Marijuana industry delegation’s pitch on legalized pot: It’s just good business

By  Holly Yeager ,  Thursday, March 13,  8:58 PM

The delegation from the National Cannabis Industry Association made a point of dressing well for its day on Capitol Hill, sporting mostly dark suits, lots of ties and plenty of the group’s signature lapel pins, which feature a sun rising over vibrant fields of marijuana.

Marijuana advocates have come to lobby Washington before, often to argue for more lenient treatment under federal law. But on Thursday, buoyed by a flurry of state decisions that have expanded the legal use of marijuana, the cannabis crowd came less as social activists than as entrepreneurs, asking Congress to remove some of the obstacles that stand in the way of their fledgling businesses.

They met with staff members to ask for changes to the tax code, which prohibits the businesses from taking standard deductions for expenses. And they huddled in congressional offices to make the case for other changes that would encourage banks to work with legal cannabis businesses.

If their aims seemed mundane, even technical, it was a measure of  how far the marijuana movement has come in just a few years. Medical marijuana is now legal in 20 states and the District of Columbia. Last year, Colorado and Washington state made marijuana fully legal for adults, and similar efforts are gathering steam elsewhere in the country. Colorado collected  about $2 million in marijuana taxes in January, the first month that sales for recreational use were permitted — a detail that was mentioned often Thursday.

“This is an issue that is absolutely at its tipping point,” Celinda Lake, a longtime Democratic pollster, said at a Hill briefing organized by the group in a formal room that is usually home to the House Budget Committee. She cited recent polling that shows that younger voters are the strongest supporters of legalizing marijuana, but that backing for legalization is increasing among people of all ages.

The group also heard from Reps.  Earl Blumenauer (D-Ore.),  Dana Rohrabacher (R-Calif.), and  Jared Polis (D-Colo.) , each of whom spoke out in support of some of an array of proposed marijuana-related legislation. They also lamented that Congress has not kept up with the pace of change in the states. “We’re in this never-never land on Capitol Hill,” Blumenauer said. “But we’re watching the rest of America march forward.”

The cannabis association, founded in 2010, counts about 550 member businesses across the country and recently hired its first full-time Washington lobbyist. Fewer than 10 people participated in its first Washington event, in 2011, and last year, about 45 members flew in for Hill meetings.

The industry, now more than ever, operates in an unusual space, legally permitted in some states while largely outlawed at the federal level. This week, with some 55 “cannabis industry professionals” meeting with congressional officials, the group hoped to underscore the role of small businesses in the fast-growing industry and to counter popular perceptions of the drug and its users.

“We’re not the typical face of marijuana,” said Dorian Des Lauriers of Franklin, Mass., an entrepreneur and co-founder of a new laboratory that will test medical marijuana. Des Lauriers, wearing a blue suit and a tie with an American flag design, said he had used his meetings with congressional staffers to talk about Section 280E of the tax code, which prohibits companies involved in drug trafficking from deducting normal business expenses that other legal businesses can claim.

The higher tax burden he faces makes it harder to hire workers, Des Lauriers said. He added that some staff members he spoke with seemed receptive to the group’s proposal, which would allow standard business deductions and tax credits for marijuana-related businesses that comply with state laws.

The group’s other top concern is the limited access to banks that many legal cannabis businesses face, forcing them to operate in cash. Some have trouble getting financing and can’t even maintain checking accounts.

Last month, the Obama administration  gave the banking industry the green light to do business with legal marijuana sellers, part of a push to open up banking access for the industry.

But the cannabis association said federal regulations still require financial institutions to undertake special monitoring of cannabis-related customers to see whether they might be in violation of other laws, making banks hesitant to take on such customers. Legislation backed by the group would provide a legal safe harbor for institutions working with legal cannabis businesses.

“There are small details that need to be taken care of,” said John Davis, co-owner of the Northwest Patient Resource Center, a medical marijuana dispensary in Seattle.

Polis, an outspoken supporter of legalization efforts, provided one bit of intrigue during the mostly serious briefing.

Asked  how many of his colleagues use marijuana , Polis didn’t hesitate to hazard a guess.

“I don’t think more than 5 or 10,” he said. “But I really wouldn’t know because I haven’t seen them use it.”

He then took a more scientific approach, suggesting that members of Congress really are like everybody else. “Remember the demographics,” said Polis, 38. “I don’t know what percentage of 60-year-olds use marijuana, but it’s probably similar in Congress.”