The CNBC financial network banner summed it up: “Potphoria on Wall Street.” Investable cannabis stocks, especially Canada’s Tilray (symbol TLRY) and Canopy Growth Corporation (symbol CGC) are seeing wild jumps in value in a frenzy compared to 2017’s Bitcoin tumult. Such action is big news on Wall Street and in the financial networks. Hopefully, such normalization and enthusiasm will boost the on-going efforts of many American congresspeople to free cannabis enterprise of noxious business and legal hurdles. Currently, in the USA, cannabis is classified as one of the most dangerous substances on the planet and suffers from ruinous tax and banking obstacles.
President Trump and the Republicans brag about ending regulations that restrict American business and employment. Trump’s first deregulatory triumph took place soon after his inauguration: his action removed Obama-era restrictions on dumping coal mining wastes into waterways. Trump has since freed-up increased emissions from coal power plants and allowed more release of greenhouse gas methane in fracking operations.
Although Trump has gone all out to save a few thousand dying coal mining jobs, he has done nothing to aid the hindered, but nonetheless thriving cannabis industry from crippling and totally unnecessary restrictions. Hopefully, validation will be given to cannabis businesses by the current well-publicized stock frenzy. The eagerness of investors in this sector should help the President and laggard members of Congress to end idiotic rules hampering American cannabis enterprise.
The basic business problem from American cannabis entrepreneurs is cannabis’ Schedule I status on the Controlled Substances Act. Lowering this scheduling would be helpful, but other CSA schedules present their own problems.
The real solution is removal of cannabis from federal control by removing it totally from the CSA, where it should never have been in the first place. Legislation to do just that awaits further congressional action. The Marijuana Freedom and Opportunity Act was introduced in June 2018 as Senate Bill 3174. It removes cannabis from the federal schedules and allows the states to legislate cannabis as they see fit. Unfortunately, Govtrack gives it “3% chance of being enacted according to Skopos Labs (details).”
Until that cannabis is descheduled, business involving the plant face crushing tax problems. A 1986 provision of the IRS Code, 280E disallows common business expenses in cannabis enterprises, leaving them with ruinous taxation. Oregon Senator Ron Wyden’s bill S. 776: Marijuana Revenue and Regulation Act would remove this business-crippling provision. Unfortunately, it is given a mere 2% chance of becoming law at Govtrack.
A second baffling barrier to common business practices faces by American cannabis entrepreneurs is a nearly total lack of banking services. Because of cannabis’ Schedule I status, it is treated as a pariah by banks. Bizarrely, American cannabis businesses must operate on a nearly cash-only basis. This outrageously anti-business regulation is also addressed in current legislation.
Unfortunately, none of the bills below are given more than a 3% chance of passage into law by Govtrack.
Bills and Resolutions
- H.R. 6495: Marijuana Data Collection Act
- S. 3174: Marijuana Freedom and Opportunity Act
- H.R. 1823: Marijuana Revenue and Regulation Act
- S. 776: Marijuana Revenue and Regulation Act
- S. 1689: Marijuana Justice Act of 2017
- H.R. 4815: Marijuana Justice Act of 2018
- H.R. 331: States’ Medical Marijuana Property Rights Protection Act
- S. 3409: Veterans Medical Marijuana Safe Harbor Act
- H.R. 3391: Medical Marijuana Research Act of 2017
Perhaps the excitement and validation of Wall Street “Potphoria” will shame more American congresspeople, and just maybe the President himself, to see the ludicrous foolishness of current cannabis laws and schedules. These restrictions are anti-business, anti-freedom, anti-health and blatantly anti-American.
Bizarrely, Tilray’s giant leap came as a response to a DEA decision allowing the University of California San Diego to import Canadian cannabis from Tilray for a medical study on a movement disorder at Center for Medicinal Cannabis Research (CMCR). Like, there is no cannabis in California?