Possible federal interference, lack of banking are issues facing Nevada’s marijuana industry, Titus says
February 3, 2017 – By Ray Hagar, Nevada Newsmakers
Gov. Brian Sandoval is counting on about $90 million in tax money from the newly-formed recreational marijuana industry in Nevada, according to reports.
In his State of the State speech, Sandoval said a proposed tax on marijuana sales could raise about $69 million for schools. The marijuana business could generate another $21 million with business fees and wholesale taxes.
It’s the only new money in Sandoval’s $8.1 billion proposed state general fund budget.
However, guests on Nevada Newsmakers, such as Washoe DA Chris Hicks and U.S. Rep. Dina Titus, D-LV, have said that money could be gone in a puff of smoke if proposed Attorney General Jeff Sessions and the Trump administration go after the pot industry.
Despite statewide acceptance in Nevada, Colorado and the “Left Coast” states, marijuana remains illegal on the federal level. It is listed as a Schedule 1 drug under the Controlled Substances Act, just like heroin.
On Newsmakers this week, Titus was concerned about Sessions going after Nevada’s new industry, which is ready to take its place — along with smoking and drinking — as a viable source of “sin tax” revenue for the Legislature.
When Titus was asked if Session could hassle the Nevada pot industry, she said, “He could. He could go after the marijuana industry.”
Sessions, a U.S. senator from Alabama, has long been antagonistic toward pot. Last year, he said, “Good people don’t smoke marijuana.”
When Sessions was the Alabama AG in the 1980s, he said he thought the Ku Klux Klan “were OK until I found out they smoked pot,” according to Politico.
Titus said work is being done on the state and national levels to thwart the feds messing with Nevada’s newest industry.
“I think there will be some legislation perhaps to protect Nevada in the state Legislature and I am part of the Cannabis Working Group back here (in Washington D.C.) to be sure places where it is legal, people can’t be prosecuted.”
Session could also choose not to go after states’ legal marijuana laws, just like he could choose not to go after “Dreamers,” those undocumented immigrants who came to the U. S. with parents at a young age and gained temporary legal status through the Deferred Action for Childhood Arrivals (DACA).
“It is pretty much a year-by-year situation and whoever is in charge at the Justice Department can go after it aggressively or not,” Titus said about states’ marijuana industries. “I’m hoping he (Sessions) has other things to deal with, so this, like DACA, gets pushed back.”
Marijuana’s banking problem
Titus sees another big hurdle for Nevada’s marijuana industry. Federal law prohits banks and credit unions from taking marijuana money. So Nevada’s marijuana industry has a similar dilemma to what Tony Montana had in ‘Scarface” — what to do with all the cash.
Titus said she is a co-sponsor of a marijuana banking bill, along with Rep. Ed Perlmutter, D-Colo.
“Banks would like to do business with them because there is a lot of money in it,” Titus said. “But they are afraid to because it is illegal federally and they are subject to so many federal regulations. They’re afraid somebody will come in and shut them down.
“So it is kind of a cash and carry situation, which is dangerous,” she said.
Titus also sees a marijuana-cash problem for tax collectors, counting stacks of bills.
“And if you are trying to tax the revenue, it is not very accountable,” she said. “So if you can get banking or get credit unions interested or form some kind of co-op that would not be subject to those federal regulations and potentially being shut down and put out of business, that would be an important first step.”
A sensible opinion on the legal states’ marijuana industry and the Trump administration comes from Chris Walsh, editor of Marijuana Business Daily. He told Yahoo! Finance’s Daniel Roberts:
“… The consensus is that a widespread crackdown will be difficult. If Trump’s going to attack the marijuana industry—like the recreational side, or the new states that legalized—it’s going to be very difficult for him to do that. He’s going to have a very hard time unwinding all the time and money and effort that states have put into these programs.”
Raiders stadium in Titus district
If the Oakland Raiders build their proposed new stadium in Las Vegas, it will land in Titus’ U.S. House District 1, near the Las Vegas Strip.
The deal to build the stadium seemed to explode last week when the LV Sands’ boss Shelton Adelson — Nevada’s richest person — backed out. Soon, Goldman Sachs followed. Titus remains optimistic a deal can be reached. While distancing herself from the controversial room-tax component, she likes the idea of an NFL team moving into her district.
“I’m not sure somebody else won’t pick up the investment because it is pretty far down the road,” she said.
“The Legislature decided how they were going to pay for it,” she added. “That wasn’t anything I was involved in. But once they decided, I was excited about it. I don’t think you can compare Las Vegas to other towns where stadiums have been built because of all the tourism, the people who could come to see the teams play (the Raiders).
“It kind of bumps us (Las Vegas) up to another level,” Titus said about the NFL team. “I hope it does come at this point. But there’s a big hurdle now, if that financing has to be renegotiated with somebody new.”
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