Invest in MJ Blog

Germany’s lower house of parliament passed a bill legalizing the production, sale and use of medical marijuana Thursday, Jan. 19 in Berlin.

The bill limits the sale and use of cannabis to those patients “in very limited exceptional cases,” such as with patients suffering from multiple sclerosis, epilepsy, chronic pain, and lack of appetite or nausea related to cancer treatments. Those patients will not be allowed to grow their own medicine at home.

As restrictive as this program might sound, it is an improvement to what existed. Until this law was passed, medical cannabis was only available on a case-by-case basis, as allowed by German authorities. This bill allows patients to get a prescription from their doctor, which can be filled at local pharmacies.

FOR IMMEDIATE RELEASE: OCTOBER 23, 2015

Statement from Chairman Gary Besaw

(Keshena, WI) –Today, Federal Agents improperly and unnecessarily entered the sovereign lands of the Menominee Indian Tribe of Wisconsin and destroyed the Tribe’s industrial hemp crop.

In May 2015, the Menominee Indian Tribe of Wisconsin Tribe legalized the growing of low THC non-psychotropic industrial hemp by Tribal licensees on its lands. Notice of this change in Tribal law was provided to the United States Attorney Office for the Eastern District of Wisconsin. This action was intended to comply with Congress’s actions in 2014 Farm Bill which recognizing a distinction between marijuana and industrial hemp that created an exception to the Controlled Substance Act to allow for growth, cultivation and the study of industrial hemp in certain circumstances. The Tribe’s industrial hemp crop was always intended to be a legal crop as allowed by the 2014 Farm Bill.

In response the federal actions, Chairman Besaw stated the following:

Contributed to The Globe and Mail - Published Monday, Nov. 02, 2015 5:00AM EST
Anthony Wile is chief editor of the economic and investment newsletter The Daily Bell and chief investment strategist of High Alert Investment Management.

The election of Justin Trudeau’s Liberals has had an immediate impact on the investment marketplace, with a rush to invest in the handful of publicly traded Canadian medical marijuana startups – all on the promise of legalization of recreational marijuana use.

However, as with any burgeoning new industry, including the Canadian cannabis industry as it “whitens” from its previous black-market status, investors considering directing their capital there may want to take a temporary respite from hitting the go button.

Investors who make assumptions today about what may be profitable tomorrow will likely find their wallets considerably lightened by a changing set of regulatory circumstances.

While a legalized cannabis industry means a substantial increase in potential profitability for the industry leaders already invested in the marketplace, for all investors the key questions are: What will that new landscape look like? How will the industry be regulated, structured and taxed? And, most importantly for the new or individual investor – how best to navigate the marketplace?

A historic deal between the Suquamish Tribe and the State of Washington was recently signed and entered into.  It allows a Native American Tribe to cultivate, process, and sell marijuana within a state’s highly regulated marijuana system.  While the Tribe’s own marijuana regulations have not been disclosed to the public, this does set a precedence and we expect more Native American tribes will follow suite in various States around the US and in other countries like Canada.

The Washington State Liquor and Cannabis Board negotiated the compact with the Suquamish Tribe on behalf of the state. In the compact, the state gives its own interpretation of the Wilkinson statement, writing that “[t]hat memo effectively treats tribal governments the same as state governments in the decision to legalize marijuana.”

Hilary Bricken’s provides her analysis, “The Suquamish Marijuana Compact: First in the State, First in the Nation”:  http://www.cannalawblog.com/the-suquamish-marijuana-compact-first-in-the-state-first-in-the-nation/

Economy of Scale - The cost advantage that arises with increased output of a product. Economies of scale arise because of the inverse relationship between the quantity produced and per-unit fixed costs; i.e. the greater the quantity of a good produced, the lower the per-unit fixed cost because these costs are shared over a larger number of goods. Economies of scale may also reduce variable costs per unit because of operational efficiencies and synergies. Economies of scale can be classified into two main types: Internal – arising from within the company; and External – arising from extraneous factors such as industry size. – “Investopedia”

I am constantly asked “how can I expand my cannabis business across state borders?”  I am then forced to explain how the U.S. system of federalism works.  Even though medical and/or recreational use of cannabis may be legal in your state, it is not legal on a federal level.  Why?  This boils down to the same issue concerning banking for the cannabis industry – the Schedule I Classification of cannabis makes its possession, use, cultivation and/or sale a federally illegal activity.  Then logically following, from a federal perspective, the proceeds of activities involving Schedule I “drugs” are the proceeds of illegal activities. 

Constitutional law then forces us to examine two important issues – (i) Preemption and (ii) Interstate Commerce.  The “Supremacy Clause” states that state laws which conflict or contradict federal law, are null and void.  Federal law is therefore the “law of the land”.  So in essence, all state legalization of cannabis, in any category, will not be “legally” recognized by the federal government with respect to law enforcement.  These real battles are being fought every day in states that have legalized cannabis use.  For the moment, the federal government seems to content to allow the great cannabis experimentation to continue, while occasionally issuing “safe-harbor” guidance that is quickly disregarded.