Legalize Marijuana advocates want it legal everywhere in the US. Some states have legalized it. During Covid, states left pot stores open but shuttered every other small business.
One huge problem in the pot industry is banking. Can’t use the Federal banking system because it’s illegal. There is a workaround for sure, cash or crypto being one of them. But, things would be a lot easier with respectable banking.
Some states have chosen to go on the edges. They legalize medical marijuana without giving their full approval to just smoke weed anywhere anytime. Some have done nothing.
One thing I have noticed is that governments all over the US have ramped up crony capitalism when doling out licenses for pot stores and businesses. How much money is being passed back and forth under the table?
The second thing I have noticed is that if you invested in Pot Stocks, your returns were absolutely abysmal. Pot is a commodity just like corn. The only thing that separates it is branding.
Last year, the US House passed a legalization bill. In it, they decriminalized past convictions for offenders. But, most of the legislation for marijuana was stalled due to politics.
In these times, it is clear we are split as a country on many many issues. Some of these can be handled via Federalism, the way our country was structured at the outset. Abortion is one of those issues. So is legalized pot. Let each state pass its own laws.
The problem becomes the banking system. For an issue like abortion, not a problem. For something that was an illegal substance turned into a legal one on a state-by-state basis, a big problem.
The solution is for the Federal Reserve to step in and make a recommendation on how to handle banking for the pot industry. Then legislators ought to pass it and the President can sign it. That allows states to engage in federalism, and we will see how the chips fall.
Personally, I agree with Milton Friedman on the drug war. It’s useless and it allows all kinds of adverse things to happen. At the same time, pot isn’t the harmless drug that people say it is. I also detest walking around cities these days and smelling pot everywhere while smoking a cigar or cigarette is considered a federal offense. For what it’s worth, I don’t smoke anything.
As libertarian as I am, legal pot does affect me. What happens when the stoned driver plows into my car? Similar to alcohol, there has to be some penalty and some restrictions. It’s not as if people are more responsible just because they use pot. I don’t think there should be any taxpayer money going to any drug-related programs if it’s all legal. Let them go the same way cigarettes and alcohol have gone. Private abuse help programs are the way to go.
But, in the short run, at least let pot businesses use the Federal banking system to move money around. That ought to make that part of the business safer for customers and investors.
FYI. Our firm has been auditing cannabis companies ever since oregon opened the floodgates years ago. At the time it really helped the firm as no one would touch it. That includes public companies since 2019 (prior to 2019, we did private audits and public real estate ventures that leased to the related by ownership and management cannabis companies). Up through 2020, getting a checking account was very difficult. Basically 1 state only credit unions were sometimes available (no CCC or FED involvement - state only). However, in 2021 things started to get easier. You won't find any of the top 10, but its not the disaster it was in 2019. What i found really interesting was all the firms that agreed to take on cash only customers. Payroll companies that would accept cash. Same for suppliers for things like soil, fertilizer, buildout contractors. Lots of smaller entities happy to take cash customers. Now however, because in most jurisdictions, granting licenses was a cash cow to the municipalities and states, the market has become totally saturated. A few years ago, the agency overseeing cannabis in oregon did a pretty decent audit of the situation. Its a good read. Covid helped, but that is over. Big washout happening the last year or so
It's a gateway drug - lots of illegal stuff (guns, crime, unwanted babies) occur around drugs.