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Trump Treasury Secretary Wants Marijuana Money In Banks

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The Trump administration’s top fiscal official appeared to voice support for letting marijuana businesses store their profits in banks.

“I assure you that we don’t want bags of cash,” Treasury Secretary Steven Mnuchin testified on Tuesday during an appearance before the House Financial Services Committee. “We want to make sure that we can collect our necessary taxes and other things.”

Mnuchin, in a series of responses to questions from lawmakers who raised concerns about the public safety implications of preventing cannabis businesses from accessing banks and forcing them to operate on an all-cash basis, said the Treasury Department is currently considering how to deal with the issue.

In 2014, under the Obama administration, the department’s Financial Crimes Enforcement Network (FinCEN) issued guidance that has allowed banks to open accounts for marijuana growers, processors and retailers without running afoul of federal regulators.

But last month, U.S. Attorney General Jeff Sessions rescinded a broader policy from the former administration that had generally cleared the way for states to implement their own cannabis laws without Justice Department interference. Sessions’ move has led to fears that the Trump administration may tear up the banking memo as well.

Last week, a top Treasury official wrote in a letter to lawmakers that the department is “consulting with law enforcement” about whether to maintain the guidance for depository institutions. Last month, a Mnuchin deputy testified at a Senate hearing that the banking document remains in effect while the administration weighs whether to revoke it.

At the Tuesday hearing, Mnuchin confirmed that the department is “reviewing the existing guidance.” But he clarified that he doesn’t want to rescind it without having an alternate policy in place to address public safety concerns.

“The intent is not to take it down without a replacement that can deal with the current situation,” he said.

Rep. Brad Sherman (D-CA) told Mnuchin that simply deleting the banking memo “would really make it better for armed robbers in my community, because there’d be huge amounts of cash at the local marijuana dispensary.”

Reps. Denny Heck (D-WA) and Ed Perlmutter (D-CO) also raised questions about the issue.

“We specifically haven’t taken it down,” Mnuchin said of the 2014 memo. “We are looking at what Justice has done. And again, as I said, we’re sensitive to the issue of dealing with the public safety issue and also making sure that the IRS and others have ways of collecting taxes without taking in cash.”

In response to comments about pending congressional legislation to address cannabis businesses’ access to financial services, Mnuchin pledged to consult with White House Office of Management and Budget Director Mick Mulvaney, who as a member of Congress previously sponsored a similar bill.

Perlmutter’s legislation on the issue currently has 78 co-sponsors, and a companion Senate version has 14 senators signed on. Bipartisan groups of House and Senate lawmakers have also sent letters to the administration urging that the banking guidance be maintained.

During the hearing, Mnuchin also appeared to confirm a Reuters report that FinCEN was not consulted in advance about Sessions’s decision to change federal marijuana enforcement policy.

“I did not participate in the attorney general’s decision and what he did, but we are consulting with them now,” he said. “We do want to find a solution to make sure that businesses that have large access to cash have a way to get them into a depository institution for it to be safe.”

The FinCEN policy, which requires financial institutions to regularly file reports on their cannabis customers, was intended to provide clarity and assurances to banks, but many have remained reluctant to work with marijuana businesses because of overarching federal prohibition.

Nonetheless, documents released by FinCEN late last year showed that the number of banks willing to work with the marijuana industry has steadily grown over time, though those figures were collected prior to Sessions’s move to revoke the broader Justice Department guidance.

Prior to his being confirmed by the Senate last year , Mnuchin said in response to written questions from a senator that marijuana businesses’ banking and tax issues are “very important.”

This piece was first published by Forbes.

Marijuana Moment is made possible with support from readers. If you rely on our cannabis advocacy journalism to stay informed, please consider a monthly Patreon pledge.

Tom Angell is the editor of Marijuana Moment. A 20-year veteran in the cannabis law reform movement, he covers the policy and politics of marijuana. Separately, he founded the nonprofit Marijuana Majority. Previously he reported for Marijuana.com and MassRoots, and handled media relations and campaigns for Law Enforcement Against Prohibition and Students for Sensible Drug Policy. (Organization citations are for identification only and do not constitute an endorsement or partnership.)

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MedMen Temporarily Closes All Locations And Condemns Looting In Internal Memo

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The national marijuana dispensary chain MedMen has temporarily closed down all of its stores after several of its Los Angeles-based locations were looted over the weekend. While the company strongly condemned the looting, it said it recognizes the tragedies that led up to the incidents and is offering to support its black employees during this time.

Businesses in cities across the country have been impacted by outrage over recent police killings of black Americans. That includes George Floyd, whose death at the hands of a Minneapolis police officer ignited mass protests, some of which have been followed by looting.

In an internal memo to MedMen employees that was obtained by Marijuana Moment, the company said that its locations in downtown Los Angeles, West Hollywood and Beverly Hills “were heavily damaged, as were a number of other businesses, including those in the cannabis community.”

“Effective immediately, we are temporarily closing all stores and the corporate office to protect the safety of our employees,” the memo states. “The safety of everyone in the MedMen family is the most important thing right now, and we are grateful to report that while our stores were damaged, our employees and security guards were unharmed.”

“Our assumption is that all of you know this, but we want to take the time to make it very clear there is a bright line between the peaceful protests yesterday and the criminal activity that followed,” it continues. “We do not know what goes through the mind of those that would promote violence or destruction immediately on the heels of a peaceful protest designed to bring us all closer together.”

But while that language largely contrasts with that of some other impacted marijuana businesses that have more clearly sympathized with people expressing outrage in the face of police killings, MedMen also extended a hand to its black workers and said it appreciates the circumstances that contributed to the situation.

“Regarding the events of the last week, we are heartbroken, outraged and horrified by the tragic events in our country and the continued violence and injustice perpetrated against the Black community. To our Black colleagues, if there is any way we can show up for you during this time, we would encourage you to email [the CEO’s office],” the company said. “In the meantime, we offer our deepest empathy, we are here to listen, we are here to help and we are here to stand with you as a MedMen family in any way we can.”

“To those fighting for social justice, MedMen stands with you. The horrifying treatment of our black colleagues and community must end,” MedMen added in a statement to Marijuana Moment. “Systematic oppression and inequality must end. We are committed to using our platform to help. We will rebuild and come back stronger in a way that makes our communities proud and advances justice and equality.”

A spokesperson said that the company is actively assessing its plan moving forward. While the representative initially suggested to Marijuana Moment that employees would continue to be paid during the temporary shutdown, he later said that the company “will take care of our employees as demonstrated by our response to COVID-19” but could not get into specifics about ongoing financial decisions.

Meanwhile, the rapper Berner, who owns the popular Los Angeles dispensary Cookies, said after his shop was looted that ensuring justice and addressing the problems underlying the protests is more important than the loss of merchandise.

“It’s extremely unfortunate what happened to our store tonight on Melrose. But as a human living in the world we’re living in today, I cannot expect anything less until justice is served,” he said. “We can rebuild our store, but you cannot bring someone back to life.”

Debby Goldsberry, the executive director of the dispensary Magnolia Wellness Oakland, struck a similar tone in a Facebook post about their experience being looted. She said that while the property loss was extensive and will hit the small retailer hard financially, this “story is not about Magnolia Wellness. It’s about this nation, blistering in pain. It’s bubbled up, and can’t be stopped, no matter how much salve we put on it.”

“Our shop can be rebuilt, but the black lives taken by the police, again and again, are gone forever. Simply put, the police are murdering people right before our eyes, and the anger has boiled over. We saw it on camera, watching these men rampage through our space,” she wrote.

“Anger like this is based in injustice. Anger like this is based in facts. Anger like this is based in hundreds of years of oppression, and in never, ever getting a fair shot, no matter what, because the system is set up in a systematic manner that assures you never will,” the post continues. “George Floyd’s horrible death is just one of so many by now that it’s become impossible to track.”

Kris Krane, president of 4Front Ventures, said one of the company’s Mission dispensaries in Chicago was also raided over the weekend.

“Despite the sadness and destruction, my support for the protests and the underlying goal of ending police brutality, systemic law enforcement reform, and societal recognition of the fundamental humanity of people of color in this country remains undeterred,” he said. “I stand with those protesting for human rights and justice, and understand why some feel so disempowered that they have no recourse but rage and violence.”

Cannabis shops from California to Oregon have impacted by looting in recent days.

This story has been updated to include additional commentary on future plans from a MedMen spokesperson

Rapper Who Owns Looted Marijuana Dispensary Says Justice Is More Important Than Business

Photo courtesy of WeedPornDaily.

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Rapper Who Owns Looted Marijuana Dispensary Says Justice Is More Important Than Business

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One marijuana dispensary owner whose business was caught in the chaos stemming from the reaction to rampant police violence over the weekend says he values life and justice over his stolen cannabis merchandise.

Cookies, a well-known dispensary in Los Angeles, was looted during Saturday’s massive protests sparked by the killing of George Floyd. But the brand’s creator and store’s part-owner, the famous rapper-turned-cannabis-entrepreneur Berner, says he is more concerned about the underlying injustices being highlighted by protestors than the damage to his storefront.

A video on Instagram shows the Cookies location on Melrose being broken into, with people jumping the fence, entering the store and stealing products. Police are seen driving by in the clip, but no one appears to have been arrested.

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It’s going down in the streets tonight

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Berner, whose real name is Gilbert Anthony Milam Jr., released a statement shortly after the incident.

The rapper doesn’t condemn the people who broke into the store. Instead, he argues that human life is more valuable than any building.

“It’s extremely unfortunate what happened to our store tonight on Melrose. But as a human living in the world we’re living in today, I cannot expect anything less until justice is served,” Berner said in the video posted to his 1.3 million Instagram followers. “We can rebuild our store, but you cannot bring someone back to life.”

“With that being said, we stand with what is going right now in the world. A statement needed to be made. All I say is, I pray everyone stays safe and protects their family in a time like this,” the rapper said. “How can I worry about a store when there is so much more going on in the world right now? So much hate, so much anger, so much pain, and a lack of justice. Please take care of your families and stay safe.”

There were six armed security guards at the storefront, Berner said, but he told them not to be violent towards protesters. “I don’t want to see anyone die!! I told everyone to stand down,” he posted. “I’m not allowing anyone to die on my watch… all life matters. And money comes and goes…”

Instagram commenters were quick to suggest that insurance money stemming from the theft would be advantageous to Berner. One commenter, Elijah71p, wrote: “Plus that insurance money won’t hurt.”

But Berner said he wasn’t counting on it, replying: “We sell weed. I’m not sure that insurance will honor our business, I haven’t even thought about it. I was focused on preserving life and instructing the armed guards to stand down and not to shoot.”

Another commenter wrote on the post: “Someone had good insurance, lol other wise I’m sure this would sound different.”

“Nah man, the world is a fucked up place,” replied Berner. “This is from the heart homie.”

Cannabis companies have historically had a hard time accessing coverage for things like lost employee wages, property damage and more due to marijuana’s federal classification as a schedule I substance.

Berner started Cookies as a clothing and cannabis brand in the San Francisco Bay Area in 2016. The company has held itself up as an equity success story, opening the Cookies Haight Street location with CEO Shawn Richard under San Francisco’s first social equity license. While some have raised questions about the involvement of white investors and people with political pull helping to win the dispensary’s approval, Berner has maintained that the company is holding true to authentic cannabis culture—one that represents and speaks up for black, indigenous and people of color.

The Cookies brand, well-known for its bright blue packaging, is on sale in eight medical and adult-use markets across the country, including in Its dispensary storefronts in Los Angeles, Santa Ana, San Francisco and Denver.

Cookies isn’t the only dispensary to have been impacted by looting over the weekend. Photos of a ransacked MedMen location in downtown Los Angeles have surfaced, for example.

The company has not issued a statement at the time of publication.

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Oregon Marijuana Sales Spike During Pandemic, But Officials Expect Market To ‘Mellow’

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Amid one of the sharpest economic downturns in state history, Oregon marijuana sales continue to roll along at a healthier-than-normal pace. State budget officials say that shelter-in-place policies and economic stimulus programs have kept marijuana sales “quite strong” during the pandemic so far.

Since March 1, the sales of adult-use marijuana products are up 60 percent compared to a year ago, the state Office of Economic Analysis said in its latest quarterly budget forecast published last week.

“These increases are not only related to the stockpiling consumers did after the sheltering in place policies were enacted,” the report says, “but have continued through April and early May.”

Oregon marijuana sales during COVID-19

In April alone, consumers bought $89 million worth of legal cannabis products—a record amount—thanks in part to what officials described as a “4/20 bump.” While the boost in sales figures are due in part to rising prices, state budget analysts said that “underlying demand is up as well.”

“The increase in sales for other marijuana products, like concentrates, edibles and the like, are due to significant gains in consumer demand as prices are flat or down,” analysts reasoned.

The June 2020 budget forecast estimates that the current increase in marijuana sales will yield an extra $9 million in state tax revenue during the 2019-2021 budget period. It’s a rare bright spot in the overall budget report, which state analysts described as “the largest downward revision to the quarterly forecast that our office has ever had to make.”

Oregon marijuana demand

But even the marijuana sector’s boost may be time limited.

“Expectations are that some of these increases are due to temporary factors like the one-time household recovery rebates, expanded unemployment insurance benefits, and the shelter in place style policies,” the report says. “As the impact of these programs fade in the months ahead, and bars and restaurants reopen to a larger degree, marijuana sales are expected to mellow.”

Demand for marijuana is also expected to fall in coming years due to a lower overall economic outlook, which is projected to reduce Oregon’s population and cut average incomes. “A relatively smaller population indicates fewer potential customers,” the report notes, “and lower total personal income than previously assumed indicates less consumer demand.”

Oregon population forecast

The projected slowdown in sales isn’t expected to make an impact until the next budget period, beginning in 2021. At that point, the forecast says, sales will begin trending down by 5 percent relative to the current period “due to the lower economic outlook” associated with COVID-19.

The pandemic has also changed how Oregonians are making marijuana purchases, the report found, though perhaps not as much as one might expect. The share of sales completed by delivery services more than doubled in recent months, but it remained relatively small, making up just 1.4 percent of total sales. As the Office of Economic Analysis observed, “Consumers still prefer to shop in store.”

Oregon is one of a handful of states looking to legal cannabis sales to help buoy tax revenues. A report published last month by cannabis regulators in Michigan, where legal sales to adults began this past December, forecasts annual marijuana sales in that state to top $3 billion as the market matures. That would mean another 13,500 jobs and roughly $500 million per year in taxes to state coffers. Factoring in the effects on peripheral businesses, the state found, the “total economic impact is estimated to be $7.85 billion with a total impact on employment of 23,700.”

Although tax revenue from cannabis sales will help pad budgets in many legal states, the Oregon report doesn’t mince words: The pandemic’s hit to the state’s economy will be drastic. Oregon’s current recession is “the deepest on record with data going back to 1939,” according to state analysts, and it hit with virtually no warning. “The path looks more like what happens to economic activity during a labor strike or in the aftermath of a natural disaster.”

Oregon incomes over time

For its part, Oregon’s Office of Economic Analysis predicts a relatively swift recovery. “While this recession is extremely severe, it is expected to be shorter in duration than the Great Recession,” analysts wrote. “The economy should return to health by mid-decade.”

New Mexico Governor Says Legalizing Marijuana Would’ve Funded Programs Cut Due To Coronavirus

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