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Photograph by Frederic J. Brown / Getty Images
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Canadian cannabis companies have the easy task. Since October 17, they are able to sell marijuana to adults under a single national law. The major US stock exchanges are happy to list Canadian producers as
Cover growth
(symbol: CGC) and
Tilray
(TLRY).
It's harder for American cannabis companies. US federal law still considers marijuana an illegal drug of the same class as heroin. Any financial service provided to a cannabis business may violate federal law. Thus, bankers of the Federal Reserve, not to mention the New York Stock Exchange and Nasdaq, will not touch a US company related to the cannabis plant. Weed plants can not even deduct their business expenses under the US tax code.
Fortunately, we have federalism. Since the legalization of marijuana for medical purposes in California in 1996, 32 more states, as well as the District of Columbia, have licensed marijuana for medical purposes. Now 10 states allow recreational use. However, each state does it differently, so multi-state operators such as Curaleaf (CURA.Canada) and Acreage (ACRG.U.Canada) have to navigate their way through a regulatory obstacle course. And their shares can only be traded on the Canadian stock market or the Canadian stock market.
OTC Group
in the USA.
Nobody expects the United States to legalize the pot soon. But some federal initiatives are trying to let states act. A Wednesday hearing before a subcommittee of the House Financial Services Committee examined the SAFE Bank Act, a bill that would allow banks to legally manage the proceeds of a legally authorized cannabis business. "Thousands of employees and businesses across the country have been put at risk because they are forced to manage tons of money, while Congress remains unmoved," said the project's co-sponsor. law, Ed Perlmutter (D., Colo.).
A patchwork of regulation
In the absence of federal approval, US companies face different rules in virtually every state. Here are state-by-state comparisons.
Decriminalization approved by the State
and limited medical access
State approved recreation /
retail and medical
Approved state
decriminalization
Limited approved state
medical access
Decriminalization approved by the State
and medical
State approved recreation /
retail and medical
Limited approved state
medical access
Decriminalization approved by the State
and medical
Decriminalization approved by the State
and limited medical access
Approved state
decriminalization
"American voters have spoken," said Perlmutter, "and you can not put the genie back in. The ban is over."
A broader federal reform would result from the US law, proposed in June 2018 by Sens. Cory Gardner (R., Col.) and Elizabeth Warren (D., Mass.). It would exclude cannabis from most federal drug laws, states that have legalized it. The SAFE Bank Law could get a vote this year, but Congress is unlikely to seriously consider US law until next year, said Troy Dayton, head of the Cannabis Investment Research Group, Arcview Group.
Meanwhile, legalization continues to spread across states. Last November, voters in Missouri and Utah approved marijuana for medical purposes, while Michigan added marijuana to its hobbies. New York, New Jersey and Illinois do not have an electoral referendum, but their governors have said they want legislation to legalize recreational sales. Supporters gather signatures for public initiatives in Florida, Arizona and Ohio on the recreational pot.
Municipalities also have a say. In Massachusetts, the state's Cannabis Control Commission assesses the suitability of licensees, says Commissioner Shaleen Title, but each municipality can vote on the number of cannabis establishments it wants.
Write to Bill Alpert at [email protected]
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