a spokesman for the Federal Reserve Bank of San Francisco, said in an email that it's no different for marijuana businesses — with the understanding that the credit union must make sure that its clients are following FinCEN guidelines and other rules.

The National Credit Union Administration, the industry’s insurer and chief regulator, also has taken an agnostic approach to cannabis, telling credit unions to proceed with caution.

“We've said, look, this is your business decision,” spokesman John Fairbanks said. “We expect you are going to analyze the risks of doing business with these companies and take prudent and necessary steps to mitigate that risk.”

To that end, the L.A.-area credit union is not making loans to cannabis businesses. It's easy for the credit union to close down a checking account if it thinks that a business is breaking the rules, but unwinding a loan could be trickier. And if federal authorities go after a business and seize its assets, the credit union might be unable to collect.

Despite the high fees, plenty of companies are signing up for accounts.

Dan Grace, chief executive of Dark Heart Nursery in Oakland, which supplies cannabis plants to dispensaries and commercial growers, figures that two of his company's 50 employees spend all their time on cash management. He said a bank account that would cost him $60,000 a year in fees would more than pay for itself.

“When we have employees handling so much cash, we have to have lots of checks and balances,” said Grace, who is not one of the credit union's clients.

Others, though, balk at the price. Anderson said there's no way it would make sense to pay $7,500 a month for a checking account for his dispensary.

“They're trying to rob the industry,” he said. “They all look at us like cash cows. I'd rather take my chances and do what we've been doing.”

Chiang's working group has focused largely on the problems faced by cannabis businesses because of shaky access to banking, but is now turning to potential solutions.

Hezekiah Allen, executive director of the California Growers Association and a working group member, said one idea that's caught his interest is the creation of a “bankers bank” — some kind of private entity that could do upfront due diligence and compliance work.

“Our members would go through a week or 10-day-long screening process and, if they meet the requirements, they'd be able to open an account with one of a dozen banks,” Allen said.

Nicole Howell Neubert, an attorney who works with cannabis businesses and a member of Chiang's group, said at this point she hopes that the state can simply find a way to make a few more banks and credit unions feel more comfortable.

“Ultimately, it requires a federal fix to address the issue,” she said. “But I think there will be some enterprising, smaller financial institutions that will see this as an opportunity and, I hope, move forward.”

• James Rufus Koren covers banking and finance for the Los Angeles Times. He previously wrote for the Los Angeles Business Journal, where he covered banking, manufacturing and other industries, and for daily newspapers in Southern California and rural Michigan. He was raised in St. Louis and small-town Iowa, headed west to study at the University of Southern California and now lives in Long Beach.

__________________________________________________________________________

Related stories:

 • Legal marijuana could be a $5-billion boon to California's economy

 • Does driving while high create more crashes? Report hints that it's possible.

 • Las Vegas adds a new lure to its repertoire as Nevada legalizes pot. Here come the tourists.

http://www.latimes.com/business/la-fi-cannabis-banking-20170707-story.html