Federal law prohibits the possession of any amount of cannabis (MJ)
By Richard Mario, Buckley Law P.C.
Twenty-three states and the nation’s capital, (DC), have legalised medical MJ. Four states and DC have legalised MJ for recreational use.
The federal government’s rules allow banks to do business with MJ operations. The regulations require that the banks acquire significant information about the customers, vendors, staff and business practices of MJ organisations.
Banks have declined. Consequently, MJ operations have no banking relationships. Lenders will not loan to a business whose income is from MJ operations. Neither the crop nor the inventory is acceptable collateral. Lenders will not make a loan to purchase a building that will be used for MJ operations.
Currently, the purchase can only be transacted with cash. Owners who rent warehouse or retail space to MJ operations are taking extra risks, as the MJ trade is still a federal crime. The federal government has taken the position that, if they find MJ is going to the black market, they may seize the buildings. Rent will be paid in cash. Retail spaces also need expensive added security.
It is common for other business groups to lobby their local governments to deny licences to MJ operations. They want neither the business nor the customers in their neighbourhood. The common expectation is that the stigma and federal impediments to the MJ business will abate in the next five years. MJ operations are continuing to start up and thrive.
Richard MarioBuckley Law P.C., Portland, OR, USA
T: +1 503 620 8900
Richard Mario's Richard Mario’s practice at Buckley Law includes business, estate planning, and real estate litigation. His practice focuses on representing companies in all aspects of real estate disputes, and he handles all cases from simple to complex litigation with the focus on the clients’ needs. Richard has been the lead counsel on several multi-million dollar construction and development disputes and he engages in frequent land use, road right of way, and title dispute litigation. Richard is a certified ski instructor. He and his family enjoy skiing, mountain bike riding, and camping.
Published: October 2015 l Photo: Christian Müller - Fotolia.com