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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But last month, U.S. Attorney General Jeff Sessions rescinded a broader policy from the former administration that had generally cleared the way for states to implement their own cannabis laws without Justice Department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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Arizona Marijuana Tax Revenue Exceeds $20 Million In August, State Reports

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Arizona collected more than $20 million in medical and adult-use marijuana tax revenue in August, data released by the state this week shows.

Medical cannabis taxes were slightly higher at $6,388,816 last month, compared to $4,542,166 collected from the recreational market, according to the Department of Revenue. The state also took in an additional $9,515,016 from the marijuana excise tax.

However, these figures are preliminary and may change, as some businesses could need additional time to send in data.

July’s cannabis tax revenue was slightly higher compared to August, with the state taking in about $400,000 more in the prior month.

While medical cannabis taxes are still outpacing those from the adult-use market, that gap has been generally been narrowing in the months since recreational sales first launched in January. That’s a trend that’s been observed across numerous states after adult-use marijuana is legalized.

However, Arizona’s medical marijuana market is well-established, and some industry experts don’t necessarily expect recreational sales to overtake the medical program for some time.

Overall cannabis tax revenue from January through August totaled $115,701,426, according to the data the Department of Revenue is reporting so far.

Other states are also seeing a windfall in marijuana tax dollars as more markets mature and sales continue to increase.

For example, Maine recreational marijuana sales broke another record in August, exceeding $10 million for the first time since the adult-use market launched in October 2020.

Adult-use cannabis sales in Illinois exceeded $120 million in August, state officials recently reported. It’s the second highest sales record since the state’s recreational market launched last year and the sixth month in a row that sales surpassed $100 million.

Massachusetts marijuana sales have topped $2 billion since the state’s adult-use market launched in late 2018, the Cannabis Control Commission reported last week.

California collected about $817 million in adult-use marijuana tax revenue during the 2020-2021 fiscal year, state officials estimated last month. That’s 55 percent more cannabis earnings for state coffers than was generated in the prior fiscal year.

A recent scientific analysis of sales data in Alaska, Colorado, Oregon and Washington State found that marijuana purchases “have increased more during the COVID-19 pandemic than in the previous two years.”

In July alone, at least three states saw record-breaking sales for recreational cannabis. The same goes for Missouri’s medical marijuana program.

Michigan marijuana sales broke another record in July with more than $171 million in cannabis transactions, according to data from the state’s regulatory body. There were $128 million in adult-use sales and $43 million in medical cannabis purchases.

Throughout the pandemic, many states allowed cannabis retailers to remain open—with governors and regulators in several markets declaring marijuana businesses to be essential services—and some jurisdictions issued emergency rules allowing curbside pickup, delivery services or other more relaxed policies in order to facilitate social distancing.

California Smokable Hemp Bill Heads To Governor, While Measure On Cannabis Use In Hospitals Advances

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Maine Marijuana Sales Broke Another Record In August, Exceeding $10 Million For First Time

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Maine recreational marijuana sales broke another record in August, exceeding $10 million for the first time since the adult-use market launched in October 2020.

The state’s Office of Marijuana Policy reported that the state’s 53 adult-use cannabis shops brought in about $10.2 million in marijuana purchases last month. And that translates into about $1 million in tax revenue for the state, which has a population of just 1.3 million.

By comparison, Maine cannabis sales for recreational consumers amounted to just $1.1 million during the first month of retail sales less than a year ago. That record has been broken each subsequent month.

While August proved to be a record-breaking month for marijuana purchases—with 133,969 sales transactions—it’s only slightly higher compared to July, when the state saw about $9.4 million in adult-use purchases. Those figures don’e include medical cannabis sales, which are tracked separately.

Via Maine Office of Marijuana Policy.

According to the Portland Press Herald, regulators have credited summer tourism for the sales spike.

But in general, states across the U.S. have seen similar trends over recent years. And marijuana sales records have been consistently broken over the past year despite the coronavirus pandemic.

Adult-use cannabis sales in Illinois exceeded $120 million in August, state officials recently reported. It’s the second highest sales record since the state’s recreational market launched last year and the sixth month in a row that sales surpassed $100 million.

Arizona brought in about $21 million in medical and adult-use marijuana tax revenue in July, state officials recently reported on a new webpage that enables people to more easily track how the industry is evolving.

California collected about $817 million in adult-use marijuana tax revenue during the 2020-2021 fiscal year, state officials estimated last month. That’s 55 percent more cannabis earnings for state coffers than was generated in the prior fiscal year.

A recent scientific analysis of sales data in Alaska, Colorado, Oregon and Washington State found that marijuana purchases “have increased more during the COVID-19 pandemic than in the previous two years.”

In July alone, at least three states saw record-breaking sales for recreational cannabis. The same goes for Missouri’s medical marijuana program.

Michigan marijuana sales broke another record in July with more than $171 million in cannabis transactions, according to data from the state’s regulatory body. There were $128 million in adult-use sales and $43 million in medical cannabis purchases.

Throughout the pandemic, many states allowed cannabis retailers to remain open—with governors and regulators in several markets declaring marijuana businesses to be essential services—and some jurisdictions issued emergency rules allowing curbside pickup, delivery services or other more relaxed policies in order to facilitate social distancing.

Marijuana Legalization Doesn’t Lead To Increased Youth Use, American Medical Association Study Finds

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Firm Led By Formerly Anti-Drug GOP Senator Will Lobby For Marijuana Businesses In New York

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A New York-based lobbying firm that’s headed by a former Republican U.S. senator announced on Tuesday that it is entering the marijuana space after the newly inaugurated governor took key steps toward implementing legalization in the state.

Former Sen. Alfonse D’Amato (R-NY) founded Park Strategies in 1999, just after leaving the Senate with an established record of supporting the war on drugs. Now, his firm is getting into the cannabis business, offering services to influence regulations for both marijuana companies and ancillary markets.

“With Governor Kathy Hochul’s prioritizing the cannabis law by making appointments to the cannabis office and governing board so quickly after having taken office tells us New York is serious about growing the cannabis industry in the state, and we are happy to be making our own investment to assure that success,” D’Amato said in a press release.

Joseph Rossi, who is heading the firm’s Cannabis Practice Group, said Park Strategies “has deep roots in the cannabis space,” noting work on state cannabis legislation over the years.

Hochul’s move to make the marijuana regulatory appointments so quickly after replacing former Gov. Andrew Cuomo (D) has been welcome news for advocates and industry stakeholders. Cuomo, who resigned amid a sexual harassment scandal, faced criticism for slow-walking the appointments after signing legalization into law this year.

And evidently, excitement about the cannabis developments in New York isn’t reserved to traditional advocates.

D’Amato wasn’t particularly bullish about marijuana reform during his time in Congress. For example, he introduced a bill and amendment in 1990 that would’ve allowed taxpayers to designate overpayments to fund drug war enforcement.

He also cosponsored an array of anti-drug legislation, including resolutions condemning Mexico over its “failure” to cooperate with the U.S. in “controlling the transport of illegal drugs and controlled substances” and promoting the Reagan-era Red Ribbon Week.

D’Amato also signed onto Sen. Strom Thurmond’s (R-SC) Violent Crime and Drug Enforcement Improvements Act, which would have expanded federal asset forfeiture authorities, made it so juveniles could be transferred to adult court for certain violent or drug-related crimes and established a new office to “plan and coordinate drug enforcement efforts” for the federal government.

At one point in 1986, D’Amato teamed up with then-New York City Mayor Rudy Giuliani for a stunt where they went “undercover” and posed as people attempting to purchase crack cocaine to illustrate the ease of the transaction in the city.

Notably, however, D’Amato was not one of the 35 senators who signed onto a 1998 resolution that expressed support for the federal system of determining “the safety and efficacy of drugs” and criticized “efforts to circumvent this process by legalizing marijuana, and other Schedule I drugs, for medicinal use without valid scientific evidence and the approval of the Food and Drug Administration.”

And his position on cannabis policy has shifted significantly in the years since he left the Senate.

In 2017, D’Amato actually became a senior policy advisor for the pro-legalization Marijuana Policy Project’s New York affiliate.

“Nobody was more anti-drugs than I was,” the former senator wrote in an op-ed for The New York Daily News at the time. “However, as I have learned more about marijuana, particularly medical marijuana, over the last several years, my views—like the views of most Americans—have changed.”

He explained his evolution on the topic in an earlier piece for The Long Island Herald in 2014.

“I know it’s a tough pill to swallow, and if you asked me five years ago if I would ever consider supporting legalizing medical marijuana, I would’ve say, ‘Not a chance,'” he wrote. “But times are changing, and marijuana has become a viable form of alternative medicine for those suffering from many debilitating diseases such as ALS, multiple sclerosis, cancer and others. When traditional medicines fail to offer relief, why not give patients alternatives?”

The overlap between the marijuana industry and politics has become pronounced in recent years as more states have moved to end prohibition.

President Joe Biden’s pick to head up federal drug policy worked for a major marijuana business last year, according to his financial disclosure reports.

Tom Price, the former U.S. Department of Health and Human Services (HHS) head under President Trump is also serving as a member of the board of directors for a medical marijuana business in Georgia. Like D’Amato, he similarly resisted reform during his time in Congress.

Perhaps the most well-known GOP lawmaker-turned-marijuana executive is former House Speaker John Boehner (R-OH), who has faced criticism from activists over his previous opposition to legalization while in office before joining the board of marijuana company Acreage Holdings.

Marijuana Legalization Doesn’t Lead To Increased Youth Use, American Medical Association Study Finds

Photo courtesy of Philip Steffan.

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.
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