Marijuana legalization made plenty of headlines in 2015 as the issue steadily became more mainstream. Polls indicate that 58% of Americas think the federally illicit drug should be made legal -- a figure that has grown steadily for decades and has represented the majority opinion for three years now.
Legalization efforts have yet to catch up, however, with just 23 states and the District of Colombia allowing the drug for medical use, and only four states (plus D.C.) legalizing recreational adult use. Georgia and Texas were the only two states to make moves in the past year (both legalized medical marijuana).
The drug is seeing unprecedented levels of support in the United States and is getting closer than ever to widespread legalization. Let's take a look at some of the most important headlines from the past year.
Marijuana gets the political spotlight
With 2016 elections right around the corner (at least in the world of politics), many presidential candidates weighed in with their views of marijuana legalization. Here's a rundown of what some of the major candidates had to say:
- Bernie Sanders introduced a bill in the Senate that would end all federal penalties for possession and growing of marijuana, solidifying his position as the most pro-legalization candidate.
- Chris Christie says if he were president he'd start enforcing federal law, thereby reversing any state-level legalization.
- Hillary Clinton called for a rescheduling of the drug, taking it out of a category including heroin and other substances considered to have no medical benefits. She is a proponent of letting the states that have legalized recreational marijuana serve as testing grounds before considering broader legalization.
- Jeb Bush maintains that it's a state issue but that he would have voted no if he had been in Colorado at the time of the election.
- Donald Trump agrees with Bush that marijuana decisions should be left to individual states, and he is a proponent of the drug for medical uses.
Ohio says no to marijuana
Polls leading up to Ohio's November elections showed the state's citizens heavily in favor of legalizing marijuana. The election marked the first time a state tried to legalize marijuana for both medicinal and recreational uses in one fell swoop, however, which may have been overly ambitious: In the end, citizens voted against the proposal.
However, ambition doesn't seem to be the reason for the proposition's defeat. Rather, language in the proposal allowed for only a small group of growers in the state, effectively creating an oligopoly.
In the same election, Ohio citizens voted yes on a separate issue intended to create a barrier to the creation of similar monopolies. So it's natural to infer that a similar sentiment was behind the rejection of the marijuana proposition. Don't be surprised to see new legislation with a free-market solution show up on future ballots in the state.
Banking issues go to court
On July 30, tiny, Denver-based Fourth Corner Credit Union sued the Federal Reserve Bank of Kansas City, underscoring the broader issue of the lack of banking services available to marijuana businesses. Fourth Corner is looking to be the first U.S. financial institution to openly provide banking to the marijuana industry, but the Kansas City Fed denied the credit union a master account, which it needs to do business. An attorney for Fourth Corner asserts that the credit union was denied the master account because it plans to finance marijuana businesses.
Because marijuana is illegal on a federal level, financial institutions that transact with marijuana businesses could potentially face repercussions related to money laundering, so they've largely avoided this market thus far. Without access to proper banking, marijuana businesses are forced to interact in cash, which is inconvenient and makes them potential targets for criminals.
The Fourth Corner Credit Union lawsuit is ongoing, and a decision in favor of allowing banks to transact with marijuana-based businesses would be a huge win for the industry.
Will this momentum continue through 2016?
The way I see it, the only certainty is more uncertainty. Researchers are still working to add pieces to the giant puzzle that is marijuana's health and safety profile. Report after report comes out, some suggesting that the drug is dangerous and some concluding that it has legitimate medical uses and is safe for lifelong use. Until a rigorous study is done that proves marijuana is safe to use for the long term, it's extremely doubtful that the federal government will reverse its stance.
What this means for businesses is continued trouble getting access to banking and a burdensome tax situation. As an investor, I'm staying clear -- lest my money go up in smoke.
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