Marijuana legalization efforts here in our home state of Florida and throughout the United States has triggered a paradigm shift in both policy structure and the perspectives of the masses. On the political side, the legalization of marijuana is now a social injustice, medical and economic issue. On the business side, massive markets such as the pharmaceutical, alcohol and tobacco industries are all watching closely as a rare financial threat to their industry has suddenly appeared. The growth projections of the cannabis space has many entrepreneurs eyeing the opportunity as well. For the people, the legalization of marijuana means potential clemency to loved ones serving time for nonviolent marijuana crimes, it could mean expunged records and also job opportunities as well. Going out to vote this November for marijuana reform means very little about the recreational use of marijuana and everything to do with improving the quality of life here in America.
Here at S2S Insurance Specialists we identified early on that the cannabis industry is vulnerable to nearly every financial risk. As the industry moves closer to the mainstream and further away from the stigma of being a gateway drug, its evolution into a legitimate industry makes marijuana insurance essential. As an example of shift in perspective, here in Florida we saw a surprise candidate win the primary for governor, Tallahassee Mayor Andrew Gillum. He is campaigning as an advocate for legalized adult-use marijuana throughout Florida, among many other issues. In 2016, 71% of Florida voters approved a broad legal medical marijuana program, more than any other state so far. The new medical marijuana law was intended to open up access to a wide variety of cannabis products for Floridians suffering from a myriad of conditions. State legislators have done everything they can to slow down the growth of the industry since then, and little to correct the social injustice associated with marijuana prohibition. They have continued to strip the ability to vote from roughly 1.6 million convicted felons that have served their time already. Many of these convicted felons served time for nonviolent marijuana related crimes.
If we look over to the west coast, states like California, Colorado and Washington have embraced marijuana legalization and are major influencers for the rest of the country. Many of them have already begun the hard but necessary work of expunging the records of thousands of people convicted of marijuana related misdemeanors. California is the 5th largest economy in the world and despite federal threats, they continue to embrace cannabis legalization and will likely become one of the main hubs for marijuana around the world. Currently the marijuana industry is valued at about $10 billion here in the US and according to BDS Analytics it is projected to be worth nearly $50 billion by 2027. If those projections prove to be correct, marijuana will rival the alcohol and snack industry. At that sort of scale marijuana business insurance becomes as essential as it would be for any major industry. In order for the industry to reach these levels, it is likely that the east coast will need to embrace cannabis much like the west coast. We have seen Massachusetts and Vermont legalize adult-use marijuana and the commercial sale of marijuana is set to start very soon in Massachusetts. Both New York and New Jersey are working on bills to legalize recreational marijuana as well.
If we look at our nation as a whole, legalized cannabis impacts the lives of our military veterans, schools, the banking system and absurd federal taxes due to IRC 280E. Many of our military veterans depend on the VA Healthcare System which falls under federal law, so as a Schedule 1 substance the VA has refused to even acknowledge the testimonies of countless veterans claiming that marijuana has helped them re-acclimate to life at home as they struggle with conditions such as PTSD and chronic pain. Children struggling with chronic seizures from conditions such as epilepsy have come to depend on CBD products to provide them with relief and allows them to attend school. However, most public schools around the country will not permit the medicine on school grounds due to its Schedule 1 status. Chicago Governor Bruce Rauner, once a strong opponent to legalized cannabis, signed Ashley’s Law earlier this year allowing students with medical marijuana cards to use medical cannabis on school grounds. The only way these sorts of progressive policies spread to other cities and states around the country is if the people make their voices heard in the ballot box.
Cannabis dispensary insurance may be the most important form of risk mitigation due to the banking restrictions marijuana companies face. Banks are nervous that if they accept deposits from marijuana dispensaries, the federal government will see it as money laundering. The end result is that they have to keep much of their revenue as cash stored in vaults which leaves them vulnerable to robbery from both external and internal sources. It also makes filing taxes that much more difficult since they do not have the benefit of bank record keeping. The additional paperwork is incredibly time consuming. Since marijuana is a Schedule 1 drug, marijuana sales are seen by the federal government as the trafficking of a controlled substance which means IRC 280E comes into play disallowing cannabis companies to write off normal business expenses. Many cannabis companies are forced to use GAAP cost accounting due to these restrictions making it even more time and resource intensive. The pioneers of the marijuana industry have elected to take on far more challenges than any traditional entrepreneur.
We have clearly outlined the relevant and meaningful reasons to get out in vote this November on the issue of marijuana legalization. The lines have been drawn in the sand for the most part. You will either be voting for marijuana reform or for continued prohibition. Here in Florida the general election takes place on November 6th and it is clear that if you vote for Andrew Gillum, you will be voting to fully expand Florida’s marijuana law to allow anyone 21 years of age or older access to marijuana regardless of medical conditions. If you vote for Ron DeSantis, you will likely see Florida continue to work with its current medical marijuana program much the same way as Governor Scott has managed it. On the ballot will also be Amendment 4, Voting Rights Restoration for Felons Initiative, which if approved will grant the right to vote again to the 1.6 million convicted felons that have served their time here in Florida. If passed, this amendment could significantly affect the outcome of future elections. For a full list of who is running in what district and what their stance is on marijuana legalization, please reference NORML’s FL site here.
Wherever you may be around the country, this November may represent one of the most critical elections in US history. The current war on drugs promotes violent encounters between our law enforcement and the participants in the illicit marijuana market, along with harsh life changing penalties. The new proposed version of the war on drugs promotes the elimination of the illegal market through regulation of cannabis, much like we did with alcohol almost one hundred years ago. Most violent crime associated with marijuana is proliferated by prohibition. While marijuana’s status here in the US hangs in the balance, the risks for the industry become more apparent and furthers the need for true cannabis insurance specialists. How long can we allow this market to remain unregulated at the federal and state level? So, go out and vote this November and know that your vote may count more now than ever before.