Prominent current and retired Republican lawmakers like John Boehner and Mitch McConnell have been capturing cannabis and hemp related headlines for the past month or so as public support continues to push to all-time highs.
Recently even President Trump himself … weighed in … on the topic, proclaiming that the Justice Department would not interfere with the legal cannabis industries in states like Colorado or Washington.
This had to be news to the head of the Justice Department, furious little elf-person and Attorney General Jeff Sessions, who just this past January made headlines of his own by rescinding the Obama-era Cole Memorandum that had, up until his interference, offered a branch of protection for state-run cannabis programs.
Well, as it turns out, Trump’s intentions were anything but honest or straightforward – SHOCKER right?
You see, a Republican Senator from Colorado named Cory Gardner knows exactly how popular cannabis has become to his voting constituents, so when the Feds starting talking tough, he flexed back and threatened to block DOJ nominations until the government stood down.
So, they have apparently stood down…for now.
So once again, this president is taking (and getting) credit for ceasing to threaten something that was doing just fine until he started threatening it in the first place *cough*DACA*cough*.
If you’re considering carving that combover into Mt. Rushmore though, consider this.
Without the headlines or the fanfare, the Trump administration on April 3rd quietly instituted some pretty major changes to how federally insured banking institutions deal with money from the cannabis industry.
Hell, as bad as it already was, it could only get better, right?
The U.S. Small Business Administration has clamped down lending laws nationwide on ANY business that derives ANY of its income from the cannabis industry in ANY way, despite the fact that medical and recreational cannabis are now legal in a majority of the states – MMJ is legal now in 29 states, recreational use is now legal in 9 states.
SBA lending rules had already blacklisted any companies directly involved in the weed biz, blatantly and openly discriminating specifically against “a business that grows, produces, processes, distributes, or sells marijuana or marijuana products, edibles, or derivatives, regardless of the amount of such activity. This applies to personal use and medical use even if the business is legal under local or state law.”
That is a shitty enough statute, but as of early April, their new stance takes it a disturbing step further, stating that no loans should be granted to any business that “derived any of its gross revenue for the previous year (or, if a start-up, projects to derive any of its gross revenue for the next year) from sales to Direct Marijuana Businesses of products or services that could reasonably be determined to support the use, growth, enhancement or other development of marijuana.”
What does this mean?
Think of states like Colorado or California where the booming cannabis industry has sprouted ancillary business for all sorts of previously non-cannabis-related companies involved in things like marketing, apparel production, packaging, legal services, etc.
Think of gardening supply stores that are guilty of nothing more than selling soil, now suddenly ineligible to get help to grow their own business all because of what some potential customer might potentially be potting.
Tradesmen like carpenters, electricians, HVAC – all in demand in the cannabis industry from the grow rooms to the showrooms, and all in danger of fiduciary discrimination.
Hell, even a harmless little weed reporter could feel the pinch.
Now anyone applying for an SBA loan will need to attest that they don’t get paid in cash that smells like Chemdog. But the SBA says it will advise it’s loan officers and underwriters to exercise extreme diligence and do their own background checks on applicant’s websites, marketing histories and accounts receivable records.
Sessions’ announcement in January spooked Wall Street investors who were tiptoeing into the weed sector of the market.
Trump’s alleged deal with Senator Gardner gave those same tentative investors a short-lived boost of optimism, but now the new SBA crackdown reaches beyond the actual cannabis industry, and can only harm the wider economy.
Investing in all of the ancillary – and completely legal – companies that tangentially support the cannabis industry was a relatively safe bet until this latest trip by Trump.
So if we are waiting for him to do the right thing about cannabis, we’d be wise to remember that Trump serves Trump. Our best bet is that his Wall Street pals can “convince” him to back off, or that some foil gum wrapper fluttering by in the breeze pulls his attention away from pot.