Having won the big battles for legalization, activists in Colorado and Washington are aiming at new obstacles:
Top of the list is access to financial services. Most banks and credit-card companies will not deal with dispensaries for fear of violating federal money-laundering laws. This forces many to operate as cash-only businesses, with all the attendant hassle and security problems. One frustrated dispensary owner says the payroll accountant must spend a day a week sorting employees’ wages into piles of cash: “It’s so old-school I feel like she should be wearing a monocle.”
Grilled at a congressional hearing last week, [deputy Attorney General James] Cole said the justice department was reviewing the issue with banking regulators. Tax reform, dispensary owners’ other big worry, will be trickier. … Jaime Lewis, a Denver-based dispensary operator, says she pays an effective tax rate of 67 percent; about twice as much, she reckons, as comparably sized companies in other sectors.
Meanwhile, Mike Riggs insists that investors would be pouring money into Colorado’s cannabis industry if not for the state’s unreasonable residency requirement:
The rule, which Colorado residents did not vote for when they approved Amendment 64, requires a person to have been a Colorado resident for two years before they can apply for a marijuana business license, and three years before they can invest in a marijuana grower or retailer. It also has to be the investor’s primary residence. For comparison, Washington state has a three month residency requirement, and it doesn’t have to be the investor’s primary residence.
But financiers are getting creative:
The silver lining for investors is that growing and selling marijuana aren’t the only investment opportunities. “There’s obviously the industry itself, but there’s also the ancillary market,” says Mason Tvert of the Marijuana Policy Project, the group that led Colorado’s legalization campaign (and which did not push for a residency requirement). Paraphernalia, like vaporizers and vape pens, are an obvious opportunity, but the list doesn’t end there. Tvert points to Uber’s disruption of the taxi industry, and suggests that a similar app could be developed for marijuana. He also wouldn’t be surprised to see interest grow in specialized gardening products and classes on cultivation, thanks largely to the provision in Colorado’s law that allows adults to grow marijuana in their homes.
Tvert touches on the banking obstacle in the above video. Previous Dish on the business of bud here and here.
The Dish 