Though Cannabis is legal in Arizona, attorneys say Weeding through federal laws gets in the way
That's because marijuana is still illegal at the federal level. Given the complex nature of trying to operate a legitimate business under such circumstances, cannabis law practices are on the increase.
In recent weeks, the U.S. Senate Banking Committee voted to advance a marijuana banking bill that would give businesses in the cannabis sector access to regular banking services. The SAFER Banking Act was approved with both Republican and Democratic support.
Arizona Sen. Kyrsten Sinema and Sen. Mark Kelly have both signed on as supporters of the Secure and Fair Enforcement Regulation Banking Act — though getting the bill through the House of Representatives remains a steep challenge.
The Phoenix Business Journal has just compiled and published its first Law Practices – Cannabis list, and as part of the survey process, we asked a few optional questions for the lawyers to ponder.
Since the legalization of cannabis is a relatively recent event, how much 'catch-up' do you and the businesses have to do to achieve parity with other agricultural endeavors?
"Until cannabis is legal at the federal level, cannabusinesses will not be on parity with other businesses. They continue to struggle with issues concerning banking, insurance, and travel – especially between states, among other things, regardless of the legality at the state level. And because the legalization in Arizona is relatively recent, widespread legal precedent has not been established and is continuously evolving. Although the law in other areas certainly changes, cannabusinesses do not necessarily have the same benefit of being able to look at existing case law to ascertain parameters or at least know where to begin, unlike other agricultural or noncannabis businesses. There is still a ways to go to be on even ground with other businesses and we won't fully be there until the federal issue has been resolved." – Kortney Otten, of counsel, Gallagher & Kennedy.
"Rose Law Group was the first law firm in Arizona to work in the cannabis industry 12 years ago when medicinal cannabis was legalized so we have worked for growers for over a decade. The issues have changed but challenges remain." – Jordan Rose, founder and president, Rose Law Group.
There is a possibility that cannabis may be reclassified under the Controlled Substances Act. How might that impact companies operating in the space, and how can they prepare for the possibility?
"This would be a game changer in all aspects of their businesses." – Jordan Rose.
"Even though HHS (Department of Health and Human Services) recommended rescheduling marijuana to Schedule III, there are still many unknowns surrounding how this might play out. There are certainly things we can reasonably predict, like changes to the taxation landscape stemming from the elimination of Section 280E. But the bottom line is nobody knows what the full impact of rescheduling will be on the cannabis industry. I believe the SAFER Banking Act – which was recently approved by the Senate Banking Committee – would have more of an immediate impact on the cannabis industry in comparison to rescheduling. The SAFER Banking Act would allow cannabis-related businesses to operate like every other business when it comes to financial resources, whereas currently they are seriously disadvantaged by the lack of access to traditional banking services." – Justin Brandt, partner, Bianchi & Brandt.
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