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California celebrates New Year with marijuana sales
LOS ANGELES: Californians may awaken on New Year’s Day to a stronger-than-normal whiff of marijuana as America’s cannabis king lights up to celebrate the state’s first legal retail pot sales.
The historic day comes more than two decades after California paved the way for legal weed by passing the nation’s first medical marijuana law, though other states were quicker to allow the drug’s recreational use.
From the small town of Shasta Lake just south of Oregon to San Diego on the Mexican border, the first of about six dozen shops licensed by the state will open Monday to customers who previously needed a medical reason or a dope dealer to score pot.
In November 2016, California voters legalised recreational marijuana for adults 21 and older, making it legal to grow six plants and possess an ounce of pot. The state was given a year to set retail market regulations that are still being formalised and will be phased in over the next year.
“We’re thrilled,” said Khalil Moutawakkil, founder of KindPeoples, which grows, manufactures and sells weed in Santa Cruz. “We can talk about the good, the bad and the ugly of the specific regulations, but at the end of the day it’s a giant step forward, and we’ll have to work out the kinks as we go.”
The long, strange trip to get here has been a frustrating one for advocates of a drug that in the federal government’s eyes remains illegal and in a class with heroin.
The state banned “loco-weed” (crazy weed) in 1913, according to a history by the National Organisation for the Reform of Marijuana Laws, the pot advocacy group known as NORML. The first attempt to undo that by voter initiative in 1972 failed, but three years later felony possession of less than an ounce was downgraded to a misdemeanor.
In 1996, over objections of law enforcement, the drug czar under President Bill Clinton and three former presidents who warned it was an enormous threat to the public health of “all Americans,” California voters approved marijuana for medicinal purposes.
While the rollout of grassroots collectives of growers and dispensaries where marijuana could be sold to patients was at times messy, the law led to wider acceptance of the drug as medicine.
“The heavens didn’t fall,” said Dale Gieringer, director of California NORML. “We didn’t see increased youth drug abuse or increased accidents or crazy things happening as our opponents predicted.”
Today, 28 other states have adopted similar laws. In 2012, Colorado and Washington became the first states to legalise recreational marijuana. California is one of five states, plus Washington, D.C., that followed suit. Retail sales are scheduled to begin in Massachusetts in July.
With wider acceptance, the aroma of marijuana smoke has become more pervasive in parts of California, and use accelerated after the legalisation vote.
Even with other states as models for what works and what can go wrong as marijuana strains known as Sweet Skunk, Trainwreck and Russian Assassin hit the street, the next year is expected to be a bumpy one as more shops open and more stringent regulations take effect.
The California Police Chiefs Association, which opposed the ballot measure, remains concerned about stoned drivers, the appeal the drug will have for young people as it becomes more normalised, and the cost of policing the new rules in addition to an existing black market.
“There’s going to be a public health cost and a public safety cost enforcing these new laws and regulations,” said Jonathan Feldman, a legislative advocate for the chiefs. “It remains to be seen if this can balance itself out.”
For consumers, the most surprising revelation may be the dearth of places to get ganja. In theory, buying a joint, loose weed or a hash brownie should be as easy as finding a craft beer, but options are few as some cities have rejected retail sales and others have taken a more mellow approach toward licensing operations.
Pot-friendly San Francisco, a counter-culture hub where marijuana smoke has been a fixture for half a century, was late to establish local regulations and won’t have any retail outlets open for business until later in the week. It’s a similar situation in Los Angeles.
Meantime, Fresno, Riverside, Anaheim, Bakersfield and all of surrounding Kern County have prohibited pot shops, and Long Beach has a temporary ban.
For shop owners lucky enough to receive temporary licenses from the state and clear local red tape, anticipation is high.
Will Senn, founder of Urbn Leaf in San Diego, said the shop’s four phone lines have been ringing off the hook for three months, but he’s not sure what to expect when doors open at 7am (10pm Monday, Thailand time) with extra security and more than 60 employees at the ready for sales and deliveries.
“We’re preparing for the worst and hoping for the best,” Senn said. “We never want lines out the door and around the block. That’s not what we’re trying to accomplish here.”
Shops at first will be able to sell marijuana harvested without the regulatory controls that eventually will require extensive testing for potency, pesticides and other contaminants. A program to track all pot from seed to sales also will be phased in, along with other protections such as child-proof containers for pot products.
Pot shop founder Jamie Garzot said she’s concerned that when the current crop dries up, she’ll encounter a shortage of marijuana that meets state regulations. The irony is that her 530 Cannabis shop in Shasta Lake is close to some of California’s most productive growing areas, yet most of the surrounding counties won’t allow cultivation that could supply her.
“Playing in the gray market is not an option,” Garzot said. “California produces more cannabis than any state in the nation, but going forward, if it’s not from a state-licensed source, I can’t put it on my shelf. If I choose to do so, I run the risk of losing my license.”
In 2016, the state produced an estimated 13.5 million pounds of pot, and 80 percent was illegally shipped out of state, according to a report prepared for the state by ERA Economics, an environmental and agricultural consulting firm. Of the remaining 20 percent, only a quarter was sold legally for medicinal purposes.
That robust black market is expected to continue to thrive, particularly as taxes and fees raise the cost of retail pot by as much as 70 percent.
Matt Brancale, 47, a marijuana user since the 1980s and a connoisseur of the plant’s flowery buds, said he welcomes regulations that will bring a higher-quality product because of required testing. But he fears the price could spike once the government takes its share, and worries that revenue will be misspent.
“I also don’t want to get taxed to the teeth on it,” he said. “Are they going to try to squeeze every last ounce of tax revenue out of it? I assume they will. There’s people that are drooling in Sacramento with the potential resource money.”
Outtakes from cannabis panel's draft rules
The Berkshire Eagle
In draft rules published online Dec. 21, the state’s Cannabis Control Commission spells out how it proposes to regulate adult use of cannabis.
Its stated mission is to “grant licenses with the goal of ensuring that the needs of the Commonwealth are met with regard to access, quality, and community safety.”
The rules must be made final by March 15, after public hearings across the state.
They cover all aspects of the new business, from the licensing process itself to how growing facilities operate, how sales can be conducted, how marijuana is transported and inspected for quality and how the state will handle compliance and enforcement issues and appeals.
Here are a few noteworthy outtakes:
– While the rules would allow “social use” in public spaces, including yoga studios or movie theaters, the panel said no to smoking. It did not, however, rule out vaping, in which products are heated to the point of generating vapors, but not actually ignited. That may be clarified.
– The commission can send a “Secret Shopper” into outlets to buy cannabis for testing, then use the results in evaluating the retailer.
– Retail outlets that sell to both the medical and recreational markets must have a “physical barrier” between those types of customers.
– Priority will be given to applicants in support of an “Economic Empowerment” program. Those applications will be reviewed ahead of some others.
– Logos cannot show medical symbols or images of marijuana or marijuana paraphernalia. “Colloquial references to cannabis and marijuana” are barred.
– License-holders cannot sponsor charitable or sporting events, unless 85 percent or more of participants are over age 21.
– Fees charged cultivators are set by tier, based on the square footage of area under “canopy.” To expand in a later year from one tier to another, the license-holder must show that it sold over 85 percent of its product in the last six months.
– Fees for retailers are higher for brick and mortar stores ($5,000) than for delivery-only operations ($2,500).
– No vehicles can be equipped with loudspeakers to advertise cannabis products. And outlets cannot use pop-up ads online to sell products.
– In packaging edible cannabis, no single serving can contain more than 5 milligrams of THC, the psychoactive ingredient.
– Transport manifests for shipping cannabis must be kept in triplicate.
– Labels must say, in capital letters, “KEEP THIS PRODUCT AWAY FROM CHILDREN.” Products must also say: “Please Consume Responsibly.” Labels must also list known health risks.
– While retailers may advertise, under some restrictions, they cannot “promote the diversion of marijuana or marijuana use in individuals under 21.”
The above are all in the 107 pages of draft rules.
But this is not: The commission voted 3-2 against the idea of allowing for marijuana event licenses, for things like “weed weddings” or “pot and paint” nights.
Larry Parnass can be reached at email@example.com, at @larryparnass on Twitter and 413-496-6214.
If you’d like to leave a comment (or a tip or a question) about this story with the editors, please email us. We also welcome letters to the editor for publication; you can do that by filling out our letters form and submitting it to the newsroom.
Three Sacramento dispensaries can sell recreational marijuana on Monday
Maybe you want to participate in the historical moment, the day when the nation’s largest producer of cannabis becomes the country’s largest legal marijuana market.
Or maybe you just want to nurse a hangover from New Year’s Eve with a few tokes.
Whatever your reason, if you’re 21 or older, you can legally buy marijuana in Sacramento and other places in California starting today. As of Sunday afternoon, five dispensaries were permitted to sell recreational weed in Sacramento, and their owners raced to prepare for the new landscape on New Year’s Day.
“Are we ready for what’s going to happen? We’re not sure,” said Phillip Blurton, who owns All About Wellness in midtown Sacramento, which received state approval Saturday. “We don’t know if it’s going to be a rush of people. We really don’t know what to expect. We are fully staffed (Monday), it’s all hands on deck.”
While California was the first state to legalize medical marijuana in 1996, four states and Washington, D.C. preceded it as the first places to allow recreational weed for sale. The change means adult Californians no longer need a doctor’s recommendation to buy marijuana legally.
“This process has not been easy for anyone. Not for the state, the city, the industry or the medical patients,” said Kimberly Cargile, owner of A Therapeutic Alternative in East Sacramento. “But we are getting there and Proposition 64 is now in full effect.”
A Therapeutic Alternative became the first dispensary in the city Friday to receive needed state and local permits to sell recreational cannabis. The dispensary will hold a ribbon-cutting ceremony 9 a.m. Monday.
All About Wellness was jammed with customers Sunday as medical users tried to get their last purchases before new taxes kick in Monday. There was a line of about 10 people at the counter inside and a steady stream of people coming in and out the front door. Blurton said he’s planning to have two lines on Monday, one for patients, the other for recreational buyers.
“It’s nice to be one of the first dispensaries in California to have a medical and an adult use recreational license,” Blurton said. “Now we just have to be prepared.”
California’s 2016 legalization vote gave local governments the power to ban sales, making local politics the deciding factor in where retail weed is available. So far, most of the approved retail marijuana shops are in coastal communities and in the southern California desert.
Before the state released an updated list of approved retail outlets late Friday, there was only one approved retail store in the Central Valley – an area as long geographically as Florida.
Now, there are five dispensaries in Sacramento with state and local permits; besides A Therapeutic Alternative and All About Wellness, Northstar Holistic Collective, Abatin Wellness Center and Alpine Alternative can open for sale.
State and city regulators worked through the weekend to get permits approved by New Year’s Day, as required under Proposition 64.
Sacramento pot czar Joe Devlin has approved 10 dispensaries for retail sales – leaving five that had yet to receive state approval as of Sunday afternoon.
Still, Devlin had nothing but praise for the state Bureau of Cannabis Control, which is responsible for the state’s retail marijuana licensing.
“The state has been a great partner. We have worked closely together to make a complicated process as smooth as possible,” said Devlin, adding that he has been working directly with bureau chief Lori Ajax to “make sure the right people are getting permits.”
The approval process in Sacramento and many other places was compressed into one month. That’s because the state and the city of Sacramento did not approve regulations for retail sales until late November. The state regulations govern everything from how marijuana can be grown, shipped and manufactured into various products. Many acknowledge that it could take a year or longer for the system to work smoothly.
Calfiornia has issued more than 300 licenses across the state, according to Alex Traverso, spokesman for the Bureau of Cannabis Control.
“There’s a lot more to do, but it’s been a really good start,” Traverso said.
If you plan to buy recreational weed Monday, here are some things to know:
▪ You need a valid ID or driver’s license from any state to purchase cannabis from a dispensary. You also need cash as dispensaries generally don’t accept credit or debit cards.
▪ You cannot consume marijuana at a dispensary or at any other public location. You can imbibe at home, assuming you own it or have your landlord’s permission.
▪ It is illegal to drive under the influence of cannabis. While there is quite a bit of dispute about what constitutes impairment under the influence of weed, best to play it safe, especially on New Year’s Day when law enforcement steps up traffic patrols.
▪ If you’re a newbie, take the time to talk to dispensary staff about your experience and what kind of high you want. Their experience working with medical marijuana patients has given them knowledge about the different effects of cannabis.
▪ Start slow – today’s weed is much stronger than it was in the past. If you want to smoke it, you can buy anything from a gram to an ounce of buds or you can buy joints (called “pre-rolls” these days.) Take a toke or two and see how you feel before continuing. With edible marijuana products, only eat as much as recommended by a dispensary. It can take a while for edibles to kick in.
As of Sunday afternoon, these dispensaries in Sacramento were approved by state and city regulators to sell recreational marijuana starting New Year’s Day.
▪ Abatin Wellness Center, 2100 29th St., Sacramento, (916) 822-5699
▪ All About Wellness, 1900 19th St., Sacramento, (916) 454-4327
▪ Alpine Alternative, 8112 Alpine Ave., Sacramento, (916) 739-6337
▪ A Therapeutic Alternative, 3015 H St., Sacramento, (916) 822-4717
▪ Northstar Holistic Collective, 1236 C St., Sacramento, (916) 476-4344
Sources: California Bureau of Cannabis Control, City of Sacramento
Marijuana legalization could be on 2018 ballot
By Jan. 1, 2019, recreational marijuana use could be fully legal in North Dakota.
The North Dakota Marijuana Legalization and Automatic Expungement Initiative is a measure under consideration by residents. It calls for removing hashish, marijuana and tetrahydrocannabinol from the list of Schedule I controlled substances in the North Dakota Century Code.
At the same time, the measure would add penalties for individuals under age 21 who are either in possession of marijuana, attempting to distribute marijuana or distributing marijuana to anyone under the age of 21.
“The goal is decriminalize, legalize, taxation and regulation,” said U.S. Senate candidate Dustin Peyer.
Peyer intends to replace Sen. Heidi Heitkamp as North Dakota’s 2018 Democratic Senate candidate. The Driscoll, North Dakota, firefighter’s campaign platform includes “ending the failed War on Drugs.”
“Prohibition only makes drug cartels more powerful, increases crime and makes drugs more dangerous due to lack of enforced safety standards,” Peyer said on his website. “While most users range from recreational to moderate, rehabilitation and treatment should be provided for people struggling with addiction. Additionally, those serving time for nonviolent drug offenses should be pardoned.”
According to Peyer, he stands with the North Dakota Marijuana Legalization and Automating Expungement Initiative. He is a member of the initiative’s sponsoring committee, which consists of
28 men and women.
“(The initiative) will not only legalize a small amount of marijuana but will allow for taxation to not exceed alcohol and remove peoples’ prior non-violent criminal offenses. This does not prohibit employers from giving drug tests as it would be no different than if you came to work drunk,” Peyer continued.
For Peyer, decriminalization along with a better, more modern universal healthcare system is key to the future of America.
“(We must) provide a comprehensive rehabilitation coverage program to allow chemically addicted citizens to become effective people in society,” he said. “(We must also stop) the pharmaceutical companies from pushing opioids onto our family physicians as their personal salespeople.”
North Dakota Secretary of State Al Jaeger has approved the petition for the North Dakota Marijuana Legalization and Automating Expungement Initiative.
“The sponsoring committee pushing the proposal will need to gather at least 13,452 qualified signatures by July 9 to place the measure on the general election ballot next November,” the Grand Forks Herald reported Saturday, Dec. 16.
In November 2016, nearly 64 percent of North Dakota voters approved Initiated Statutory Measure No. 5. The measure was proposed to allow North Dakota residents suffering from certain qualifying conditions to use medical marijuana if their doctors recommend it. According to state Sen. Larry Luick, R-District 25, early implementation was challenging.
“Department of Health personnel, Luick said, are pulling their hair out over the difficulties in facilitating this use,” the Daily News reported in February 2017.
Initiated Statutory Measure No. 5 has been rewritten in 2017, the Grand Forks Herald reported.
Sunday morning shopping?
Will it be possible to go shopping in North Dakota between 12 a.m.-12 p.m. on a Sunday? Supporters of the North Dakota Repeal Sunday Retail Closing Law Initiative hope so.
“This initiated measure would repeal two sections of the North Dakota Criminal Code that prohibit businesses from operating between the hours of midnight and noon on Sunday and would repeal a section to provides an exception for 39 specified businesses during those hours,” states a petition for the measure.
In addition, the measure would amend a section of North Dakota law by removing the prohibition on contracts that require a business to open on Sunday. This removal would be effective for contracts made on or after Jan. 1, 2019.
“We believe that it should be the right of all private business owners to choose when they wish to operate,” stated the advocacy group North Dakota Open on Sundays on its website. “This includes businesses everywhere, regardless of their proximity to a state border.”
For North Dakota Open on Sundays, it is hypocritical of a state government to pick and choose which businesses can and cannot decide for themselves when to be open to the public.
“North Dakota does’t dictate to farmers when to farm, hospitals when to practice medicine or restaurants when to feed people. We do not believe it should dictate to any business owners when they can sell their goods and services,” North Dakota Open on Sundays continued.
Supporters of the the North Dakota Repeal Sunday Retail Closing Law Initiative have pointed out that repealing the “blue law,” as it is known, would not force businesses to be open on Sunday mornings.
“To the contrary, repealing this law allows those that wish to be open to do so while permitting those that wish to close to do so,” North Dakota Open on Sundays stated. “Repealing this law also does not force consumers to patronize these businesses on Sunday morning.”
According to the legislature website Ballotpedia, it will take 13,452 signatures to get a public vote on the North Dakota Repeal Sunday Retail Closing Law Initiative. Those signatures are required by Feb. 12, 2018 for a vote on June 12, 2018. They are required by July 9, 2018 for a vote on Nov. 6, 2018.
Nearly a year ago, on March 15, 2017, the North Dakota Senate voted 25-22 against House Bill 1163, which would have lifted the blue law. The bill had narrowly passed, 48-46 in the House.
“I respect the want to keep Sunday mornings for churchgoing and being with family, but at the same time, I am concerned for our brick and mortar stores,” North Dakota Rep. Alisa Mitskog, D-District 25, said previously. “Not only are they competing with online shopping, but we have to consider that Wahpeton itself is a border city. I want us to do whatever we can for our local businesses.”
As the elections draw closer, look to the Daily News for updated coverage of North Dakota and Minnesota’s campaigns, candidates and items under consideration.
Legal Adult-Use Sales In The World's Largest Marijuana Market Start Monday
By Phillip Smith
The world’s largest legal marijuana economy gets underway on January 1, as California’s voter-approved law legalizing recreational marijuana commerce goes into effect. It’s been legal to possess and grow small amounts of weed since shortly after votes passed Prop 64 in November 2016, but as of New Year’s Day, we see the unleashing of what is expected to be a $7 billion a year state cannabis industry.
But in a state of 39 million, only a few dozen shops are expected to be open for business on day one, and major cities such as Los Angeles and San Francisco won’t be among them. That’s because sellers have to have both a local permit and a state license, and few localities have completed their permitting procedures. San Francisco is among those but it’s still not quite going to be ready on day one. Expect recreational marijuana sales to begin there within a matter of days, though.
“It is going to take a while to get these businesses up and running,” said Lori Ajax, who runs the California Bureau of Cannabis Control. “We’re asking people to be patient.”
Among the major cities that will have recreational pot shops open on day one are Berkeley, Oakland, San Diego, and San Jose. This interactive map charts all of the approximately 40 shops that will be open on January 1.
According to the Bureau of Cannabis Control, San Diego and San Jose will have the most stores open, with seven each, while two will be open in Berkeley and one in Oakland. Other pot shops open on January 1 are scattered across the state, from Mt. Shasta, Shasta Lake, Eureka, and Ukiah in the north, down to Santa Cruz on the coast, Palm Springs in the Southern California interior, and Woodlake, the only shop open in the entire Central Valley.
Medical marijuana dispensaries that have not applied for and received licenses for recreational marijuana sales will remain limited to serving customers with patient IDs.
While January 1 marks the beginning of the era of recreational marijuana sales, that doesn’t mean California is turning into the Wild West of weed. The state has a reputation for being highly regulated, and that’s no different when it comes to marijuana. Here are some of the things you can’t do with legal marijuana in the Golden State:
- You can’t purchase or possess more than an ounce, unless it’s from your personal grow.
- You can’t smoke it in public in most places, including bars and restaurants. Anywhere cigarette smoking is prohibited, pot smoking is prohibited. And if you’re a renter, your landlord can ban pot smoking on the premises.
- You can’t get stoned while driving. Getting caught toking up behind the wheel will get you a $75 ticket, but if the cops think you are too high, you could also end up getting busted for driving under the influence, and that’s a whole lot more than a $75 ticket.
- You can’t use marijuana’s state-legal status to prevent your employer for firing you for smoking pot, even off the job.
People purchasing legal recreational marijuana will be contributing mightily to the state’s coffers. In addition to the state sales tax of 8% and any local sales taxes — some localities plan sales taxes of up to 10% — a 15% excise tax on wholesale purchases by retailers will be passed on to consumers. This could end up putting a billion dollars a year in the state and local treasuries.
It could also make the state’s existing black market more attractive to consumers. If Californians accustomed to buying their weed in the informal sector are faced with higher prices in shops than they can get from the guy down the street, they might just stay with the guy down the street.
And product shortages could also drive up prices, at least in the short run. While the state produces massive amounts of marijuana – an estimated 13.5 million pounds each year – up to 80% of that is destined for the black market, either for export to prohibitionist states or sold informally in-state. With permitting and licensing of producers for the legal recreational market at a very early stage, supply bottlenecks are likely to develop, leading to empty shelves, as they did in Nevada in 2017.
Still, California is now entering a Brave New World of legal marijuana. And with the nation’s most populous state embracing legalization, there is probably no going back, regardless of what Washington thinks.
Anticipation High as California Rolls Out Retail Pot Sales
[unable to retrieve full-text content]22, 2017 photo, Dale Gieringer of NORML (National Organization for the Reform of Marijuana Laws) poses for photos at his house in Berkeley, Calif. Californians may awake on New Year's Day to a familiar scent in greater-than-normal concentrations. A whiff of marijuana will likely be in the air as the …
Source: Anticipation High as California Rolls Out Retail Pot Sales
3 Pressing Questions for the US Marijuana Industry in 2018
There have been few, if any, industries hotter than legal marijuana in the stock market this year. A majority of publicly traded marijuana stocks with a market cap of $200 million or greater have seen their valuations at least double over the past year.
Topping the list of catalysts behind these gains have been robust sales growth figures and growth projections. For instance, Marijuana Business Daily‘s newest report, “Marijuana Business Factbook 2017,” suggests that legal weed sales could grow by 30% in the U.S. in 2017, another 45% in 2018, and by an aggregate of 300% between 2016 and 2021 to $17 billion. With few industries demonstrating such consistent growth, marijuana stocks have become a favorite of U.S. investors.
We’ve also seen a major shift in the way the public views cannabis. Gallup, which has been surveying the public on pot for nearly 50 years, reported that a record number of respondents (64%) are now in favor of seeing marijuana legalized, as of October 2017. Comparatively, just 25% of respondents felt this way back in 1995, the year before California became the first state to legalize medical cannabis for compassionate use cases.
Despite all of this, cannabis remains an illegal (Schedule I) substance at the federal level, constraining the ability of U.S.-based pot companies to succeed.
With this in mind, here are the three most pressing questions for the U.S. marijuana industry heading into 2018.
1. Will Jeff Sessions tee off on the marijuana industry?
Probably the biggest question on the minds of the entire pot industry is what’s going to happen with Attorney General Jeff Sessions and his hell-bent quest to prosecute marijuana businesses currently operating in states that have passed legal weed laws?
Sessions has made no secret of his feelings about marijuana’s expansion. He’s been quoted as saying that “good people don’t smoke marijuana,” and has suggested that medical cannabis isn’t an appropriate substitute to fix the opioid crisis. In May, he sent a letter to a few of his congressional colleagues requesting that they repeal the Rohrabacher-Farr Amendment. This is what disallows the Justice Department from using federal funds to prosecute marijuana businesses operating in legal states.
What’s worth noting is that this amendment, now known as the Rohrabacher-Blumenauer Amendment, was blocked from vote by the GOP-controlled House Rules Committee in September, leaving it out of federal budget discussions at the time. This amendment needs to be approved each year in order to keep the Justice Department from using federal dollars to prosecute U.S. pot businesses. The Senate could always add it to their federal spending proposal, but the chance that it could be excluded from future federal spending bills is arguably higher than it’s ever been.
If Sessions were to get his way, it would essentially be the end of the legal weed experiment in the United States.
2. Will 280E reform gain any momentum?
Another pretty important question on the minds of investors is whether lawmakers on Capitol Hill will consider adjusting how marijuana businesses are taxed.
According to U.S. tax code 280E, a more than three-decade-old rule on the tax books, companies that sell federally illegal substances are disallowed from taking normal corporate income-tax deductions. Essentially, any pot businesses that manages to turn a profit is often paying an effective tax rate of between 70% and 90% on that profit as opposed to the 15% to 30% most “normal” businesses would pay. When compounded with their inability to receive basic banking services, including something as simple as a checking account, you can get a better understanding of why U.S. marijuana companies are struggling to get ahead.
During the GOP’s discussion of its tax proposal in the Senate in late November, Sen. Cory Gardner (R-Colo.) submitted an amendment that would have modified 280E to exclude marijuana companies, providing them with more capital to create jobs, expand, and reinvest. However, the amendment never even came to vote, with Gardner not convinced he had enough support for the measure. It’s worth noting that Gallup’s October 2017 poll was the first time ever that more Republican respondents favored legalization (51%) than did not.
Perhaps the biggest issue is the $1.5 trillion deficit the new GOP tax law is expected to ring up over the next 10 years. The federal government presumably needs every drop of tax revenue it can get. Therefore, if it can continue to pilfer extra funds from the marijuana industry as a result of an archaic tax rule, then it’s likely to continue to do so, in my opinion.
3. Which states have a real shot at legalizing recreational weed?
Lastly, optimists want to know which states are the likeliest to legalize recreational marijuana next. No offense to the medical cannabis movement, but with 29 states having already legalized, the patient pool and primary growth drivers involves recreational weed approvals at this time.
One of the likeliest candidates looks to be Arizona, which narrowly failed to pass Prop. 205 by a mere 2% in November 2016. It’s worth remembering that California and Oregon both failed to pass recreational weed laws on their first go-around, while Florida also failed to pass its medical cannabis amendment by roughly 2% in 2014. Such close defeats often serve as bull’s-eyes for pro-legalization groups to focus their efforts, making Arizona a likely candidate to legalize in the November 2018 elections.
Another state that’s vaulted onto the list of likely to legalize is tax-heavy New Jersey. Democrat Phil Murphy beat out Republican Lt. Gov. Kim Gudagno for Chris Christie’s seat in November, and Murphy has stated that he’d sign adult-use legislation if it reached his desk. New Jersey’s predominantly progressive legislature, which is always in need of additional funding for its budget, appears likely to put cannabis legislation together in 2018 for Murphy’s signature.
Even Michigan could get in on the action after more than 360,000 signatures were collected in favor of putting an initiative on the November 2018 ballot. That’s more than 100,000 signatures over what needed to be collected, and it demonstrates the support Michigan residents appear to have for legalizing adult-use pot.
The more states that give the green light to marijuana, the more sway pro-legalization advocates may have with a conservative Congress.
The Motley Fool has a disclosure policy.
Vermont Lawmakers Expected to Resume Marijuana Debate
[unable to retrieve full-text content]MONTPELIER, Vt. (AP) — Vermont lawmakers are expecting to resume the debate about whether the state should become the first in the country to legalize the recreational use of marijuana through an act of a legislative body in the opening days of the 2018 legislative session, which begins Wednesday …
Source: Vermont Lawmakers Expected to Resume Marijuana Debate
Retail sector casualties, medical marijuana among top 2017 business stores
Few single stories stood on their own this year.
No, 2017 was a year for trends and themes in local business.
Online retail continued to chill traditional bricks-and-mortar shopping. Unemployment fell at least one percentage point as the regional economy strengthened. Developers both local and out of state eyed Lackawanna County as a place to grow, and business leaders laid bait for one of the nation’s largest and fastest-growing online retail companies.
The Times-Tribune, a Times-Shamrock newspaper, and the Greater Scranton Chamber of Commerce collaborated to assemble these top 10 business stories of the year.
Pennsylvania ushered in a brand new industry, and Lackawanna County will get its own slice of the pie. Pennsylvania Medical Solutions, a company with roots in Minnesota and an affiliate in New York, received state approval to grow medicinal marijuana at a facility in Scranton’s Green Ridge section. The company promises to bring about 30 good-paying jobs. Columbia Care Pennsylvania LLC received one of four dispensary permits for the state’s northeast region and plans to set up shop on North Keyster Avenue in Scranton.
Luring a giant
Amazon said, “Jump.” The entire continent asked, “How high?” As leaders of the online retail giant seek real estate for a second headquarters, they laid out a hefty wish list for cities to meet in exchange for a potential $5 billion in investment and 50,000 high-paying jobs over the next 10 to 15 years. Five northeast counties — Lackawanna, Luzerne, Monroe, Schuylkill and Wayne — submitted a joint proposal, the first concerted pitch of its kind, officials said. Project lead John Augustine of the cooperative group Penn’s Northeast admitted to facing long odds, but said that Amazon’s contest offered a unique and invaluable chance to practice, and helped craft a template for attracting larger companies. Amazon is expected to announce which of the 238 proposals wins its favor in 2018.
Unemployment hit 5.2 percent in October in the Scranton/Wilkes-Barre/Hazleton metro area, down a whole percentage point from the year before, the most recent data shows. Though a few steps behind, the local joblessness decline stayed in step with the national rate, which was 4.1 percent at last check. Unemployment, long considered a gauge for economic health, doesn’t include people who have left the workforce altogether, and some debate whether it’s an accurate benchmark. The figure also misleadingly counts workers who work part-time, but want a full-time job, and those who work full time but still don’t earn a living wage. Some economists say, as the nation nears full employment and the available workforce shrinks, wages will inevitably rise.
A number of big-box stores slammed their doors for good in an abysmal year for former strongholds. Radio Shack, Gander Mountain, Kmart and Payless ShoesSource and Gymboree, all losing sales to online shopping, closed some or all of their stores. Toys R Us filed for bankruptcy, though it appears the local retail stores in Dickson City and Wilkes-Barre Twp. will be spared in a restructuring. To combat shifting consumer preferences, Lackawanna County’s two shopping malls underwent major facelifts with the Marketplace at Steamtown making headway on several new projects. At the Viewmont Mall, Dick’s Sporting Goods, Field & Stream and Home Goods assumed space in the former Sears, and rebranded the outside-facing entrances in line with industry trends.
Marketplace at Steamtown
After Marketplace at Steamtown’s owner blew past a number of idealistic, albeit self-imposed deadlines to make changes at the mall, things started taking shape toward the end of the year. Just in time for Christmas, the Scranton Public Market, an open vendor area in the former food court, opened with its first tenants. Construction on Londyn’s, a first-floor restaurant that faces Lackawanna Avenue, picked up the pace, and the Electric City Aquarium and Reptile Den received delivery of massive tanks for its exhibits. The former Mall at Steamtown was sinking fast before owner John Basalyga bought it in 2015 at auction for $5.5 million. Since then, he’s attracted a several non-retail tenants to take replace of departed big-box stores.
On Penn and Lackawanna avenues, developers reimagined empty old commercial buildings that darkened streetscapes for years. With plans for new apartments and retail space, they scooped up or moved on ambitious construction projects to feed a growing demand for downtown living and shopping options. A number of businesses followed developer Arthur Russo’s lead on Penn Avenue’s 300 block, where he refurbished several old buildings for high-end apartments and shops. Some opened this year. More are planned to open soon. D&D Realty Group purchased the old SNB Plaza building at Lackawanna and North Washington avenues for $1.1 million. A block away, New York City developer Shimon Friedman bought the Oppenheim and Lewis & Reilly buildings where he plans apartments and offices. And at the corner of Lackawanna and Penn avenues, businessman Charles Jefferson began work on what will one day become Samters Lofts with 24 one-bedroom apartments with commercial units on the first floor.
All three of Scranton’s hospitals announced big plans for the coming years. Commonwealth Health began work on an $80 million expansion and development project to reshape and physically connect Regional Hospital of Scranton and its uphill neighbor, Moses Taylor Hospital. Commonwealth had been buying and demolishing homes on the two blocks between the hospitals for years, and it was widely suspected that the health system would build a single super hospital. In April, officials finally confirmed plans for the Commonwealth Health Scranton Campus. Meanwhile, on the other side of town, Geisinger Health System officials say they’ll spend $15 million to bring back baby delivery and maternity care at Community Medical Center and make other improvements. For the last decade, Moses Taylor, a competing hospital, was Lackawanna County’s only baby-delivery hospital.
A number of expanding companies settled on Lackawanna County to host their growth. Socafe Coffee Roasters of New Jersey bought an old silk mill in Dunmore. LBP Manufacturing of Chicago occupied space in the Valley View Business Park emptied when military contractor BAE Systems left in 2015. Real estate and business development experts say there’s a growing interest in Northeast Pennsylvania for its nearness to big cities, low taxes and stable workforce. Scranton-based Pasqualichio Brothers Inc., a family-owned meat packing company, bought five acres from the Scranton Lackawanna Industrial Building Co.’s where it is building a new plant. The company will add 10 to 15 new employees over the next few years.
Banks track growth
Every local bank posted growth this year, marking it with higher earnings and higher dividends to shareholders. The parent companies of two banks, Fidelity D&D Bancorp, based in Dunmore, and Dimeco Inc., based in Honesdale, split their stock. The financial maneuver that makes it easier for potential investors to buy shares, and potentially adds value to for existing shareholders. The growth of local banks appears to be bucking a national trend. At a hearing last month before the congressional Joint Economic Committee, Federal Reserve Chairwoman Janet Yellen said that a tough regulatory environment and low interest rates have pushed community banks to close at an alarming rate.
State and city road crews resurfaced key streets in downtown Scranton this year, dramatically smoothing over deteriorated roadways. Some schools of thought say road conditions are tied to property values. At the very least, smoother roads ease commerce and commuting. “Downtown Scranton is an important hub in the movement of both people and goods throughout our region,” said Scranton chamber President Bob Durkin. “The mayor and council should be commended for investing in the city’s infrastructure as a foundation for economic development.”
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