How hard it is to survive in the cannabis space?
On the one hand, the marijuana industry is nascent as the plant has been stigmatized for decades. Being illegal at the federal level makes operating that much more complicated. On the other hand, the industry continues to progress. Each year more states and countries embrace it, and new studies confirm the vast potential of marijuana’s healing properties that our ancestors knew centuries ago.
So, it’s difficult, but not impossible to maneuver in the cannabis space.
Often viewed as one of the biggest challenges is the lack of access to banking and financial services due to marijuana’s Schedule 1 status, which the DEA classifies as having no accepted medical value and has high abuse potential.
That said, some financial institutions want to work with legal cannabis operators. To learn more about that Benzinga reached out to Sahar Ayinehsazian, a partner at Vicente LLP‘s Los Angeles office. Ayinehsazian specializes in corporate transactions and chairs the company’s Banking and Financial Services Access Group. Vicente LLP, one of the first cannabis, hemp and psychedelics law firms in the country, provides services that include licensing, regulatory compliance, policy, intellectual property and litigation.
Ayinehsazian told Benzinga that “finding the right advisors, being wholly compliant and seeking the right financial institutions,” are some of the potential solutions to the banking challenges marijuana operators are having.
“There are a continuously growing number of banks and credit unions that will service cannabis-related businesses – the trick is to approach them correctly and make sure that you make yourself the type of business they are looking for,” she said.
Ayinehsazian will be sharing her insights at the Benzinga Cannabis Market Spotlight: California event on February 22 in Culver City, California on the thought-provoking panel “Lessons From Leadership: The New Growth Paradigm.”
All Of Cannabis Is Complex
On the complexity of regulatory issues, she told us that “all of cannabis is complex, but the most complex regulatory issues arise with new regulations or changes to existing regulations – it can be difficult to understand how these regulations are used in practice. The most common misapprehension about the cannabis industry is that we are all risk-takers living on the edge – the reality is that most of us in this industry are all super compliance-focused and constantly checking to make sure that we’re following every single applicable rule.”
Regulatory Compliance First
In January, the government released hundreds of pages of documents related to its ongoing review of the status of cannabis under federal law, confirming that the Department of Health and Human Services (HHS) has recommended the DEA reschedule cannabis as Schedule III under the Controlled Substances Act. This means that HHS has acknowledged some medical value of marijuana and the rescheduling is being considered. We asked Ayinehsazian how much would change in the marijuana industry in terms of regulatory issues, banking services and taxes if cannabis is reclassified to Schedule III,
“I think that even with rescheduling regulatory compliance would still remain of great importance,” she said. “Banking and taxation would be greatly improved though – the current banking issues we face as a result of federal illegality would be greatly alleviated, as would the federal taxation issues associated with 280E.”
The 280E is an IRS tax code, which states that “no deduction or credit shall be allowed in running a business that consists of trafficking a controlled substance.” This means that until cannabis is removed from a list of controlled substances on the federal level, there will be no tax deductions or credits given to legal cannabis operators.
Ayinehsazian said that in terms of taxation and banking, both rescheduling and de-scheduling would be about the same. “In terms of regulatory requirements, de-scheduling may present a bit less of a burden, but I think that no matter what, we’re still looking at regulatory compliance being incredibly important.”
To learn more, and get the chance to meet Sahar Ayinehsazian and many others who are making positive and essential changes in the cannabis industry, come and join us at Benzinga Cannabis Market Spotlight: California.
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Photo: SaharAyinehsazian/VicenteLLP KayleKaupanger/Unsplash
Image and article originally from www.benzinga.com. Read the original article here.