On November 8, 2016, American voters reshaped
the political landscape by electing a new—and in
many cases not so new—Congress, president and,
by proxy, U.S. Supreme Court Justice. While national
races tended to steal the spotlight, important decisions were
made at the state level, too. Marijuana was a hot topic, with
several states voting to legalize the drug for either medicinal
or recreational uses.
The legalization of marijuana at the state level has gained
momentum since California first legalized medical marijuana in 1996. According to a recent Gallup poll, the number of
adults that report being current marijuana users has almost
doubled from 7 percent in 2013 to 13 percent in 2016. Over
60 percent of Americans now support the decriminalization
of marijuana. As of this writing, a total of eight states have
legalized recreational marijuana, while 28 states, plus the
District of Columbia, have legalized medical marijuana.
Though property owners and managers may have mixed
opinions on legalization, some have embraced it as a means
to increase commercial and residential property values.
Strict zoning laws and significant infrastructure modifications mean tenants tend to stay longer. Still, some look at it as
carrying too much risk. Property managers have voiced concerns associated with increased crime from having so much
cash on hand, the possibility of mold growth, fire hazards
associated with lighting equipment and complications with
the high amount of electricity needed for growing marijuana
Regardless of one’s personal feelings on the issue, it is hard
to imagine the trend reversing anytime soon. It is important
to remember, however, that under federal law marijuana is
still classified as a Schedule I controlled substance. This classification creates complications with banking, taxation and
other federal regulations. Some federal agencies have issued
statements saying they would not go after marijuana-related
businesses that are legal under their state’s laws. However,
this has done little to comfort those businesses, as an informal statement does not carry the same assurance as legislation and can be changed at any time.
There are calls for Congress to decriminalize marijuana.
In August 2016, the National Conference of State Legislatures (NCSL), a bipartisan organization comprised of state
legislators and their staff, adopted a resolution urging the federal government to amend its laws to explicitly allow states to
set their own marijuana policies without federal interference.
The NCSL does not support or oppose legalization but supports the state’s ability to make that determination. In February 2015, Colorado Congressman Jared Polis introduced
the “Regulate Marijuana Like Alcohol Act” (H.R. 1014), to
remove marijuana from the Controlled Substances Act and
transfer its oversight from the Drug Enforcement Agency to
the Bureau of Alcohol, Tobacco, Firearms, and Explosives.
H.R. 1014 was referred to the Subcommittee on Trade on
March 27, 2015, and was not moved.
One of the business functions most affected by the current
classification is banking. Banks are prohibited from accepting money tied to illegal activity. This has forced marijuana-related businesses to be almost entirely cash-based. Some
businesses use temporary workarounds such as private banks
catering exclusively to marijuana businesses. Using these
banks is not ideal as they do not carry benefits associated
with being federally regulated, such as FDIC insurance.
They also tend to be costly. In Illinois, there are two banks
catering to marijuana businesses; one charges $350 per deposit, and the other charges $1,000 per month plus an additional $50 per deposit. Other businesses gamble on using
traditional banks by opening accounts under the guise of
non-marijuana-based businesses. While this may work for a