The weed industry is growing at an incredible rate, despite the anti-marijuana stance shown by the current Republican administration. If Attorney General Jeff Sessions had his way, federal law would usurp state legislature and cannabis would be completely illegal across the country. He would probably also throw weed users into his own version of Gulags, but that’s another story.
The latest figures show that the legal marijuana industry grew 33% in North America in 2017, and annual growth is expected to come close to 30% for the next three years in a row. The expected legalization of Mary Jane in Canada is a big reason for the growth, as the market remains clouded in uncertainty in the United States. This is primarily because President Donald Trump changes his mind about major issues about as often as the average person changes their mind in Subway.
Trump Flip-Flops Like Clockwork (Orange)
When he isn’t binge watching cable news on Fox & Friends, insulting CNN, or posting semi-literate Tweets, Trump is showing an astonishing inability to make his mind up about anything.
First, he declared that Obamacare was going to be repealed and replaced, then he declared that ‘certain aspects’ of it were okay, and now, no one seems to know what the hell is going on with healthcare in the U.S.
And as for his invisible wall across the Mexican border, there’s probably more chance of the Canadians building one first (to keep us Americans out).
Therefore, we shouldn’t be surprised when he continually changes his mind about the marijuana industry. While the market is flourishing (relatively speaking), it is falling well short of its true capacity because of his dithering and repeated mind-changing.
As you know, cannabis is currently a Schedule I classified substance which means clinical research into its benefits is almost impossible. Scientists have limited access to federally grown Mary Jane, which is nothing like the real thing in any case. Moreover, weed-based businesses have little or no access to basic banking services, and must pay an effective tax rate as high as 90% if they make a profit.
Meanwhile Sessions continues to try and hinder legislation at a state level. For example, he tried to get the Rohrabacher-Farr Amendment repealed back in 2017, which is an important law that prevents the Justice Department from using federal money to prosecute medical marijuana companies. Fortunately, common sense prevailed and Sessions was effectively told to get lost.
Trump Goes Pro Cannabis — Kind Of
In April, The Donald agreed to end a potential federal crackdown on legal cannabis firms in states where the herb is legal for recreational or medicinal use. In other words, he came down on the side of State’s Rights, which was (to put it mildly) pretty surprising for a lot of people. The deal was made with Republican Senator Cory Gardner (who represents the state of Colorado), and was met with a collective shrug of the shoulders among many in Washington.
Why was no one bothered about what Trump had to say about weed? Well first of all, his pronouncement was NOT in fact a change in policy; he merely outlined that he wouldn’t be continuing Sessions’ ridiculous campaign to spit on state legislature. And to be frank, no one in the industry cares what he says anyway unless there is some action – that is, if he decides that weed should be re-scheduled (or even de-scheduled) and takes steps to make it happen. Given the fact that he has been unable to push through legislation that his party wants, though, we seriously doubt he will make any effort to help the marijuana industry — unless of course he derives personal benefit from it.
The other main reason is that Trump has been known to change his mind depending on what mood he wakes up in, or what Fox & Friends seemingly has to say on a particular topic. During his Presidential Campaign in 2016, for instance, he claimed to be ‘100 percent’ behind legalizing medical marijuana, and also suggested that he had an ‘open mind’ to the notion of recreational weed (and to be fair, he did say that there needed to be extra clinical research on the benefits and risks of the herb).
His attitude towards cannabis turned markedly more negative once he became President and hired Sessions as Attorney General, with the possible knowledge that he could potentially become the 21st-century version of Harry Anslinger. While he has clashed with Sessions, as he has with many others, none of their arguments revolved around the AG’s ardent anti-cannabis stance.
Despite his initial claims to back the use of medicinal marijuana and its research, though, his negative stance resulted in Israeli Prime Minister Benjamin Netanyahu shelving plans to export medical weed into the United States – not a good thing at all for the general American cannabis industry.
Investors Are Steering Clear of the United State’s Domestic Marijuana Industry
If marijuana were legal in the United States, it would be the world’s most lucrative cannabis market by a distance and investors would be able to swim in a veritable pool of money. However, the utter lack of clarity means investing is far too risky. Even if Trump does the unlikely and follows through on his ‘plan’ to protect businesses in legal states from federal prosecution, it will do nothing for high tax rates or banking issues.
Moreover, certain states will be affected more significantly than others. For example dispensaries in Illinois are in serious trouble because of the aforementioned lack of banking options. The Bank of Springfield was the only such institution in Illinois that took deposits from dispensaries, without ripping them off with huge fees. Sadly, the bank announced that it was closing the accounts of dispensaries from the middle of May, 2018.
The reason? Fear that the Trump administration would begin prosecuting providers of medical marijuana and their bankers. A spokesman for the Bank of Springfield said as much in an April 3 statement. He said that the bank could not “jeopardize any of their customers by working with businesses that operate in the legal grey area.”
Now dispensaries in Illinois are at a loose end because there is only one bank left in the state that they can use. Unfortunately, it charges a whopping $100,000 a year for marijuana company accounts, and most firms are unable to pay such a ridiculous amount. These companies now have to store their cash in different ways, and a relative lack of security makes them a prime target for thieves.
So let’s face it, as long as Trump is President and Congress has a Republican majority, there is about as much chance of meaningful pro-cannabis laws being passed as there is of Trump showing genuine humility at any point during the rest of his life. If the Republicans are eviscerated in this year’s mid-terms, perhaps there will be a chink of light. Otherwise, we will have to wait until 2020 at the very least. And if the unthinkable happens and Trump is re-elected, well, we may just have to migrate north of the border… if they’ll let us in!
While the U.S. Struggles, the Canadian Marijuana Industry is Smiling
Imagine if there was a rival located right next door that was capable of crushing you underfoot – all they had to do to seize control was show a modicum of common sense. Now imagine that instead of this simple act, their staff were idiots that completely sabotaged everything and guaranteed you a free run in your industry.
That’s how the Canadian marijuana industry is potentially feeling right now. While there are nine American states (plus D.C.) where weed is legal for recreational use, Canada is about to go ten steps further and federally legalize it across the entire country beginning in July 2018. Admittedly, everything isn’t set in stone, but it is known that Canadians will be able to purchase their herb through private storefronts and online. It seems likely that the average price will be $10 a gram, which works out at a little over $280 an ounce; a more-than-reasonable price.
If marijuana remains legal at the federal level in the United States (which it will for the foreseeable future), it will benefit Canada immensely. The current state of affairs will prevent the rise of any large American cannabis companies, and will weaken any challenge to their Canadian equivalents who are looking to expand around the world.
Final Thoughts on Donald Trump and the Weed Industry
In many people’s opinion, the current Trump administration is staffed with people like Jeff Sessions who continue to hold ideas about marijuana that belong in the 1930s. These people believe that Trump is too weak, lazy and indecisive a person ever to try and push through legislation on anything – let alone an issue he has never shown an affinity for.
The marijuana industry will doubtless thrive in the major markets (such as Colorado and California), but in states like Illinois, there seems little chance that the law will change to the point where they can operate like a ‘traditional’ business.
It is disgraceful that even though a majority of Americans believe weed should be legalized on a federal level, it continues to be classified as a Schedule I substance – long after it became known that it doesn’t belong there. We certainly hope that The Donald’s policies offer some sort of a potential boost for the greater U.S. cannabis industry in the coming years, but as of right now, all we can basically say is thanks for nothing!