Welcome to our end of the year wrap-up post for The Week in Weed; it’s hard to believe another year has come and (almost) gone, but the calendar doesn’t lie.  In what we are calling an homage to Dave Barry and his always hilarious Year in Review, we’ll organize these stories by month.

Without further ado, here’s a look at the stories that grabbed our attention in 2018. Continue Reading The Week, No Make that the Year, in Weed: 2018

No. We are not there yet. Are we making progress? Maybe.

The biggest impediment to explosive growth in the marijuana industry is lack of access to banking and robust financial services. Because banks face the risk of prosecution for money laundering and aiding and abetting in drug trafficking, most banks will not bank marijuana-related businesses (MRBs).

Why would any bank risk prosecution by banking MRBs? In 2014, following the issuance of the Cole Memorandum, the Justice Department and the Department of the Treasury Financial Crimes Enforcement Network (FinCEN) issued non-binding guidance on how financial institutions could serve MRBs. (For a more complete analysis of the laws related to banking MRBs see our blog post here.) The FinCEN guidelines called for fairly intensive, ongoing and expensive due diligence of any MRB customers, to the point where the risk/reward ratio for banks became inverted—high risk (jail, loss of banking license), low reward (low profit margins).

While most banks thought the risks far outweighed the benefits of having MRB customers, some financial institutions, mostly local banks and credit unions, saw in the FinCEN guidelines an opportunity and quietly began offering depositary services to MRBs. According to FinCEN, in 2017 there were over 300 financial institutions providing some form of banking services to MRBs. However, the vast majority of business in the industry is conducted in cash. For many businesses that touch the plant, this makes profit and loss statements questionable, taxing authorities nervous, and potential investors dubious about valuations.

Since the publication of the FinCEN statistics, much has happened to banking related to the marijuana industry—some of it good, some bad, and some ugly. Let’s take them in reverse order. Continue Reading Banking Marijuana Related Business: Are We There Yet?

Welcome back to The Week in Weed, your Friday look at what’s happening in the world of legalized marijuana.

Less than two months after California’s legal cannabis industry launched on New Year’s Day, state officials are starting to target hundreds of marijuana companies that are operating illegally without a license.

As the opioid crisis deepens, an increasing number of researchers and advocates are looking at legal marijuana as a possible solution.

A bipartisan bill was offered in the House on Thursday seeking to circumvent attempts by Attorney General Jeff Sessions to encourage stricter enforcement of federal marijuana laws in states where the drug is legal.

Welcome back to The Week in Weed, your Friday look at what’s happening in the world of legalized marijuana.

One of the problems with a new industry is coordinating supply and demand.  Maybe Oregon and California could work together to solve both their problems.

Oregon’s top federal prosecutor said the state has a “formidable” problem with marijuana overproduction that winds up on the black market.

California’s top cannabis regulator said the state deserves credit for a successful rollout of retail marijuana sales, but acknowledged that significant issues loom in the near future.

Another week, another bit of marijuana banking news, as Fourth Corner Credit Union will be able to serve the industry – but there’s a catch.

Fourth Corner Credit Union will be allowed to bank marijuana related business but has to stay away from dispensaries, Fed says.

Fourth Corner won’t serve dispensaries, focusing on ancillary businesses such as accountants and landlords.

And finally, a useful survey from The Cannabist.

It’s been a month since U.S. Attorney General Jeff Sessions rescinded the Cole Memo, Obama-era Department of Justice guidance on enforcement of federal law in states that legalized marijuana in some form.

In a recent article, senior officials with the Department of Justice’s Office of the United States Trustee (the “UST”), the federal government’s watchdog of the bankruptcy system, reaffirmed the department’s position that bankruptcy relief is not available to businesses in the weed industry.  Such a reaffirmation of a well-established policy is not new. However, the article is noteworthy in that it clarifies just how broadly the UST is willing to expand the scope of that policy and that it may prevent “downstream” participants, such as landlords of marijuana dispensaries, from accessing relief under the bankruptcy code. Continue Reading U.S. Trustee Issues Warning to ALL Participants in the Cannabis Industry: Bankruptcy Relief May Not be Available, So Don’t Let Your Profits Go Up in Smoke

Welcome back to The Week in Weed, your Friday look at legalized marijuana.  And what a week it was!  From California’s legalization of recreational pot to the rescinding of the Cole Memorandum, this has been a roller coaster ride for the industry.

Let’s start with California’s legalization:

LOS ANGELES (AP) — California on Monday becomes the nation’s largest state to offer legal recreational marijuana sales.

For the Bay Area’s cannabis community, legalization means reckoning with capitalism never imagined in Haight-Ashbury’s “turn on, tune in, drop out”  ethos of the late ’60s.

Continue Reading The Week in Weed: January 5, 2018

According to reports appearing this morning in the New York Times and the Washington Post, Attorney General Sessions is expected to rescind the Cole Memorandum later today.  The Cole Memorandum is a Department of Justice policy that strongly discourages federal prosecutors from enforcing federal marijuana laws in states in which possession and use of marijuana is legal under state law.

Sessions has long been a critic of legalizing marijuana use, but until now has taken no tangible steps to halt its use in states which have legalized it.  Rescinding the Cole Memorandum makes it easier for federal prosecutors to commence criminal actions against companies and individuals in the cannabis industry.  Even with yesterday’s appointment of seventeen new US Attorneys, it remains to be seen whether federal enforcement of marijuana laws will increase as a result of the recession of the Cole Memorandum.  Whether or not federal prosecutions increase, the rescission of the Cole Memorandum is sure to cause many businesses and investors in the cannabis industry to rethink their strategies.

The Trademark Trial and Appeal Board (“TTAB” or the “Board”) recently affirmed two refusals to register trademarks:

1) an intent-to-use trademark application for POWERED BY JUJU for “smokeless cannabis vaporizing apparatus, namely, oral vaporizers for smoking purposes; vaporizing cannabis delivery device, namely, oral vaporizers for smoking purposes”, initially refused based on a lack of bona fide intent to use the mark in lawful commerce; and

2) a use-based application for JUJU JOINTS for “smokeless marijuana or cannabis vaporizer apparatus, namely, oral vaporizers for smokers; vaporizing marijuana or cannabis delivery device, namely, oral vaporizers for smoking purposes”, initially refused based on lack of lawful use in U.S. commerce. Continue Reading Bad JuJu: No Federal Trademark Protection for Marks Covering Marijuana Vaporizers

As we reported last month, on October 17, 2016, Innovative Industrial Properties, Inc., a real estate investment trust (colloquially, a REIT) specializing in the acquisition, ownership and management of industrial properties leased to experienced, state-licensed operators of regulated medical use cannabis facilities, filed a registration statement with the United States Securities and Exchange Commission under which the company is offering up to 8.75 million shares at an initial public offering price of $20 per share.  The Company simultaneously filed to list its shares on the New York Stock Exchange. Continue Reading November Surprise? NYSE Approves Industrial Innovative Properties’ Listing Application