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Hemp Industry Win: Farmers Might Finally Get Bank Access

Hemp Industry Win: Farmers Might Finally Get Bank Access

Banking has been an issue for cannabis and hemp businesses alike due to federal banking restrictions for years. But for hemp, that all could be changing very soon.

It’s safe to say that the hemp industry and cannabis industry don’t have the best relationships with banks. Because most banks are federal institutions, they have to follow federal law. This is why despite cannabis being legal in multiple state, businesses have a lot of difficulty finding a bank that will work with them.

While this will remain the case for the cannabis industry unless the SAFE Banking Act passes, the legal hemp industry has achieved another milestone in regards to banking for legal hemp businesses.

Hemp Industry Banking

Currently, the banks that actually work with legal hemp businesses could be counted on one hand. Due to strict requirements that come with loads of paperwork, most banks just avoid hemp businesses all together. But that is all about to change.

Federal and state bank regulators announced Tuesday that they were scrapping a burdensome requirement that banks said kept them away from the hemp business. With the requirement scrapped, banks no longer have to treat their hemp customers as suspicious and file reams of paperwork to anti-money-laundering authorities for each interaction.

In other words, with less paper work and red tape surrounding the legal hemp industry, banks are about to feel a lot safer about working with hemp businesses. And it’s not like the demand isn’t there either.

In November of 2019, the American Banking Association surveyed 1,800 agriculture-focused banks in the country and found that almost half had gotten questions from their farmer-customers about whether they would still do business with them if they started growing hemp.

Hopping on a moving train

Banks have been sitting on the sidelines of the legal hemp industry and legal cannabis industry for a while now, and the industry has progressed just fine without the financial institutions up to this point. Even though banks have been slow to embrace the cannabis industry, investors have been geared up to profit from it.

Analysts tracking publicly traded companies have added pot producers to their portfolios, in order to help investors decide where best to maximize their exposure to the industry. Ultra-rich venture capitalists have begun to treat pot businesses like tech start-ups. While some stocks have had their hiccups, the industry is looking strong and projected to continue growing through 2020 and beyond.

While banks have been slow to get onboard the legal hemp industry train, hemp businesses will likely be happy to work with them now that the requirements have been lessened. Even though hemp flower producers may still find it difficult having a product so similar to federally illegal cannabis, other businesses in hemp clothing and manufacturing should start finding it much easier to find a bank that will work with them.

Is cannabis banking next?

The hemp industry is making strides on strides in terms of legalization and banking access, whereas legal cannabis industries have been inching along slowly year over year. Progress has been exponential since Colorado first legalized in 2012, with multiple states following suit in the years after. But with federal law remaining the same regarding cannabis, progress has been slow with legal cannabis businesses still lacking banking access, despite state law.

The SAFE Banking Act is currently the best hope legal cannabis businesses have to achieve banking access in the near future. While the bill has already passed through the House of Representatives with large support from the banking industry. However not many are hopeful of the bill surviving the republican controlled senate headed by Mitch McConnell.

The irony of the whole situation is that McConnell is largely responsible for the passing of the 2018 Farm Bill the federally legalized hemp across the country, yet he will also be the reason that legal cannabis businesses may not get the access to banks they desperately need. Only time will tell, and for, all the wires are silent.

Illinois Cannabis is Legal? Why You Probably didn’t Hear about It

Illinois Cannabis is Legal? Why You Probably didn’t Hear about It

A major issue in the cannabis legalization movement is that every state can do it differently. Illinois cannabis legalization definitely did it different, and not for the better.

A lot of states that legalize cannabis add something new to their industry. Whether that’s limiting licensing because Oregon didn’t, or lowering regulations like Oklahoma did because California’s are so strict. Illinois is no different.

In June, Illinois became the first state in history to legalize the recreational possession and sale of cannabis entirely through the legislative process, whereas every other state has legalized through state-wide ballots. They also took a huge step in expunging the criminal records of nearly 800,000 residents in the state who possessed or purchased up to 30 grams of cannabis and were prosecuted.

With the state set to begin adult recreational sales in January 2020, all seems well and good. That is until you look a little closer at the legislation.

The Illinois Cannabis Crunch

Some states choose to be very lax with their regulations, like Oklahoma or Oregon. Both states have booming cannabis economies with Oklahoma’s in particular taking off faster than any other medical industry in the country. But both states are also facing serious over-supply issues.

Oregon has already taken the brunt of the surge, with so much more cannabis in the state than its residents consume that they had to pass a law permitting cross-border sales of cannabis to try to get rid of the excess. Oklahoma is following a similar path, with over 4,000 licensed growers and only 1,400 dispensaries for a state that is highly interested in cannabis. On top of that, there is roughly one dispensary for every 70 Oklahomans, which is not ideal for continued business traffic.

To avoid making the same mistakes, Illinois put a cap on how many dispensaries are allowed to open in order avoid cities filling up with pot shops too quickly. However at the end of 2019, the state only has 113 permitted dispensaries for recreational sales. Remember how Oklahoma had a dispensary for every 70 people? Illinois hardly has one for every 100,000.

An Attempt to Keep Big Business Out

It’s fair to say that Illinois’ cannabis legalization intentions were pure enough. The purpose of the dispensary cap is to prevent chains from taking over. The legislation limits chains to no more than 10 locations in the state, and limits the entire state to only 500 dispensaries, total.

That may sound like a lot of dispensaries, but 500 dispensaries is just enough for every 200 people to have a shop to visit. Additionally, the state won’t be adding any new dispensary licenses until May 2020, leaving four months of extremely limited supply. Even then, the state is only issuing 75 more licenses, leaving less than 200 dispensaries by the end of May at the earliest.

Also being a more conservative state, it is expected that a good bit of Oklahoma jurisdictions will ban retail dispensaries altogether, and a lot of people are concerned that the efforts to keep big business out will result in even more solicitation of private market cannabis.

A Slow and Steady Approach

Recreational cannabis sales are set to begin in less than 2 months in Illinois. With a little more 100 dispensaries to serve the entire state on January 1, it’s going be very difficult to get everyone taken care of for some time. But the Illinois cannabis industry doesn’t appear to be in a rush.

To put it all in perspective, by the end of 2020 Illinois is only projected to have about one tenth of the amount of dispensaries as Oregon has, with the maximum allowance of the legislation only being equivalent to one quarter of the Oregon cannabis industry when the Illinois cannabis industry is fully up and running in what will most likely be a few years.

This might not be a bad thing for Illinois though. Being a more conservative state outside of Chicago, demand for cannabis likely won’t be as high as other states that have legalized. Also with homegrowing allowed under the new law, residents that can’t find a nearby dispensary will either not participate in the industry, or start growing their own.

While the latter could lead to a rise in private market distribution, it isn’t very likely due to what most are projecting will be low demand outside major metropolitan areas, where dispensaries are most concentrated. This is why the industry hasn’t sparked a lot of interest nationally. A lot of people aren’t expecting any big developments for at least two years, and even then the Illinois cannabis industry will still be a small player compared to other states that have legalized cannabis.

Illinois cannabis legalization is a great thing for the state and the country. They may be moving more slowly than other states, but they may also just be more cautious and hoping to avoid the mistakes made by Oregon or California. Unfortunately it’s much too soon to say how the Illinois industry will perform, but usually where there is legal weed, there is prosperity.

Jamaican Cannabis Rundown: Laws and Culture Explained

Jamaican Cannabis Rundown: Laws and Culture Explained

It’s likely the most well known cannabis culture in the world. But it wasn’t always that way.

Jamaican cannabis has always been notorious. The stereotypes of the “Rasta Man” puffing on his joint with a beanie and long dreadlocks probably come to most people’s minds when you mention Jamaica. But why?

Jamaica has an interesting and relatively brief history with cannabis compared to other countries in the Middle East and Asia. Yet other than it’s clear water and beautiful beaches, cannabis is one of Jamaica’s biggest attractions.

Jamaican Cannabis Quick History

Cannabis has been in Jamaica since the mid 1800s, brought to the island by indentured servants from India while both Jamaica and India were under British rule. In fact, the word ganja used by most in Jamaica to describe cannabis stems from Hindu origins.

Believe it or not, cannabis was actually banned in Jamaica under the 1913 Ganja Law, which was supported by the European elites and Council of Evangelical Churches in Jamaica (side note, Jamaica has more churches per square mile than any other country). This law would be made even more strict over time, especially during times of civil unrest during the 1940s and 60s.

Despite the laws in place, cannabis was still a customary herb in Jamaica for over 100 years. After the 1960s, farmers in Jamaica saw opportunity to take advantage of the growing demand for cannabis in Europe and North America. This resulted in even more enforcement from police, but the resulting trafficking industry made enough money for many in the political and legal systems to look the other way.

It wouldn’t be until February 2015 that Jamaica actually moved to change their cannabis laws for the better.

Cannabis Decriminalization/Legalization in Jamaica

Taking the same name from the oppressive original law, the Ganja Law of 2015 reversed the rules of the 1913 law, and added new, more progressive amendments in their place. To start, Jamaica decriminalized small amounts of cannabis for personal use, if you consider two ounces to be a small amount.

The new Ganja Law also allowed the cultivation of up to five plants, both only resulting in a petty offense instead of a criminal record. Practitioners of the Rastafari religion were also given permission to use cannabis for religious purposes. All of these amendments were put in place not only to reduce harsh punishments for cannabis use, but to pave the way for a new, legal, medical cannabis industry.

Most notably, the 2015 Ganja Law included special amendments that aimed to help indigenous farmers get a step up in the new medical industry, including government subsidies for land and equipment, plus assistance with licensing to enter the medical industry from the private market.

While these new amendments were passed in 2015, it wouldn’t be until early 2018 that the first medical cannabis dispensary opened in Jamaica. Now while the medical industry is slowly growing, the private market has exploded, especially when it comes to cannabis tourism.

ganja culture in Jamaica

Jamaican Cannabis Culture

It only takes one visit to Jamaica to recognize that “decriminalization” means two different things in Jamaica and the United States. While the applications of decriminalization are the same — getting caught with small amounts of cannabis results in a fine and no criminal record — the degree of enforcement is vastly different.

In other words, there is almost no enforcement on the private cannabis market in Jamaica compared to the United States. While it is extremely uncommon to see someone smoking cannabis publicly in a decriminalized state of the U.S., it is much more normalized in Jamaica.

The vast difference in acceptance of cannabis all has to do with the culture surrounding cannabis. While Jamaica may have banned cannabis for some time, it never had the massive propaganda machine that the United States had to push the drug war agenda, turning millions of people against cannabis for decades.

Also having cannabis as part of the island’s main religious sacrament exposed many more to the plant from a young age where it became more normalized, and seen more as a potentially useful plant than a dangerous narcotic like how it was viewed in the states.

Due to the country’s overall embrace of cannabis since its arrival in Jamaica, the industry is thriving, and is only going to continue to grow, both legally and illicitly.

Hear more about what smoking Jamaican ganja is actually like right here.

Illinois Legalization: Illinois becomes 11th state to legalize cannabis

Illinois Legalization: Illinois becomes 11th state to legalize cannabis

Illinois residents can soon enjoy cannabis freely in their home state, they just have to wait a while.

Illinois has become the 11th state in the U.S. to legalize cannabis for recreational use after Gov. J.B. Pritzker signed a bill that will allow the licensed growth, sales, possession and consumption of cannabis for adults 21 and older. One of Pritzker’s campaign promises, the bill also implements the nation’s first comprehensive statewide cannabis marketplace designed by legislators.

Suffice to say the governor was excited to sign the bill into law, and said that it was long overdue in the state. However Illinoisans will still need to wait a while to start working in the cannabis industry in the state.

Illinois Legalization

With this new bill comes a few big steps for the state of Illinois. The bill will allow the licensed growth, sales, possession and consumption of cannabis for adults 21 and older, allowing possession of up to an ounce for residents, and 15 grams for non residents.

Illinois is also the first state to fully legalize commercial sales of cannabis through the legislature, rather than through referendum. But one aspect of this bill that will start impacting individuals immediately, is the expungement clause.

Pritzker emphasized that the law provides for automatic expungement of arrests for marijuana possession under 30 grams, and that he will pardon those with convictions for possession up to 30 grams. Individuals and prosecutors may go to court to seek expungement of cases involving up to 500 grams.

“Today we are giving hundreds of thousands of people the chance at a better life,” Pritzker said.

Once the market grows to maturity, the program is estimated to generate $500 million a year in taxes. That would come from a 10% tax on products with up to 35% THC, the component of the plant that gets users high; 20% for cannabis-infused products such as edibles; and 25% for THC concentrations of more than 35% — plus local sales taxes.

In a concession to law enforcement, an earlier provision to allow adults to grow five plants each at home was eliminated. Instead, only certified medical marijuana patients would be allowed to grow up to five plants each at home.

Now What?

While the bill has been signed into law, Illinois won’t be selling recreational cannabis to its citizens anytime soon. The permits the sale of legal cannabis products starting in January of 2019. So while not that far away, Illinoisans still have over 6 months to wait before they can purchase or grow their own cannabis.

The governor emphasized that 25% of the revenue from marijuana taxes will go to marijuana business ownership in black and brown communities that were disproportionately affected by the war on drugs. In addition, 20% will go to substance abuse treatment and prevention and mental health care, with additional funds going to pay the state’s bills, law enforcement and public education on marijuana health issues.

To address concerns that cannabis retail shops will end up concentrated in minority neighborhoods, state Rep. Kelly Cassidy, a co-sponsor of the bill, said there are minimum distances between shops to avoid a “liquor store on every corner“ phenomenon.

Local governments can still ban marijuana businesses or set rules to determine where they are allowed. While municipalities cannot prohibit people from possessing marijuana, landlords can still keep it off their property and employers can prohibit use by their employees.

It’s going to be an intense 6 months in the Illinois legislature as application processes begin and citizens start applying en masse. The state will need to establish how many applications it approve, and how many licenses will be given out to commercial growers, processors and retailers.

Stay tuned on The Real Dirt for updates about Illinois legalization and what’s happening with the cannabis industry development in the state.

Is New York Next to Legalize Cannabis?

Is New York Next to Legalize Cannabis?

New support from New York’s Farm Bureau could be the final push the state needs to legalize cannabis. But will it be enough?

The New York Farm Bureau issued a memo Monday backing a bill that would legalize, tax and regulate marijuana in New York, which lawmakers are considering before they end their annual session June 19. And farmers have a lot to gain if this bill passes and New York decides to legalize cannabis.

This bill specifically includes measures meant to ensure struggling farmers in New York’s poorer counties get a chance to break in to the marijuana and hemp industries. While the farming industry in New York isn’t in any risk of shutting down any time soon, getting preferential treatment should the state legalize cannabis would mean big money for the industry.

What’s in the New York Bill to Legalize Cannabis

The bill, should it pass, would create a new Office of Cannabis Management to oversee the recreational and medicinal marijuana industries, as well as the hemp industry.

Only those above the age of 21 would be able to legally purchase marijuana, and local governments would have the ability to hold a public referendum to block legal sales within their borders. This has happened in states like Massachusetts, where local governments kept cannabis illegal despite the state’s decision to legalize cannabis for adult us.

The bill overall is relatively standard for states that legalized in the past. Adult use, cultivation and sale will be permitted, but until the bill passes, there won’t be an Office of Cannabis Management to begin working on the details.

Farmers Might Not Be Enough

While the Farmers Bureau represents over a thousand farms in New York state, the only votes that matter in this case are those of the Democrats in New York. 30 Democrats have gotten on board with the bill, but 32 are needed to pass without any Republican support.

However the Democrats are confident that the bill will at least have enough votes to pass the lower chamber, and Governor Cuomo of New York has pledged to sign the bill if it gets to his desk.

New York has the third largest population of any state in the country, an a legal cannabis market would bring in massive amounts of revenue to the state. While California has had a slew of problems since they legalized cannabis due to the surplus of private market growers and illegal dispensaries, New York wouldn’t have the same problem.

If done right, New York could potentially become the new cannabis hub of the world. But that is a big IF.

Should New York legalize, there’s going to be a bunch more farmers planting clones outside for the very first time. Luckily The Real Dirt has that covered.
Did the USDA Really Deschedule THC?

Did the USDA Really Deschedule THC?

The USDA did deschedule THC. Just not in the way people currently believe.

An article that has exploded within the cannabis community claims that the USDA quietly “legalized” THC last week. While this isn’t entirely wrong, it is incredibly misleading. This is because the descheduling of THC by the USDA only applies to THC in hemp.

For a quick refresher, The Farm Bill of 2018 legalized industrial hemp. This “legal” hemp is defined as any cannabis plant with a THC percentage of .3% or less. But if THC is still on the controlled substances list, how can that be?

The USDA on THC

In a memorandum submitted to the Secretary of Agriculture on May 28th, the USDA gives a legal opinion on provisions to the Farm Bill. They point out a specific amendment in the newest version of the bill that removed THC in hemp from the Controlled Substances Act (CSA). 

By amending the definition of marijuana to exclude hemp as defined in AMA §297A, Congress removed hemp from schedule 1 and removed it entirely from the CSA. This means hemp is no longer considered a controlled substance at all. With the amendment to exclude THC in hemp from schedule 1, Congress has also removed THC in hemp from the CSA.

Now, that last sentence from the memorandum is what people are getting excited about. When paraphrased to say, “Congress has removed THC from the CSA,” it’s easy to see why. But the key words in the entire amendment is “IN HEMP”.

THC in Hemp

This is where the entire article claiming THC is legal falls apart. Hemp has a very specific definition, that being the definition requiring a THC content of .3% or less to be considered hemp. It makes perfect sense that THC in hemp would need to be legal, in order for legal hemp to be able to contain any amount of THC. In other words, because hemp can contain up to .3% THC, that THC needs to be legal for the hemp to be legal.

Now, because of hemps legal definition pertaining to any cannabis plant with .3% THC or less, surpassing the .3% threshold disqualifies the plant as hemp. Under this legal definition, anything above .3% THC is considered psychoactive cannabis, which is still a controlled substance that is federally illegal.

Why it Matters

The article that broke this story hinted at future possibilities with this newly legal THC, like simply breeding hemp to have higher THC. And that’s what makes this article lose all credibility.

Remember when I said that to be legally considered hemp, the cannabis plant must have a THC content of .3% or less? And remember what happens when the THC content surpasses that .3%? It’s no longer hemp.

While this article suggests that the USDA basically just added a magic loophole that will now allow breeders to grow THC rich hemp, it forgets to mention that by doing so, the plant will no longer be hemp. If the author knew the origins of the cannabis plant, they would know that most of the THC-rich strains we consume today were bred to have that high content from what originally was European Hemp with almost no THC to begin with.

What this article is suggesting, is basically repeating the entire history of cannabis breeding, so we can turn the legal hemp we have now, back into illegal cannabis. If you want The Real Dirt’s legal advice, we suggest that you don’t do that. THC has been legalized in the sense that as long as it is in hemp, and does not surpass .3%, it is legal. Once it leaves the hemp, or surpasses .3%, you’re entering some dangerous territory.

But hey, you can judge for yourself! Read the full USDA Memorandum right here.

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