The New York State Society of Certified Public Accountants (NYSSCPA) and the Foundation for Accounting Education (FAE) hosted their 2016 Marijuana Symposium: Business, Tax and Legal Implications last Tuesday.
After the event, Benzinga had the chance to chat with one of the keynote speakers, Zameer Qureshi, a legal consultant to The Acta Group EU, Ltd, an affiliate of Bergeson & Campbell, P.C. that focuses on marketing chemicals, biocides and products of industrial biotechnology, nanotechnology and synthetic biology.
A Republican Government
When asked if the Cole Memo could be at risk under a Republican House, Senate and White House, Qureshi said he saw some potential threats. However, he does not think “the Trump administration is going to start re-enforcing federal level marijuana law in states that have legalization measures in place.”
So, there’s risk, but to a certain degree, he added, “Legally, the Cole Memos can be shut down by the new administration.”
Having said this, the nomination of Jeff Sessions as attorney general is a “deeply troubling development,” he continued. “It is potential highly problematic for everyone interested in cannabis, be they users, processors, distributors... whichever segment of the supply chain you’re in. But, that said, I find it slightly unlikely that a Trump administration or any new appointment would start going back, and one big factor of that is the success that legalization efforts have had.”
Moreover, he supplemented, tax revenue is certainly another issue to consider.
Benzinga moved on to ask about the risk that financial institutions serving the cannabis industry are facing.
“We know that the U.S. Department of Treasury’s Financial Crimes Enforcement Networks require banks to do their due diligence and file” the appropriate documents, Qureshi explicated. But, again, the approach that the new administration takes is “something that remains to be seen.”
“We know that any of these memos are largely discretionary. Under federal law, cannabis is still under the Controlled Substances Act; [it’s a] Schedule I [substance] alongside heroin, ecstasy and LSD. So, in theory, banks could be subject to prosecution, but this remains to be seen. Now, if the measures for reform go though [...] they could eventually protect banks,” changing the climate considerably.
“What we do know is that, for a little while, in the recent past, banks have been okay and the industry has been okay working with banks,” he concluded. However, a large number of banks do not want to work with the industry. “Distributors are well advised to do their research, find suitable banks, follow legislative developments and then go from there.”
Liked this interview? Check out our conversation with Viridian Capital Advisors president and founder, who shared a look into its Cannabis Stock Index, which tracks a few biotech companies including GW Pharmaceuticals PLC- ADR (NASDAQ: GWPH) and Zynerba Pharmaceuticals Inc (NASDAQ: ZYNE).
Image Credit: Mike Pence & Jeff Sessions, By Gage Skidmore from Peoria, AZ, United States of America (Mike Pence & Jeff Sessions) [CC BY-SA 2.0], via Wikimedia Commons
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- Marijuana Industry: Viridian's President Explains Why He's Concerned About The Vape Sector
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