To date, 30 states and the District of Columbia have legalized marijuana in some form. Governing reports that eight of these states, along with the District of Columbia, allow adults to purchase and use marijuana for recreational purposes. Per CNBC, the industry as a whole is worth approximately $6.7 billion, and analysts believe this will rapidly increase to $21 billion within the next three years.
Additionally, many marijuana businesses pay millions of dollars in local, state, and federal taxes every year, which is a big boon for government programs at all levels. Despite all of this, Attorney General Jeff Sessions continues to attack marijuana publicly.
Sessions recently announced plans to roll back guidelines put in place by the Obama administration that protected marijuana users and legal sellers in states that had legalized cannabis usage. According to the Denver Post, the federal government is now pledging to ignore states’ rights by actively prosecuting anyone who is caught using or selling marijuana, regardless of their location.
To learn more about this threat and other current aspects of the marijuana industry, the Inquisitr conducted an email interview with Serge Chistov, who is a financial partner and landlord of the Honest Marijuana Company in Colorado.
‘Schools and Roads Are Being Built with Dollars from the Industry’
With the current federal political landscape apparently leaning toward attempts to squash legalized marijuana, we asked Chistov if he believes that Sessions represents a real threat to the industry.
“I think that Sessions has a little more bark than a bite… The states are getting paid, people are getting employed, and regulations are being increased and improved on a yearly or semi-yearly basis. There is a financial benefit to the states… How would that possibly work for Sessions to have a magic wand and say, ‘Marijuana is illegal, let’s roll it back.”
“Who or what is going to supplement the lost income for the state, which they are already relying on? Today, the taxes from the cannabis industry pays for the projects that everybody, users or non-users, participants or not participants, willing voters and completely opposing public, is using. Schools and roads are being built with dollars from our industry.”
Even with this confidence, Chistov does see the potential for other government issues.
“I believe that the bigger challenge might come from the legal status of the cannabinoids – the marijuana-specific cannabinoids – in the plant. Between the DEA, FDA, and the Attorney General, they can come up with regulations that are damaging to business, something that will lock larger pharmaceutical companies out of the research and development and lock a lot of users from access to the affordable medicine.
“That can happen. It did happen in America on numerous occasions, but to roll it all back? I think the genie is out of the bottle. I don’t think it is possible and the consumer is much more well educated.”
Banking Fees May be the Industry’s Biggest Foe
No matter what Sessions does in the future, one of the biggest issues the industry has faced so far comes in the form of banking fees. Many financial institutions won’t accept money from the legal marijuana industry due to FDIC issues. Banks that do allow marijuana businesses to hold an account often charge fees that are only added to these specific accounts.
“Most of the banking is backwards—you pay for the deposits that can range from one percent to multiple percentages of the deposit,” Chistov said. On the plus side, “…such arrangements are becoming more and more competitive, and I believe that the pricing will come down.” He also indicated that the worst fees have typically been added to cash deposits.
Of course, laws have forced many marijuana businesses to operate solely in cash, which makes it easier for banks to enforce extra fees. In fact, CNBC pointed out that federal laws made it necessary for thousands of companies to pay their taxes in cash, even if they owed the IRS millions of dollars.
Colorado Government and Residents Appear to Fully Embrace Legal Marijuana
Colorado voters made their wishes loud and clear in 2012, as evidenced by Ballotpedia results. Although almost 59 percent of voters rejected a legal marijuana bill in 2006, the tides had turned enough within six years for opposition to drop by 14 percent. Chistov said that the Honest Marijuana Company experienced little to no opposition from local government officials when they opened in late 2015. The 5,000-square-foot building that the company rents from Chistov hasn’t faced any public opposition in the form of protests, either.
The Future of Legal Marijuana
Assuming Sessions doesn’t turn legal marijuana into an unviable industry, Chistov says there are many changes ahead. “The key to the next generation of cannabis is bioavailability. In simpler terms, you don’t need to smoke a gram joint that contains 250 mg of THC to get a medicinal effect. Smoking is not good for you, and it is a very inefficient way of delivering the medicine.”
“Today, Honest Marijuana Company, and I’m sure other people, are working on the micro. We are already working on a nanoencapsulation of the formula that allows very small amounts of active ingredients to perform the same work as the enormous amounts used by the old-fashioned delivery mechanisms.”
In other words, if Chistov’s prediction comes true, people using legal medicinal and recreational marijuana in the future won’t smoke or vape it. Instead, they will most likely take it in a pill format or absorb it from certain food products. This is good news considering that a study published on the U.S. National Library of Medicine National Institutes of Health website found a link between smoking marijuana and an increased risk of lung cancer.
Chistov also predicts medicinal marijuana will eventually be available as an over-the-counter option for pain relief.
“It’s always going to be an over-the-counter medicinal market, which I believe recreational and medicinal cannabis will become. You will have yourself cannabis strains like the Ambiens – done by the big boys – and strains like Tylenol PM or a couple of generic modifications that will be perceived as something that will help with minor aches and pains.
“I believe it will be a pharmaceutical/over the counter situation. Hopefully, within our lifetime we will see cannabis product be available over-the-counter in a majority of the little point of sales across the country.”
What Jeff Sessions opts to do during the next couple of years will undoubtedly have a big impact on the industry’s future. Time Magazine reports that numerous lawmakers are taking a stand against Sessions’ latest announcement, and it’s possible Congress will soon be forced to make a decision about the future of legal marijuana nationwide.
A recent Gallup poll indicates that 64 percent of Americans, and 51 percent of Republicans, support legalization. This number increases annually, and there’s been a 9 percent increase in Republican support during the past year alone. If Sessions moves forward with his plan to disregard state marijuana laws, it will almost certainly cause issues for Republicans at the polls later this year.
This article was made possible by contributions from April A. Taylor.