We know the cannabis industry is new, growing and there is a lot to learn. Below are common questions we've been asked.
Why is cannabis a popular topic now?
Cannabis has been federally illegal in the US for 85 years, however in 1996 California became the first state to legalize for medical use. Cannabis legality has been determined on a state-by-state basis to this day. With mounting evidence of the benefits of cannabis use for medicinal and adult use, we find ourselves in the middle of the fastest growing industry in the world.
The industry is growing in a window of time where the federally illegal status of cannabis allows for entrepreneurs to create businesses before the "big guys" (big pharma, agriculture, tobacco, and alcohol) come into the industry.
What are THC and CBD?
Cannabis contains over 400 different compounds, of which two are mentioned the most. Tetrahydrocannabinol (THC) is the compound that produces a psychoactive effect, or a "head high." Cannabidiol (CBD) is the compound that does not produce any psychoactive effects.
Both have a variety of medicinal effects, with CBD mentioned more for its positive effect on epilepsy, muscle spasms, and inflammation and THC for its positive effects on PTSD, pain and nausea.
How does it work legally in the US? Isn't it federally illegal?
At a federal level, the US Government currently considers cannabis a Schedule 1 drug, which means they consider it to be highly addictive with no medicinal value. Even so, individual states have allowed their voters to decide if medical or adult use cannabis laws should be enacted.
With a patchwork of states with varying degrees of legality and access, the laws are vastly different. Crossing state lines with cannabis is considered a "statute" issue, meaning the Federal Government controls the state line and therefore cannabis products cannot leave the state they were grown or sold in.
Is this a cash industry?
Because of the federally illegal status, banks can have a difficult time working with cannabis companies if they "touch the plant" - meaning, if you directly deal with the plant material or any of its derivates. While some companies still operate with primarily cash, cash handling procedures and security are of utmost importance.
More states are seeing charter banks and credit unions allow for banking, and several initiatives are underway on capitol hill, so we anticipate a positive change for banking in the near future.
What other countries have legalized?
Legalization is happening globally, with Canada leading the charge by legalizing for medical use across the country, and on the verge of opening up ability for all adults to purchase cannabis for adult use.
Mexico, Australia, France, Romania, Jamaica, Uruguay, Israel, The Netherlands, Germany, and Italy are just a few that have passed laws allowing for access.
When will it change at a federal level?
In the near future, there are potential positive changes that will allow for fair taxation and banking access for cannabis businesses.
In the longer run, we believe the next presidential race will have a core focus on cannabis, as many of the "swing states" have passed medical or adult use laws. Nevada, Colorado, Florida, Pennsylvania, Ohio, New Hampshire, Iowa, and in a limited way Wisconsin are allowing of cannabis use in some form. The only swing state not on the list is Virginia, making this a core topic in 2020.