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  • ShereeKrider 4:01 pm on January 10, 2014 Permalink | Reply
    Tags: banking industry, commerce, , State run bank   

    Legal Pot: The Gateway Drug to State-Run Banking? 

    By Karen Weise January 09, 2014



    If ever a hippie dream existed, it would probably look something like what’s being proposed in Washington by Democratic State Senator Bob Hasegawa. He wants to open a state-run bank specifically to serve Washington’s newly legal marijuana industry. The proposal would solve two real problems: Pot businesses would no longer be trapped in an all-cash economy thanks to federal laws that prohibit banks from handling drug money, and the state would send less money to Wall Street.

    There’s just one state-run bank in the country: the Bank of North Dakota. It uses the revenue collected through taxes and other government income to provide capital for low-interest loans to state residents, including students, homeowners, and farmers. The bank’s operations return millions to the state’s coffers. (It’s worth noting that the bank has nothing to do with pot.)

    As the financial crisis caused a credit crunch for borrowers, some citizens and states themselves started looking to North Dakota as a model of how to keep lending afloat. “After the banking crisis in 2008, some farmers came to me from eastern Washington, literally in tears, saying their credit was being cut off,” Hasegawa says.

    Story: Making It Safe for Banks to Take (Legal) Pot Money

    Heather Morton, who tracks financial regulation at the National Conference of State Legislatures, found bills in six state legislatures in 2010 related to the creation of state-run banks. Interest swelled as the economy continued to struggle and the Occupy Wall Street movement took up the idea of state banks as an alternative to Wall Street. By 2011 the number of states with bills contemplating the creation of their own banks hit 15, according to Morton’s research, before legislation eventually tapered off last year as the economy improved.

    In Washington, one of eight states in which legislation was put forward in 2013, the state-banking push predates the advent of a legal marijuana retail sector. Hasegawa’s bill, which he has sponsored for several years, gained support from 44 out of 98 lawmakers in 2012 but was killed in the banking committee. Each year, Hasegawa tinkers with the legislation in response to opponents, who include the state’s banking community, bond brokers, and the state treasurer. The critics argue that the effort is too risky and would diminish competition, among other things. (After lengthy study, a formal commission in Massachusetts recommended against creating a bank there, saying the effort would be more capital-intensive than it’s worth.)

    After voters approved legalizing recreational marijuana in Washington last year, however, Hasegawa saw a new opening. Marijuana businesses have had to resort to largely operating in cash and have been agitating for federal authorities to give banks permission to handle pot accounts. Because pot isn’t legal at the national level, federal money-laundering laws prevent financial institutions from handing marijuana-related money.

    Story: Surge Pricing as Colorado’s Pot Sellers Open for Business

    Hasegawa has submitted a new bill for the 2014 legislative session that would create a state-run bank as the sole depository for the state’s marijuana businesses. Passage of the bill, which Hasegawa knows is a long shot, would provide “a foot in the door” to a broader state-run bank. But even if it fails, the state senator still sees an upside: “It has drawn the debate away from the detractors of the other arguments.” Washington’s legislative session opens on Jan. 13, and recreational sales in the state are expected to start this spring.

    Opposition has now “focused on the illegality of marijuana itself,” Hasegawa says, “which makes me think a lot of their other arguments are really just smoke screens.”

    Story: Legal Weed’s Strange Economics in Colorado


    Weise is a reporter for Bloomberg Businessweek in New York. Follow her on Twitter @kyweise.

  • ShereeKrider 8:24 pm on December 11, 2012 Permalink | Reply
    Tags: , commerce, , , ,   

    Prohibitionists are Overstating Feds vs. State Marijuana Legalization Case to Media 

    by David Borden, December 10, 2012, 02:54pm

    Posted in:

    A mostly great piece in Rolling Stone this weekend, "Obama’s Pot Problem," missed the mark on the federal preemption question — can the feds shut down Washington and Colorado’s legalized regulation systems? Tim Dickinson wrote the following on that subject:

    [T]he administration appears to have an open-and-shut case: Federal law trumps state law when the two contradict. What’s more, the Supreme Court has spoken on marijuana law: In the 2005 case Gonzales v. Raich contesting medical marijuana in California, the court ruled that the federal government can regulate even tiny quantities of pot – including those grown and sold purely within state borders – because the drug is ultimately connected to interstate commerce. If the courts side with the administration, a judge could issue an immediate injunction blocking Washington and Colorado from regulating or taxing the growing and selling of pot – actions that would be considered trafficking under the Controlled Substances Act.

    But a former Bush administration official quoted in the New York Times on Thursday, former DOJ civil division head Gregory Katsas, made the opposite prediction. Katsas was "skeptical" that a preemption lawsuit would succeed, according to the Times. Why? Perhaps because it’s not just that the feds can’t force states to criminalize drug possession, as Kevin Sabet selectively pointed out to Dickinson. It’s also the case that they probably can’t directly force the states to criminalize sales either. The Controlled Substances Act in fact leans against federal preemption of state drug policy, as pointed out in a law professors brief on preemption submitted in a California case this year.

    Dickinson also pointed out that federal officials had used threats to prosecute state employees involved in implementing regulations for medical marijuana. In my opinion the US Attorney letters were deliberately vague — scary enough to influence state officials, but in most if not all cases stopping short of explicitly making that threat. A better piece of evidence, I think, is that in 16 years of state medical marijuana laws, no federal prosecutor has ever tried to actually invalidate such a law in court, not even after the Raich ruling. Why not? They must not think they have a slam dunk case. And if preemption is not a slam dunk for medical marijuana, then it’s not a slam dunk when it comes to legalization either, although there are additional arguments to throw against full legalization.

    The reality is that no one knows how this will turn out if it goes to court. Raich established that federal police agencies can use their powers in medical marijuana states to continue to criminalize marijuana federally, justified by the Interstate Commerce Clause. But that is not the same as having the power to forbid states from granting exceptions to the states’ own anti-marijuana sales laws, which in legal terms is what the regulatory frameworks do, and plenty of smart lawyers are skeptical that they can do that. This is not a slam dunk either way.


  • ShereeKrider 2:26 am on March 18, 2012 Permalink | Reply
    Tags: 2012, , commerce, , , tax and regulate   

    Marijuana: Willie Nelson endorses Oregon Cannabis Tax Act 

    Country music star and marijuana enthusiast Willie Nelson is endorsing the Oregon Cannabis Tax Act of 2012. The superstar appears in a recently released ad throwing his support behind the initiative to end the prohibition on marijuana and restore the production of hemp in Oregon.

    The Oregon Cannabis Tax Act 2012 is a citizen’s initiative campaign to regulate marijuana and restore hemp. Just as ending alcohol prohibition and regulating that market has protected society, regulating marijuana will help wipe out crime. Restoring hemp, made from the seeds and stems of the marijuana plant for fuel, fiber and food, will put Oregon on the cutting edge of exciting new sustainable green industries and create untold multitudes of new jobs.


    The Oregon Cannabis Tax Act 2012 (OCTA 2012) is gathering signatures to qualify for the November general election ballot. If passed, the legislation would:

    • Regulate the legal sale of marijuana to adults through state-licensed stores
    • Allow adults to grow their own marijuana.
    • License Oregon farmers to grow marijuana for state-licensed stores.
    • Allow unlicensed Oregon farmers to grow cannabis hemp for fuel, fiber and food.
    • Raise an estimated $140 million a year by taxing commercial cannabis sales to adults 21 years of age.
    • Save an estimated $61.5 million as law enforcement, corrections and judicial costs.
    • Increase public safety.
    • Restore respect for the law.
    • Create environmentally sustainable jobs.

    The following is the text of the OCTA 2012 advertisement by Willie Nelson:

    “Hi, I’m Willie Nelson. I urge you to support the Oregon Cannabis Tax Act to regulate marijuana and restore industrial hemp. This initiative will end adult marijuana prohibition and let our criminal justice officers focus limited resources on real criminals, not on marijuana users like me. OCTA will also allow farmers to grow hemp for fuel, fiber & food, to create jobs and help our economy. Please support OCTA. Thank you!”

    By all accounts, the prohibition on marijuana is a failure. Marijuana prohibition does not work: prohibition is a historical and contemporary failure. It is time to legalize, tax and regulate marijuana for medical and recreational purposes. It is time to free the weed.

    For more information about OCTA 2012, visit the website, sign a petition, make a difference.

    For more political news, information, and humor, check out Left Coast Lucy on Facebook.

    Continue reading on Examiner.com Marijuana: Willie Nelson endorses Oregon Cannabis Tax Act – Portland Progressive | Examiner.com http://www.examiner.com/progressive-in-portland/marijuana-willie-nelson-endorses-oregon-cannabis-tax-act#ixzz1pQo8nmGH

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