Cannabis Trade Group Hires Lobbyist Firms to Improve Bank Access
The National Cannabis Industry Association, a national trade group, is expanding its advocacy efforts on Capitol Hill to address the industry’s top federal priorities—access to basic banking services and fair federal taxation.
The new partnerships follow the association’s hire of a full-time lobbyist in 2013, NCIA Deputy Director Taylor West told MJINews. “Now is a good time for us to step up to yet another level by expanding that lobbying team and bringing on these firms,” West said. “Bringing on these two firms is a big step forward for us, but also a very real indicator of the fact that we as an industry are taking our legislative strategy very seriously. We recognize the benefits of bringing in highly skilled people who work in this environment.”
Both firms have deep relationships with members of Congress, West said, noting that both firms have also worked together in the past. Heather Podesta + Partners denied MJINews’ request for comment and Jochum Shore & Trossevin PC did not respond by the time of publication. “One of these firms has strong relationships on the Democratic side, and the other on the Republican side,” West said. “Working together these two firms can help us reach a bipartisan coalition.”
Jochum Shore & Trossevin PC has worked with companies including Snapchat, and Heather Podesta + Partners has worked with businesses including food technology company Hampton Creek, according to the firms’ websites. “We like that both firms have done a fair amount of work in the tech sector,” West said. “Many of their clients are companies that are pushing the envelope in an industry where Congress is struggling to catch up legislatively, and we see a lot of parallels [between the tech and cannabis sectors]. The cannabis industry is growing and evolving so quickly, and Congress is behind the curve.”
NCIA is made up of nearly 1,000 member-businesses in the legal cannabis industry nationwide, and the association is primarily focused on a lack of access to banking and a punitive provision in the federal tax code that forces many cannabis businesses to pay double or triple the effective tax rates of any other legal business. “These are major issues in our industry right now,” West said.
Because financial institutions are regulated at the federal level, most banks and credit unions have been reluctant to provide even basic banking services to businesses involved in state-legal marijuana industries, whether medical or retail. The result is that many businesses in the industry are forced to operate entirely in cash, creating significant safety concerns as well as making accountability and transparency more difficult.
Linda Navarro, head of the Oregon Bankers’ Association, recently told Northwest Public Radio that many banks would be happy to offer services to legal marijuana business owners, but the federal barriers are too great.
“It’s a matter of the regulatory structure that banks have to follow at the federal level,” Navarro said. “Marijuana-related businesses are treated much different by the regulators than other types of legal businesses.”
In addition, section 280E of the Internal Revenue Code prohibits businesses involved in “drug trafficking” from deducting most normal business expenses from their taxable income. “The provision dates to the 1980s and was never intended to apply to businesses operating legally under state law, but its result is to create tax burdens for state-legal cannabis businesses that can be 70 percent to 90 percent of the business’s profit,” NCIA said in a press release. “These unfair tax burdens make it difficult, if not impossible, for businesses to grow, hire more employees, pay higher salaries or increase benefits, and otherwise contribute to their local economies. It also disproportionately hurts those businesses trying the hardest to play by the rules.”
In the five years since NCIA was formed, the association has gone from seeking to have the cannabis industry’s issues taken seriously to bipartisan legislation introduced in both chambers. Teaming up with these two firms just might be what the industry needs to revolutionize the way those in the sector do business.
The post Cannabis Trade Group Hires Lobbyist Firms to Improve Bank Access appeared first on MJI News.