Legal Cannabis Is Here to Stay, and Consumers and Entrepreneurs Deserve Safe Banking Options

On Wednesday, US Rep. Gregory W. Meeks (D-NY) will lead a subcommittee hearing on access to banking services for cannabis-related businesses.

For hundreds of millions of Americans across the country, cannabis is no longer the “reefer madness” street drug it once was.

Much like alcohol before it, the cannabis plant has evolved from a narcotic trafficked across borders and sold on the black market into one of the most sought-after products in legitimate commerce, bought by consumers who seek its medical or therapeutic benefits.

In states where cannabis is legal for recreational or medical use, there are now thousands of cannabis-related businesses that buy and sell goods and services, estimated to be worth over $50 billion nationally. These states have, in the spirit of the American federal system, pursued their own economic and legal experiments, or “laboratories of democracy.” And they have been wildly successful.

The $1.4 billion in total cannabis sales in the state of Colorado last year and the $266 million in tax revenue point to this. California’s cannabis market is projected to be worth $7.7 billion by 2022.

Employees can themselves have their accounts shut down for even receiving a dime.

And yet, though 33 states have some measure of regulated cannabis laws and thousands of employees and consumers, the vast majority of cannabis-related businesses remain unbanked—without bank accounts and dealing only in cash. While nearly one-third of the country’s population lives in a state where cannabis can be purchased legally, the federal government still classifies it as a Schedule 1 narcotic without any medical benefit and with a high potential for abuse.

If any bank accepts deposits from a firm dealing in cannabis, it risks losing the guarantee on its deposits from the Federal Deposit Insurance Corporation, not to mention their federal banking license and the pressure from the IRS and federal investigators.

That means all businesses in the cannabis space operate in risky territory: The federal government considers them outlaws, banks won’t even touch their money, and they’re forced to deal only in cash. Employees can have their accounts shut down for even receiving a dime from their cannabis employers, and existing dispensaries are always at risk of being raided by law enforcement.

For the price-conscious digital millennial, an additional 20 percent markup on legal cannabis is a nudge to revert to the black market.

Higher risk means cannabis companies face additional costs. They have to hire security guards for transporting cash and paying local and state taxes, hire additional accountants to understand how to comply with existing rules, and dedicate hours to organizing cash for payroll and business expenses. That ends up raising the cost of the product.

For the price-conscious digital millennial who can compare prices at the swipe of a phone, an additional 20 percent markup on legal cannabis is a nudge to revert back to the unregulated black market where cannabis is relatively inexpensive. That not only risks consumer safety, but it also deprives governments and local communities of tax revenue.

At least some lawmakers, however, are voicing this concern and are prepared to act.

On Wednesday, US Rep. Gregory W. Meeks (D-NY) will lead a subcommittee hearing on access to banking services for cannabis-related businesses.

The committee will hear from law enforcement, credit union representatives who have risked accepting cannabis clients, and state administrators who are dealing with their own crises in cannabis banking.

Whether or not to legalize cannabis is now a foregone conclusion. We’re living in the legalization moment, and Colorado, Washington, Oregon, and other states have opened the door.

Whether those voices will be enough to push Congress to enact change remains to be seen, but there is at least hope for the thousands of entrepreneurs and consumers who are seeking certainty.

If entrepreneurs in the cannabis industry will be able to access capital and loans similar to firms in practically every other industry, that means they will be able to grow their operations, hire more employees, and make investments—and consumers will be better off for it, not to mention cash-strapped state and local communities.

Whether or not to legalize cannabis is now a foregone conclusion. We’re living in the legalization moment, and Colorado, Washington, Oregon, and other states have opened the door. Now, our country must choose whether or not to embrace the successes of our state “laboratories of democracy,” which have proven that legalization works, and offer solutions to legitimize cannabis.

The next question is whether federal and state jurisdictions will adopt “smart” legalization that encourages markets, competition, safety, and the eradication of the black market. That’s how consumers and entrepreneurs will reap the most benefits and how cannabis can enjoy the mature industry status that alcohol has enjoyed for close to a century since the end of prohibition.

Originally published at https://fee.org/articles/legal-cannabis-is-here-to-stay-and-consumers-and-entrepreneurs-deserve-safe-banking-options/

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About Yaël Ossowski

Yaël Ossowski is a journalist, activist, and writer. He's currently deputy director at the Consumer Choice Center, and senior development officer for Students For Liberty. He was previously a national investigative reporter and chief Spanish translator at Watchdog.org, and worked at newspapers and television stations across the country. He received a Master’s Degree in Philosophy, Politics, Economics (PPE) at the CEVRO Institute in Prague. Born in Québec and raised in the southern United States, he currently lives in Vienna, Austria.

Do credit unions still warrant a tax exemption?

AMERICAN BANKER MAGAZINE: Yael Ossowski, the deputy director at the Consumer Choice Center in Washington, D.C., said he began to pay more attention to credit union taxation after being struck by the presence of several large credit unions in his home state of North Carolina.

“The huge footprint with a lot of these credit unions sparked my curiosity,” Ossowski said. “I wanted to know what the difference between banks and credit unions is and I discovered there isn’t much anymore.”

He made his views public in September, publishing an op-ed in the Charlotte Observer urging elimination of the tax exemption.

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About Yaël Ossowski

Yaël Ossowski is a journalist, activist, and writer. He's currently deputy director at the Consumer Choice Center, and senior development officer for Students For Liberty. He was previously a national investigative reporter and chief Spanish translator at Watchdog.org, and worked at newspapers and television stations across the country. He received a Master’s Degree in Philosophy, Politics, Economics (PPE) at the CEVRO Institute in Prague. Born in Québec and raised in the southern United States, he currently lives in Vienna, Austria.

Cryptocurrency Regulations Should Not Stifle the Innovative Potential of Blockchain Technology

By Nur Baysal | 12. February 2018

Recently, the prices of cryptocurrencies like Bitcoin and Ethereum made new headlines: After reaching a staggering all-time-high of $19,783 in December, the price of Bitcoin lost more than half of its value in January and February, dragging the price of other cryptos down alongside it.

During this time, a plethora of news stories tinted cryptocurrencies in a negative light – from Facebook banning ads for cryptocurrencies and ICOs to China restricting access to foreign crypto exchanges for its citizens and lastly, banks banning cryptocurrency purchases on their credit cards.

It is not news that volatility in the crypto markets exceeds that of traditional stock exchanges by a couple of magnitudes. From late 2013 to early 2015, cryptos underwent a draining bear market that came to an end with exponential price explosions in the following bull market.

Shortly following any crash of cryptocurrencies, some people feel validated to voice their prediction of the end of Bitcoin and cryptocurrencies and call for harsher crackdowns of the technology as a whole. In some, this volatility awakens a deeply-entrenched skepticism of a new technology that’s still in its infancy.

But this overly conservative regulatory approach is a danger to the innovative potential of blockchain technology. Instead of focusing on the volatile nature of the crypto market and equating it with manipulation or dismissing it as a sheer gamble, crypto skeptics should learn more about the transformative nature of the technology behind many cryptocurrencies.

Despite their popular label in the media, many of them are not, in fact, primarily currencies.

The use cases of distributed ledger technology span from delivering aid efficiently to refugees, using blockchain to build a digital identityenabling scientists to use your safely stored genomic data and a myriad of other fields of application.

Many crypto skeptics refuse to inform themselves on the multitude of use cases of blockchain technology across several industries. Solely focusing on the volatile price does not leave enough room to ponder upon the many ways this newly emergent technology might change our lives in the near future.

During the recent Senate hearing on cryptocurrency regulations, the chairman of the United States Commodity Futures Trading Commission (CFTC) J. Christopher Giancarlo had some encouraging words for the primarily younger generation interested in blockchain technology.

Talking about his niece’s interest in Bitcoin, Giancarlo stressed that any future regulations should not be dismissive, but rather respectful of the younger generation’s fascination with blockchain technology:

“It strikes me that we owe it to this generation to respect their enthusiasm about virtual currencies with a thoughtful and balanced response, not a dismissive one,” said Giancarlo.

Elaborating further, Giancarlo stressed that regulators should have a positive outlook on the future of this technology. While doing so, he seemed quite knowledgeable, even going as far as explaining the meaning of crypto-related terms like ‘HODL’ and ‘kimchi premium’.

For Giancarlo, regulating cryptocurrencies should have the aim of cracking down on fraudsters and fight market manipulation, not to stifle the flourishment of a new technology whose many advantages he acknowledged.

In this way, consumers should be given the opportunity to educate themselves on the different use cases of blockchain technology and have the liberty to invest in projects they deem promising.

Instead of stifling innovation and consumer choice, such a regulatory framework that provides enough space for creative exploration would ensure that future advancements in the cryptosphere are acknowledged as such and gradually find themselves changing traditional banks, corporations, and government operations.

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About Nur Baysal

Nur Baysal is a Technology and Disruption Fellow at the Consumer Choice Center and Research Associate at the Competitive Enterprise Institute. A philosophy major, she is especially interested in the intersection between creativity and technological innovation.

Europe has the potential to become the global blockchain powerhouse – Let’s not miss it!

VOCAL EUROPE: The last year marked unseen price surges of cryptocurrencies. Now 2018 seems to challenge Bitcoin and Co. on how resilient these innovations and their investors will be. Though blockchain is famous for creating a new class of millionaires it provides many applications beyond mere cryptocurrencies including identification, verification, immutable databases and many more.

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About Fred Roeder

Fred Roder has been working in the field of grassroots activism for over eight years. He is a Health Economist from Germany and has worked in healthcare reform and market access in North America, Europe, and several former Soviet Republics. One of his passions is to analyze how disruptive industries and technologies allow consumers more choice at a lower cost.

Fred is very interested in consumer choice and regulatory trends in the following industries: FMCG, Sharing Economy, Airlines.

In 2014 he organized a protest in Berlin advocating for competition in the Taxi market.

Fred has traveled to 100 countries and is looking forward to visiting the other half of the world’s countries.

Among many op-eds and media appearances, he has been published in the Frankfurter Allgemeine Zeitung, Wirtschaftswoche, Die Welt, the BBC, SunTV, ABC Portland News, Montreal Gazette, Handelsblatt, Huffington Post Germany, CityAM. L’Agefi, and The Guardian.

Since 2012 he serves as an Associated Researcher at the Montreal Economic Institute.

Consumer Choice Center Calls for End to CU Tax Exemption

ABA BANKING JOURNAL: CCC calls on the Trump administration and Congress to take steps to eliminate the credit union tax exemption as part of the broader plan to reform the U.S. tax code.

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About Yaël Ossowski

Yaël Ossowski is a journalist, activist, and writer. He's currently deputy director at the Consumer Choice Center, and senior development officer for Students For Liberty. He was previously a national investigative reporter and chief Spanish translator at Watchdog.org, and worked at newspapers and television stations across the country. He received a Master’s Degree in Philosophy, Politics, Economics (PPE) at the CEVRO Institute in Prague. Born in Québec and raised in the southern United States, he currently lives in Vienna, Austria.

Why should banks pay taxes while credit unions get a break?

CHARLOTTE OBSERVER: If Congress and the administration are serious about making America’s tax structure fairer, their first action should be to end the free ride enjoyed by large credit unions at the expense of banks and taxpayers.

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About Yaël Ossowski

Yaël Ossowski is a journalist, activist, and writer. He's currently deputy director at the Consumer Choice Center, and senior development officer for Students For Liberty. He was previously a national investigative reporter and chief Spanish translator at Watchdog.org, and worked at newspapers and television stations across the country. He received a Master’s Degree in Philosophy, Politics, Economics (PPE) at the CEVRO Institute in Prague. Born in Québec and raised in the southern United States, he currently lives in Vienna, Austria.