The Montecito Planning Commission held a lengthy hearing in late December on the proposed ordinance to ban delivery and cultivation of marijuana. The overall mood of the commission was very supportive of local cannabis-related outfits. The ban was seen as a drastic step that could severely impact law-abiding businesses, and as such they drew up a resolution to not adopt such a proposal.
Public comment came from Thomas Martin, whose medical marijuana company has been in business for 10 years. Both Martin and the company botanist gave detailed, passionate testimony against the ban, instead urging officials to adopt state regulations due to go into effect on March 1, 2016. The Commission sided with them in the end, although there was some concern that the state regulations to be adopted have not been drawn up yet.
From here the issue was sent to the County Planning Commission with similar results; the vote was 5-0 not to adopt the ban. The matter will go next to the Board of Supervisors for a final decision, but the trend seems clear.
Banking and the Cannabis Industry
One of the biggest challenges facing the cannabis industry is the inability of its businesses to use traditional banking institutions. You see banks are federally chartered, and according to federal law, marijuana is still illegal. This is starting to look like a dream situation for attorneys.
This week U.S. District Judge R. Brooke Jackson in Denver dismissed a lawsuit seeking federal approval for the first credit union for marijuana in Colorado, saying that allowing it “would facilitate criminal activity.” Four Corners Credit Union was seeking arguments relating to the legality of financial institutions providing banking services to the cannabis industry.
David Dinenberg, CEO of KIND Financial, said, “Judge Jackson’s comments over the past week showed that he sympathizes with the need for banking services for the growing cannabis industry. And yet this is a perfect example of the ambiguity between state and federal laws, and I do believe it was the only decision he could’ve come to. In fact, to put a federal judge in this position makes no sense.” But Dinenberg took exception to Judge Jackson’s statements that this “would facilitate criminal activity.”
While everyone in the legal marijuana industry as well as the banking community paid attention to the Denver federal court proceedings, Dinenberg believes it is important to not lose sight of the federal government’s position on banking marijuana. “The Top Cop in America, the Attorney General as well as FinCEN, a division of Treasury, issued memos in 2013 and 2014 that provided an outline of how banks can bank the legal marijuana industry. While I agree that the memos are not perfect, they do set forth the parameters of how financial institutions can work with the industry. Banks are in the business of banking high risk industries every day, the marijuana industry is just another high risk, albeit very high risk, industry. Banking for the industry is not a question of if — it is a matter of when and the path it will take to become a reality.”
Whoever said it would be easy? Those words seem to sum up the situation as we move towards legalization. Every step we take seems to open up 10 times as many questions. No doubt a great deal of product will be consumed just to calm down after dealing with all these thorny legal issues.