Banks Say No To Marijuana Money, Legal or Not

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In his second-floor office above a hair salon in north Seattle, Ryan Kunkel is seated on a couch placing $1,000 bricks of cash — dozens of them — in a rumpled brown paper bag. When he finishes, he stashes the money in the trunk of his BMW and sets off on an adrenalized drive downtown, darting through traffic and nervously checking to see if anyone is following him.

Despite the air of criminality, there is nothing illicit in what Mr. Kunkel is doing. He co-owns five legal medical marijuana dispensaries, and on this day he is heading to the Washington State Department of Revenue to commit the ultimate in law-abiding acts: paying taxes. After about 25 minutes at the agency, Mr. Kunkel emerges with a receipt for $51,321.

“Carrying such large amounts of cash is a terrible risk that freaks me out a bit because there is the fear in my mind that the next car pulling up beside me could be the crew that hijacks us,” he said. “So, we have to play this never-ending shell game of different cars, different routes, different dates and different times.”

Legal marijuana merchants like Mr. Kunkel — mainly medical marijuana dispensaries but also, starting this year, shops that sell recreational marijuana in Colorado and Washington — are grappling with a pressing predicament: Their businesses are conducted almost entirely in cash because it is exceedingly difficult for them to open and maintain bank accounts, and thus accept credit cards.

The problem underscores the patchwork nature of federal and state laws that have evolved fitfully as states have legalized some form of marijuana commerce. Though 20 states and the District of Columbia allow either medical or recreational marijuana use — with more likely to follow suit — the drug remains illegal under federal law. The Controlled Substances Act, enacted in 1970 classifies marijuana as a Schedule I drug, the most dangerous category, which also includes heroin, LSD and ecstasy.

As a result, banks, including state-chartered ones, are reluctant to provide traditional services to marijuana businesses. They fear that federal regulators and law enforcement authorities might punish them, with measures like large fines, for violating prohibitions on money-laundering, among other federal laws and regulations.

“Banking is the most urgent issue facing the legal cannabis industry today,” said Aaron Smith, executive director of the National Cannabis Industry Association in Washington, D.C. Saying legal marijuana sales in the United States could reach $3 billion this year, Mr. Smith added: “So much money floating around outside the banking system is not safe, and it is not in anyone’s interest. Federal law needs to be harmonized with state laws.”

The limitations have created unique burdens for legal marijuana business owners. They pay employees with envelopes of cash. They haul Chipotle and Nordstrom bags containing thousands of dollars in $10 and $20 bills to supermarkets to buy money orders. When they are able to open bank accounts — often under false pretenses — many have taken to storing money in Tupperware containers filled with air fresheners to mask the smell of marijuana.

The all-cash nature of the business has also created huge security concerns for business owners. Many have installed panic buttons for workers in the event of a robbery and have set up a constellation of security cameras at their facilities beyond what is required, as well as floor sensors to detect break-ins. In Colorado, Blue Line Protection Group was formed a few months ago, specializing in protecting dispensaries and facilities that grow marijuana, and in providing transportation security. The firm largely uses military veterans who have Special Operations experience.

Marijuana business owners have devised strategies to avoid the suspicions of bankers. A number of legal operations have opened accounts by establishing holding companies with names that obscure the nature of their business. Some owners simply use personal bank accounts. Others have relied on local bank managers willing to take chances and bring them on as clients, or even offer tips on how to choose nondescript company names.

But the financial institutions eventually shut down many of these accounts after managers conclude the businesses are too much of a risk. It is not unusual for a legitimate marijuana business to go through a half-dozen bank accounts in a few years. While they are active, however, these accounts may have informal restrictions placed on them — some self-imposed — so they do not draw the scrutiny of bankers who may file suspicious-activity reports or would be required to report deposits over $10,000 in cash. The account holders may make only small deposits, and only at night and at certain branches. Mr. Kunkel of Seattle has such an account.

At the largest credit union in Washington State, BECU, about 20 accounts have been shut down in the last three years after it was discovered they were for businesses in the legal marijuana trade, Todd Pietzsch, a spokesman for the credit union, said.

Kristi Kelly, 36, who owns two dispensaries and several marijuana growing operations in the Denver area, said six bank accounts of hers had been canceled in the last 18 months. “Opening the account is not necessarily the problem,” she said. “Our cash deposit levels flag a bank’s compliance division.”

Ms. Kelly, who had just paid $10,000 in cash to the City of Denver for licensing and application fees to expand her business, said that several times a week she carried around tens of thousands of dollars in a bag. “I never felt as illegitimate as the day I had to buy a cash counter,” she said, adding that she spends three hours or so a day just managing the cash from her business’s multiple locations.

A.T.M.s are common in marijuana outlets, but the business owners often have to use their own cash in the machines in case law enforcement authorities conduct a raid and seize the money.

Those marijuana operations that do have bank accounts or use the personal ones of their owners can use a cashless A.T.M. service in which a debit card is swiped at a dispensary and the money is transferred into the recipient’s account.

“It is operating over the A.T.M. network and not the credit card network,” said Lance Ott, whose company, Guardian Data Systems, provides this service. “The A.T.M. networks are not as regulated. This is the loophole.”

Since legal marijuana operations, for the most part, cannot get bank loans, these small businesses have to rely on short-term loans from individuals, usually with higher interest rates.

To help, High Times magazine is starting a private equity fund to invest in marijuana businesses. But many investors may feel uneasy about marijuana businesses that do not have bank accounts. And without bank references, entrepreneurs say, it is much tougher to get lines of credit from vendors.

Leaders in the marijuana trade point out that giving accounts to businesses would allow for more transparency and meticulous regulation and would help ensure that jurisdictions receive the taxes they are entitled to.

Marijuana entrepreneurs and banks both would like clear guidelines from the government on how financial institutions can serve the industry. On Friday, six members of Colorado’s congressional delegation sent a letter to the Treasury and the Justice Department requesting that they “expedite” that guidance.

In August, the Justice Department issued a memo indicating that it would not crack down on legal marijuana as long as eight regulatory requirements were met, like preventing revenue from the sale of marijuana from going to criminal enterprises and preventing the distribution of marijuana to minors. The memo did not address banking.

The Treasury Department’s Financial Crimes Enforcement Network hopes to circulate recommendations by the end of this month to officials at the Treasury and the Justice Department for their opinions, an official briefed on the situation said. There is no timetable for formal guidelines.

Richard Riese, senior vice president for regulatory compliance at the American Bankers Association, said banks wanted clear and comprehensive guidelines on how to do business with the legal marijuana industry.

Mr. Riese said, for instance, that banks would want to know that they were not “aiding and abetting” a criminal enterprise if they provided services to marijuana businesses. “Banks will need a lot of detail from regulators to get the satisfaction and comfort they are looking for,” he said.

Sheelagh McNeill contributed research.

Source: New York Times (NY)
Author: Serge F. Kovaleskijan
Published: January 11, 2014
Copyright: 2014 The New York Times Company
Contact: [email protected]
Website: http://www.nytimes.com/

Marijuana Sales Exceed $5 Million In First Week

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Colorado marijuana dispensaries made huge sales in the first week of legal recreational marijuana. Owners of the 37 new dispensaries around the state reported first week retail sales to The Huffington Post that, when added together, were roughly $5 million. That’s a lot of green for Colorado’s legal weed.

Colorado, the first state to allow retail recreational marijuana sales to adults age 21 and older, has projected nearly $600 million in combined wholesale and retail marijuana sales annually. The state, which expects to collect nearly $70 million in tax revenue from pot sales this year, won’t have its first official glimpse at sales figures until Feb. 20, when businesses are required to file January tax reports, according to Julie Postlethwait of the state Marijuana Enforcement Division.

Denver’s 9News was first to report statewide retail sales on New Year’s Day, the first day legal pot shops were allowed to operate, exceeded $1 million. Interest dropped in the days that followed, according to shop owners, but many reported customers still waiting in lines out the door.

“Every day that we’ve been in business since Jan. 1 has been better than my best day of business ever,” Andy Williams, owner of Denver’s Medicine Man dispensary, told The Huffington Post.

Owners of larger shops told HuffPost they sold from 50 pounds to 60 pounds of marijuana in the first week. Smaller shops sold 20 pounds to 30 pounds, proprietors said.

Under state law, Colorado residents may legally buy up to one ounce of marijuana in a transaction. Tourists can purchase up to one-fourth ounce.

But the initial rush to buy legal weed was so great that many shops imposed caps on the amount each customer could buy, or raised prices to curb demand and stave off a possible shortage. So far, none of the retailers reported supply problems.

Prices also were boosted by the state’s 25 percent tax on retail purchases, including a 15 percent excise tax and a 10 percent sales tax. Voters approved the levy in November. Local taxes can add more to what customers pay.

Shop owners said their sales were biggest the first day. Each day since, sales have been roughly half the New Year’s Day volume, the business owners said.

One-eighth of an ounce of marijuana was selling for an average of $65 around the first of the year, according to Marijuana.com.

Despite the surging sales, Joaquin Ortega, co-owner of Denver Kush Club dispensary, was quick to note to HuffPost that federal laws against marijuana sales and possession present obstacles to Colorado’s legal retailers. The Justice Department has said it won’t challenge legalization laws in Washington state and Colorado as long as the states prevent out-of-state distribution, sales to minors and drugged driving, among other conditions.

Still, the federal prohibition means banks won’t accept marijuana businesses for traditional bank accounts, and retailers said they can’t take advantage of traditional business tax writeoffs. 

“People think we all became millionaires,” Ortega said. “But as a business owner, I can’t write anything off for the last three years.”

Banks have said they fear they could be implicated as money launderers if they offer traditional banking services to the pot businesses.

Marijuana businesses often cannot accept credit cards, leaving them to conduct transactions in cash. They say that’s a burden for taxes and payroll, and a safety risk.

Monday night, Denver City Council urged banking regulators to grant Colorado marijuana businesses access to the federal banking system, so they can use the same banking services as other businesses.

Rep. Ed Perlmutter (D-Colo.) is seeking reformed access to banking for marijuana businesses with his Marijuana Business Access to Banking Act (H.R. 2652), which would create protections for banks that offer services to state-sanctioned marijuana-related businesses.

“The banking legislation sponsored by Congressman Ed Perlmutter is a common sense approach to bring financial legitimacy to the legal marijuana industry,” Denver City Councilman Albus Brooks told HuffPost. “It’s ludicrous and unsustainable to force large neighborhood businesses to operate entirely with cash. Congress needs to act, and act now.”

The Wall Street Journal reported Monday that the Department of Justice is also drafting legal guidance on how banks can work with marijuana businesses in states like Colorado and Washington, which both legalized recreational marijuana for adults 21 and over.

Dispensaries in Washington state are expected to open later in 2014.

Source: Huffington Post (NY)
Author: Matt Ferner
Published: January 8, 2014
Copyright: 2014 HuffingtonPost.com, LLC
Contact: [email protected]
Website: http://www.huffingtonpost.com/

Marijuana Should Be Legal, 55 Percent Say

posted in: Cannabis News 2

In a dramatic switch from recent decades, a clear majority of Americans say smoking marijuana on a recreational basis should be legal. In fact, a new CNN-ORC International poll indicates that the moral stigma attached with smoking the drug has plummeted, too, and now fewer find fault with the activity in terms of seeing it as a sign of subpar values.

Specifically: Fully 55 percent of survey respondents said marijuana should be legal. Only 44 percent said it should remain illegal.

CNN said Americans have been slowly but steadily embracing the idea of legalized marijuana for the last 25 years. In 1987, about 16 percent supported legalizing the drug. In 1996, that statistic was 26 percent; in 2002, it was 34 percent, and just a couple years ago, it was 43 percent.

But this is the first time a clear majority found sense in legalizing the drug.

Still, there are several key demographic differences, CNN said.

“There are big differences on age, region, party ID and gender, with senior citizens, Republicans and Southerners the only major demographic groups who still oppose the legal use of pot,” said CNN polling director Keating Holland.

For example: Two-thirds of those between the ages of 18 and 34 said pot should be legal. Only 64 percent between the ages of 34 and 49 felt similarly, CNN reported.

The findings show a major shift in American culture since the days of President Nixon, who declared drugs “public enemy Number One,” and 65 percent in the country agreed that marijuana use was a serious problem.

“Attitudes toward the effects of marijuana and whether it is morally wrong to smoke pot have changed dramatically over time,” Mr. Holland said. “That also means that marijuana use is just not all that important to Americans any longer.”

Source: Washington Times (DC)
Author: Cheryl K. Chumley, The Washington Times
Published: January 7, 2014
Copyright: 2014 The Washington Times, LLC
Website: http://www.washtimes.com/
Contact: [email protected]

Feds Call Out CO in Releasing Study on Teen MJ Use

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Federal drug abuse officials called out Colorado by name Wednesday in releasing a new national survey of illicit drug use among teenagers, saying marijuana legalization efforts are clearly changing youth attitudes in a dangerous way.

The White House Office of National Drug Control Policy noted many teens report getting their marijuana from others with medical marijuana access. Past-month pot use by high schoolers jumped over five years, and perceived risk by teens is plummeting, said the annual report of the National Institute on Drug Abuse.

Colorado, Washington and other states heading toward legalization are conducting a “large social experiment (that) portends a very difficult time” for drug-abuse control, said Gil Kerlikowske, director of the Office of National Drug Control Policy.

Legalization advocates, meanwhile, cited other statistics in the report showing the recent national trend in high school use of pot is flat.

The most recent three years of the survey show little change in self-reported use in the annual tally.

In 12th-graders, for example, use in the past month was 22.7 percent of respondents, little changed from 22.9 percent in 2012 or 22.6 percent in 2011. A similar flat trend held among 10th- and eighth-graders in those years.

The federal officials cited changes from 2008 to 2013 to make their point: Past-month use by 12th-graders nationally rose from 19.4 percent to 22.7 percent; among 10th-graders, use went from 13.8 percent to 18 percent.

Snipped

Complete Article: http://drugsense.org/url/S6C3cpEd

Source: Denver Post (CO)
Author: Michael Booth, The Denver Post
Published: December 18, 2013
Copyright: 2013 The Denver Post
Website: http://www.denverpost.com/
Contact: [email protected]

Drive-Thru Windows Allowed for Naperville Clinics

posted in: Cannabis News 1

Medical marijuana dispensaries looking to open in Naperville will be allowed to do so in some retail areas and can have drive-thru windows. The Naperville City Council approved regulations for the dispensaries and cultivation centers before the drug officially becomes legal for medical purposes Jan. 1.

Cities are not allowed to prohibit such facilities entirely, but they can impose more stringent zoning regulations than the state, which has rules about their proximity to homes and schools.

Naperville council members agreed to limit cultivation facilities to industrial areas and require owners to go through a hearing process.

Dispensing facilities will be able to open in industrial areas without a hearing. They also will be allowed in some retail areas outside downtown, but a hearing will be needed. The city also has added a provision keeping such facilities at least 250 feet from residential areas.

The council debated whether to limit the amount of retail sales a dispensary could have.

“These facilities, what they sell other than medical marijuana oftentimes are health-related, natural, organic types of products … and I just don’t know that … we want to be in the business of restricting it,” Councilman Steve Chirico said.

Others said they feared drawing people who weren’t using marijuana legally. However, after a city attorney said the state law only allows the marijuana and accessories for using it to be sold to qualifying patients and their caregivers, councilmen agreed to drop the retail sales restriction.

Some council members also previously expressed concerns about allowing drive-thru facilities at dispensaries, but ultimately they decided to allow them.

“There’s people that will have certain issues that will make it difficult for them to get out and walk in,” Councilman Paul Hinterlong said.

The City Council voted 8-0 on the new rules. Councilman Joe McElroy was absent.

Just how many medical marijuana facilities will attempt to open in Naperville remains to be seen. State law allows no more than 22 cultivation centers and 60 dispensing centers statewide.

Source: Chicago Tribune (IL)
Author: Melissa Jenco, Chicago Tribune Reporter
Published: December 20, 2013
Copyright: 2013 Chicago Tribune Company, LLC
Website: http://www.chicagotribune.com/

Colorado’s Crazy Marijuana Tax

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Taxing what you can’t measure is nonsense. But Colorado voters were poised Tuesday to do just that, by taxing wholesale marijuana sales at 15 percent — when no wholesaler exists. That’s right: Most Colorado adult-use marijuana sales must go directly from producer to consumer with no wholesaling allowed, and no wholesale price as a measure for the wholesale tax! That’s because Colorado law, at least at first, requires vertical integration of marijuana businesses.

Vertical integration? Here’s an example: A wine company owns land, vines and a winery, and sells to consumers only at its own outlet store. Substitute “marijuana grow area” for land and vines, “marijuana production facility” for winery and “marijuana retailer” for outlet store, and you understand the Colorado model. Colorado law will require that at least 70 percent of marijuana sales follow that model, with the supply chain integrated vertically (from top to bottom) — and with no wholesaler.

So how do you apply a wholesale level tax when no wholesaler exists? With great difficulty. Colorado regulatory authorities are struggling for answers.

Basing a tax on a fictitious price means no one will ever know the correct tax. Taxpayers will spend time and money trying to beat the system, and government will spend time and money in self-defense. Government and business are likely to grow irritated with one another as they argue about unanswerable questions.

Our dysfunctional international income tax system should have taught us that taxing what we can’t measure is crazy. Multinational corporations like Google, Amazon and Starbucks pay little tax anywhere as they transfer assets among subsidiaries. What do they charge themselves for those assets? (How much does the right hand charge the left hand?) Current transfer pricing rules allow multinational corporations to construct artificial prices for sales between related parties, sales that almost never occur in the marketplace. “Fabled tax wizards” working for multinationals come up with a “tax return position” — the company’s view of how much tax it should pay. (Not much, and often zero.) Why make the same mistake — opening the door to artificial pricing — in taxing marijuana?

Back to Colorado’s tax mess, and its warnings: Vertical integration (the no-wholesalers rule), imposed by the Legislature in 2013, could coexist easily with a tax based on weight or potency. That is, to tax marijuana at so many cents per gram, you never need to know the price. But a price-based, wholesale level tax was locked into place by Colorado’s 2012 initiative (which did not require, forbid or address vertical integration at all). Colorado’s wholesale, price-based tax would be administrable without vertical integration, because without it, real, separate wholesalers want to receive high prices, and their real, separate customers want to pay low prices. With that tension, there’s a real, bargained-for market price to base taxes on.

Meanwhile, Washington State’s law taxes newly-legal marijuana at wholesale, too, but Washington avoids Colorado’s problem by forbidding vertical integration — so related-party sales can’t happen. That is, wholesalers are separate from retailers, so the wholesaler will get an arm’s length, fair market value price from the retailer. That means the Washington State price-based wholesale tax will be related to reality. No fuss, no muss.

We are just at the beginning of figuring out how to regulate and tax marijuana. Other states thinking about legalization need to study the primitive example of Colorado’s tax, and avoid the pitfall. The obvious answer is to forget price and adopt a surer tax base like weight or potency, following Federal precedents for alcohol and tobacco. Or, if states want a price-based tax for some reason, they can delay measuring it until there’s an actual arm’s length sale to an unrelated party. But here’s the clear lesson for future legalizing states: If you require or allow vertical integration, a wholesale tax on prices — when there is no actual sale — is crazy. It’s the kind of tax whose only fans will be tax professionals, billing by the hour.

Pat Oglesby: Lawyer; Former Congressional Tax Staffer.

Source: Huffington Post (NY)
Author: Pat Oglesby
Published: November 7, 2013
Copyright: 2013 HuffingtonPost.com, LLC
Contact: [email protected]
Website: http://www.huffingtonpost.com/

Oregon Group Works on Rules for Industrial Hemp

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Oregon farmers could put in a crop of industrial hemp next spring if a panel of experts can satisfy federal officials with a set of tightly drawn rules. The committee of agricultural experts and state policy officials has been selected by the Oregon Department of Agriculture and will come together in December, the Oregonian reported .

The committee hopes to set up a program that will meet what the federal government calls a “robust” standard, said Jim Cramer, a market and certification official in the department. He said the goal is to do so in time for planting.

Oregon is one of seven states with laws permitting industrial hemp — a strain of marijuana with only a trace of the plant’s psychoactive chemical.

Hemp’s historic use has been for rope. These days it is put to hundreds of uses: clothing and mulch from the fiber, for instance, and foods such as hemp milk and cooking oil from the seeds, as well as creams, soap and lotions.

Oregon officials have held off implementing the state’s 2009 law, saying they would wait until the federal government reclassified marijuana from a substance prone to abuse and lacking medicinal value.

That has not happened, but an opinion issued in late August explained the federal government’s decision against challenging recreational marijuana laws in Washington and Colorado. The memo set priorities on marijuana and said a “robust” system for enforcing state marijuana laws is less likely to threaten federal priorities.

Cramer said his department sought written confirmation from the federal government that it would not oppose an industrial hemp program in Oregon, but it hasn’t gotten a formal response.

“What we want is for the federal government to say these are robust,” he said of the rules the group is drafting.

He said the committee is researching industrial hemp rules in Colorado, North Dakota and Canada. He said Oregon’s rules will cover fees, hemp processing and testing that ensures the level of the plant’s psychoactive chemical, tetrahydrocannabinol, is less than 0.3 percent.

Source: Register-Guard, The (OR)
Published: November 6, 2013
Copyright: 2013 The Register-Guard
Contact: [email protected]
Website: http://www.registerguard.com/

Portland Voters Approve Marijuana Legalization

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Portland became the first city on the East Coast to legalize the recreational use of marijuana, on Tuesday.

Portland voters approved a citizens referendum that legalized the recreational use of marijuana in city limits by a vote of 9,921 to 4,823, according to unofficial results released by the city clerk Tuesday night.

“Most Portlanders, like most Americans, are fed up with our nation’s failed marijuana prohibition laws,” said David Boyer, the Maine political director for the Marijuana Policy Project, in a statement.  “We applaud Portland voters for adopting a smarter marijuana policy, and we look forward to working with city officials to ensure it is implemented.” The ordinance will allow adults, who are at least 21 years old, to possess up to 2.5 ounces of marijuana and requisite paraphernalia for recreational use.  While people can use marijuana on their personal property, the language bars them from using it on any public infrastructure, including sidewalks, parks and roadways; but landlords and building owners can opt to bar smoking on their property.

The ordinance will be enacted 30 days after the election results are certified by the city clerk, according to the city code, and cannot be repealed for five years unless it’s done by citizen petition.

The Citizens for a Safer Portland Coalition, which was comprised of the Portland Green Independent Committee, the Marijuana Policy Project and the American Civil Liberties Union of Maine, led the legalization effort and gained the support of the Libertarian Party of Maine, the Marijuana Caregivers of Maine and a group of local legislators.  “This sends a clear message that Mainers are ready to have a conversation about a statewide tax and regulation structure,” said Diane Russell, D-Portland, who championed legalization legislation on the state level that ultimately went down to defeat.

“A lot of volunteers spent a lot of time to get this on the ballot,” she added.  “This is what happens when grassroots people get together and change the world they live in,” Russell said.

A Gallup poll released last month showed that 58 percent of Americans support marijuana legalization with 39 percent opposed, according to the survey results, and a similar poll done in 2012 showed 48 percent supported legalization with 50 percent opposed.

Question One faced scant opposition, though one resident purchased signs that advocated for citizens to reject the legalization effort, and 21 Reasons, a nonprofit, voiced displeasure with a series of ads placed on buses and bus stops and claimed they promoted drug use, especially by young people.

Russell said she will continue pursuing legislation for a statewide regulatory framework, noting a “real mandate for change” based on Tuesday’s vote.

“It’s going to take a Legislative Council vote to do it,” she said, referring to the legislative body that sets priorities for the session in Augusta.

The Portland citizens initiative, which launched in March, came on the heels of Russell’s bill in the Maine Legislature that aimed to create a taxation and regulatory structure around the legalization of marijuana.  Russell’s bill would have left it up to Maine voters to make the final decision on marijuana legalization through a state-wide referendum.

The bill lacked the support of both the House of Representatives and the Senate.  “Now that marijuana is legal for adults in Maine’s largest city, there is an even greater need for comprehensive reform at the state level,” Boyer said.  “By regulating marijuana like alcohol, we could take sales out of the hands of drug cartels in the underground market and put them behind the counters of licensed, tax-paying businesses.  It’s time to move beyond prohibition and adopt a more sensible approach.”

Despite Legalization, Not Much Known About Effects

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Even though 20 states, including Illinois, have passed laws legalizing medical marijuana, swayed in part by thousands of personal testimonies, current research hasn’t nailed down exactly if, and how, marijuana alleviates all the specific diseases the drug is being legalized to treat, experts say.

A number of proponents believe marijuana could benefit people with everything from glaucoma to cancer, and it’s been legalized in Illinois to aid patients with some 40 medical conditions. But opponents of its medicinal use believe the risks of smoking medical marijuana outweigh the benefits, while others question whether patients really improve or only feel like they improve.

Marijuana’s best-known compound is THC, but the plant actually has 105 unique cannabis compounds with potential for medicinal use, proponents say. THC has already been approved by the Food and Drug Administration in synthetic form to help patients with nausea and decreased appetite.

Some scientists believe the plant’s other compounds — called cannabinoids — could have equal promise. Although research has increased in recent years as more states legalize medical marijuana, solid evidence of how individual cannabinoids could help people with specific diseases has been significantly lacking, a review of medical literature and interviews with experts shows.

Researching the potential effects of marijuana’s various components on conditions such as multiple sclerosis, fibromyalgia or lupus could have serious implications for doctors who want to prescribe medical marijuana to patients.

If the specific benefits could be proved, experts say, doctors ultimately would be able to assign particular strains — with varying chemical mixes — to people, depending on their condition. Further research also may help determine optimal doses and whether marijuana works better than other medicines, experts say.

While most medicines derived from nature are tested before they reach the masses, the process to evaluate marijuana has been confounded by its longtime status as an illegal drug, which it retains in the eyes of the federal government. A complicated federal approval process and limited availability of research-grade marijuana add to the difficulty.

The only study specifically cited in Illinois’ law, signed by Gov. Pat Quinn in August and set to go into effect next year, is a 1999 Institute of Medicine report. But Dr. John Benson, a lead editor of the report, said legislators stretched the conclusion of the book-length study when it said modern medical research “has confirmed the beneficial uses of cannabis.”

While the report did say there was promise that marijuana could have medical benefits, it also suggests researchers need to continue to dig deeper into the issue. It also says marijuana should not be smoked, he said.

“Smoking marijuana is not recommended,” the report states. “The long-term harm caused by smoking marijuana makes it a poor delivery system.”

The 14-year-old article has become a primary source for both critics and supporters of medical marijuana — the Drug Enforcement Agency and advocacy groups have cited it to prove opposite points.

“I don’t think whatever the legislature is saying (in the law) is in effect untrue,” Benson, now retired, said from his California home, “but it needs to be qualified.”

Medicine by Legislation

Illinois legislators knew they had an uphill battle getting the medical marijuana bill passed last summer, Rep. Lou Lang said. Lang worked at swaying his colleagues for five years and said he compromised on the list of about 40 conditions — some of which are closely related — that will qualify people for medical marijuana once it becomes available sometime next year.

Illinois legislators, he said, did “a substantial amount of reading,” but they did not evaluate each condition on the list with any scientific methodology.

“I can’t point to specific studies that we used,” Lang said. “Much of it was done by patients telling us what worked and what didn’t. … It became crystal clear some of these things that ought to be in the bill.”

The legislators relied mostly on personal testimonies and compared notes with states that have also passed medical marijuana laws.

“When thousands of people come to me and say they’re using this drug illegally because it’s the only thing that works,” Lang said, “that’s good enough for me.”

Mike Graham, of Manteno, was one person who shared his story with legislators. A little more than a decade ago, he was using 14 different pharmaceuticals. Living with an extremely painful degenerative spine disease, he has been through multiple surgeries in efforts to remedy it. But doctors feared one more could paralyze him, so he took medications for pain instead.

“I didn’t even know my name,” Graham said. “It was horrid.”

When he was in his late 30s, doctors sent him home with a hospice care nurse. After reviewing his medications, she told him he would die early if he continued taking all of them. To his surprise, she recommended pot, he said.

“I almost fell out of bed laughing,” Graham, 51, said. “I come from a law enforcement family.”

Increasingly desperate, in 2002, he decided to give it a try. He was able to cut back on all his previous medications except a morphine pump under his skin. Now, he takes three or four puffs of marijuana in the morning and at night. Once down to 135 pounds, the more than 6-foot-tall Graham now says he’s back up to 250 after regaining his appetite.

“What it comes down to here (is) I wouldn’t be here if I hadn’t made that decision,” Graham said.

While stories like Graham’s are plentiful, doctors and researchers say the nonmedical elements of the plant could have sometimes serious adverse effects.

Dr. Eric Voth, a Topeka, Kan., internist and pain specialist and chairman of the Institute on Global Drug Policy, said relying on anecdotal evidence is dangerous because other factors could influence why patients start to feel better.

“It’s very hard to differentiate whether somebody feels better because they’re stoned or because they’re getting a true therapeutic benefit from the drug,” Voth said.

Health Risks

Smoking marijuana could increase the risk of cancer because of inhalation of tar and other carcinogens in the plant, Voth said. While proponents of its use point to the 105 unique compounds, as detailed in a soon-to-be published report by leading cannabinoid researcher Dr. Mahmoud ElSohly and his colleagues, that may be useful for medicine, there are hundreds more compounds in marijuana that some scientists believe not only have no use but may be harmful.

“You’ve still got (hundreds of other) substances in there,” Voth said. “It just (shouldn’t) be smoked. That is a crazy precedent.”

Illinois’ law allows dispensaries to sell marijuana-infused baked goods in addition to joints, but advocates say it takes longer to feel the effects of marijuana when it’s ingested instead of smoked.

Several papers in scientific journals have found that marijuana use over a long period of time can have negative cognitive effects too. Users can’t concentrate or remember as well as before, in some cases years after they have quit.

Joe Friedman, a Deerfield pharmacist, said the chemical makeup of marijuana could be tested at independent labs, and he hopes it will be in Illinois. Marijuana is designated as a Schedule I drug, defined by the DEA as “drugs with no currently accepted medical use and a high potential for abuse.”

Changing it to a Schedule II drug, which means it is considered dangerous but could have potential medicinal value, Friedman said, would help research progress in learning which type of marijuana is best for which patient.

“When a drug comes on the market, you take the active ingredients, you figure out what these drugs do,” said Friedman, who wants to open a dispensary in Illinois. “You want to be able to identify the active ingredients and the concentrations … and then down the line (after more research is done), you’ll be able to say, ‘OK this one is good for MS,’” Friedman said.

But Voth said he doubts that even identifiable benefits would be enough to outweigh the negative effects, because of other potentially harmful components that are mixed in.

“Essentially what they are, are toxic chemicals,” Voth said. “None of those things would you ever mix with medicine.”

What Some Call a Cure-All

In 1937, the U.S. criminalized marijuana, and today it’s considered a Schedule I drug, along with heroin and LSD.

The FDA approved a synthetic THC pill called Marinol in 1985, acknowledging the drug’s benefits for people with nausea and decreased appetite. In Canada and some parts of Europe, a similar drug called Sativex — containing synthetic THC and cannabidiol — has been approved in recent years, offered as an oral spray. In the late 1980s, scientists discovered a previously unknown biological system called the endocannabinoid system, which proponents for marijuana theorize could show how it works.

The National Institutes of Health reported in 2006 that the system holds “therapeutic promise in a wide range of disparate diseases.”

But experts say more research is needed before determining exactly what the system may be able to do.

Mary Lynn Mathre, a founding partner of Patients Out of Time, a marijuana advocacy group that focuses on health issues, said the leading theory regarding the system is that the human body has cannabinoid receptors — essentially key holes that cannabis compounds fit into, helping the body regulate.

“You take cannabis, which has similar chemicals that we need, and you put it in the body and they work if we’re not making the cannabinoids that we need,” explained Mathre, a longtime registered nurse. “You can liken this to a diabetic. Their pancreas isn’t making insulin, so we give them insulin. If our body can’t make this chemical, there happens to be this plant on earth that is there to supply us.”

A Call for Research

Many prominent health organizations — including the American Medical Association, the American Cancer Society and the National Multiple Sclerosis Society — support researching cannabinoids’ potential but don’t endorse the legalization of medical marijuana. The American Nurses Association and the American College of Physicians support medical marijuana’s legalization, while also calling for more research.

“Science has been doing this kind of thing for years,” Voth said. “They find a (naturally) occurring substance and then they try to dissect down to what really works, isolate it and synthesize it. That’s what pharmaceutical companies do all the time.”

While THC has a few proven medical benefits, it’s possible that other compounds that don’t have the same euphoric effect could relieve symptoms just as well or better than THC, researchers and pharmacists say.

Pritesh Kumar, a researcher who specializes in cannabinoid pharmacology and is a consultant for Chicago-based Quantum 9, a medical marijuana technology firm, has focused on CBD, a compound in marijuana some scientists believe could have significant benefits.

Research like Kumar’s, studying isolated compounds in marijuana, has picked up in recent years, but widespread research looking at how specific diseases and cannabinoids interact has not been done.

Friedman, the Deerfield pharmacist, said he’s hopeful that with medical marijuana legalization on a faster track than ever, disease-specific research in the U.S. will pick up.

“As marijuana gains popularity and (if it) moves from Schedule I to Schedule II, research will really kick in,” Friedman said. “This is a whole new industry, and this is going to get bigger and stronger as time goes on.”

Source: Chicago Tribune (IL)
Author: Ellen Jean Hirst, Tribune Reporter
Published: October 27, 2013
Copyright: 2013 Chicago Tribune Company, LLC
Website: http://www.chicagotribune.com/

Marijuana Likely To Be Decriminalized in D.C.

posted in: Cannabis News 0

Before long, smoking a joint in the nation’s capital might get you in even less trouble than parking on the wrong side of the street on street-cleaning day.

Ten of 13 members of the D.C. Council and Mayor Vincent C. Gray (D) have endorsed a plan to make small-time marijuana possession a civil rather than a criminal offense. That means recreational cannabis users wouldn’t face arrest, charges or jail time — any of which can destroy their lives — as long as they aren’t caught with more than an ounce of the drug. Instead, they would have to pay a fine, perhaps as low as $25. (The mayor also wants criminal penalties to remain for anyone caught using it in public.)

Much of the debate over the idea has focused on an American Civil Liberties Union report that suggests that the District and many other jurisdictions enforce their anti-marijuana laws unfairly, disproportionately arresting African American suspects. On these pages, Police Chief Cathy L. Lanier pushed back, insisting that factors such as a geographic concentration of tips about marijuana users, not biased policing, are responsible for the city’s arrest figures.

That debate does not need to be resolved to conclude that maintaining criminal penalties for small-time users of any race doesn’t make sense.

Enforcing criminal penalties against those who aren’t involved in trafficking or selling the drug would be too harsh and a waste of government resources. As it stands, very few people in the District are prosecuted for possessing less than an ounce of marijuana, unless there are other charges to go along with it. But even an arrest can make it difficult to find a good job.

Refraining from enforcing criminal penalties, on the other hand, would promote disrespect for the law.

An all-around better policy, long championed by District lawyer Paul Zukerberg, would be to slap small-time users with a civil fine, which is a measured way to send a message that the government does not condone or tolerate marijuana use. No one’s life would be permanently marred by getting caught with a joint. But violators would still have to pay, literally. In that vein, we would suggest that $25 — a smaller fine than that attached to low-level parking violations — is too modest a penalty. Maryland lawmakers considered setting a $100 fine this year, the same level that New York state approved last year. That sounds like the right size.

Attitudes about marijuana are changing, and quickly. A recent Gallup poll found that an astonishing 58 percent of Americans now favor legalizing the drug. Colorado and Washington state have both tried to do just that by changing their drug laws. Federal law still treats marijuana as an illicit substance, but Attorney General Eric H. Holder Jr. announced a policy this year that aims federal resources at high-level offenders. And now the District government is poised to join the 15 states that have decriminalized small-time pot possession.

Of all the official reactions to changing mores on marijuana, decriminalization is the best.

Source: Washington Post (DC)
Published: October 27, 2013
Copyright: 2013 Washington Post Company
Contact: [email protected]
Website: http://www.washingtonpost.com/

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