Last November, medical marijuana advocates launched the National Cannabis Industry Association (NCIA), a lobbying organization dedicated to representing the interests of the medical marijuana industry on the federal level. Today marks NCIA’s first official “congressional lobbying day,” during which representatives of the organization are meeting with members of Congress to argue for the protection of medical marijuana interests.
To kick off the day, NCIA held a press conference this morning that included presentations by medical marijuana dispensary owners, cannabis researchers and U.S. Representative Jared Polis (D-Colo.), an avowed supporter of medical marijuana rights.
One of the panelists was David Guard of the analysis firm See Change Strategy. He and his colleagues have recently released a “State of Medical Marijuana Markets 2011” report, which Guard called the “first credible business analysis of medical marijuana.” Guard said that estimates on the size of the legal cannabis industry have ranged from a market worth of anywhere from $100 million to $100 billion. See Change arrived at a figure of $1.7 billion based on a comprehensive set of surveys, interviews and research of public records. California alone controls 76 percent of that. If industry trends in states like Colorado, which holds another 16 percent of the market share and boasts the fastest growing market in the country, continue, Guard expects that $1.7 billion to reach $8.9 billion in just five years.
The very existence of a lobbying organization, coupled with the all-business approach of those prepared to weather the storms of battling the federal government, seems to herald the arrival of nothing less than Big Pot — at $1.7 billion, still a fraction of Big Tobacco or Big Pharmaceutical, but perhaps the fastest growing industry in the country, if See Change projections hold true. Accordingly, everyone at today’s press conference vowed to push for the recognition of medical marijuana as a legitimate, legal business across all levels of government, a radical change from the gray area it presently inhabits, which has resulted in an unresolved ever-growing conflict between federal and state laws.
Steve Fox, the chief lobbyist for NCIA, said, “Our members simply want to be treated like business owners in any other industry. We are far from that point now. The IRS and federal bank regulators are taking advantage of statutes enacted to stop truly illicit drug trafficking in order to place unfair and onerous financial burdens on these businesses.”
To that end, Fox said, NCIA intends to lobby Congress primarily for changes to banking regulations and U.S. Tax Code. Currently, federal laws have allowed the Treasury Department to block dispensaries from holding bank accounts (DeAngelo reports that he’s had three bank accounts shut down; Jill Lamoureux, a Boulder, Colo., dispensary owner and NCIA board member, said she’s had five bank accounts closed) and the IRS to target dispensaries with debilitating audits.
On that last note, DeAngelo said that section 280E of the tax code was intended for cocaine kingpins, international drug smugglers and crystal meth distributors and should not be interpreted to apply to state-legal medical marijuana dispensaries. He argued that dispensaries like his provide a “safe alternative to the dangerous conditions of the illegal market” and that taxing them out of business would just send their clients running to the black market.
Rep. Jared Polis agreed with this notion. He said that loosening federal restrictions on medical marijuana would be an “opportunity to strike a blow to criminal drug cartels and reduce crime,” as well as minors’ access to marijuana. It would also put an end to the paradoxical set of current federal regulations that only spawn violations—for example, by forcing dispensaries to operate as cash enterprises because of the banking laws, which in turn makes it far more difficult for them to comply with taxation because operating without a bank account makes record keeping a difficult proposition.
In a statement to The American Independent preceding the press conference, Polis expanded on this:
I am aware of and very concerned about the activity of the FBI, DEA and IRS in several states with medical marijuana laws. In my time in Congress I have been in frequent communication with the Department of Justice asking for clarification that the right of states to regulate this industry and enforce the laws adopted by their voters and general assemblies is respected by the federal government. We have seen less of this confusion in Colorado because our General Assembly has established a robust regulatory framework—the most regulated in the nation—which makes it much easier for businesses in my state to be in “clear unambiguous compliance” which the Department of Justice stated in their October 19, 2009 memo is the metric used for enforcement.
Yet even the increased regulations in the state have not made Colorado dispensaries immune from the federal crackdown. While all of the officially reported dispensaries of the dozens facing IRS audits have been in California, an NCIA board member reports that there are now rumors of at least one Colorado dispensary being targeted.
Back at the press conference, Polis said that the situation isn’t likely to get any better for dispensaries without federal legal reform. “The next level requires congressional action,” he said. To that end, he’s seeking bipartisan support of bills protecting dispensaries. Reps. Ron Paul (R-Texas) and Dana Rohrabacher (R-Calif.) have so far reached across the aisle to offer cooperation, and Polis’s fellow Democrat Pete Stark (Calif.) is working on a bill to revise the tax code, as Polis works on a bill that would open banks to dispensaries.
With actions like Polis’s, even as IRS, Justice Department and Treasury Department efforts to dismantle the industry increase, support for medical marijuana among others at the federal level has grown. Polis, Stark, Barney Frank (D-Mass.) and others are beginning to throw their weight behind medical marijuana, and then there’s the new National Cancer Institute entry on cannabis that touts its medicinal benefits (although a section on its anti-tumor properties has been removed).
On these hopeful notes for the industry, Fox said, “It’s about time. It should be recognized as medicine, and it’s a crime that it isn’t.”
By Kyle Daly
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