Time To Get High On Marijuana Investing? – InsuranceNewsNet

InsuranceNewsNet — Your Industry. One Source.™

Sign in
  • Subscribe
  • About
  • Advertise
  • Contact
Home Now reading Top Stories
Topics
    • Life Insurance
    • Annuity News
    • Health/Employee Benefits
    • Property and Casualty
    • Advisor News
    • Washington Wire
    • Regulation News
    • Sponsored Content
    • Webinars
    • Monthly Focus
  • INN Exclusives
  • NewsWires
  • Magazine
  • Free Newsletters
Sign in or register to be an INNsider.
  • INN Exclusives
  • NewsWires
  • Magazine
  • Free Newsletters
  • Insider
  • About
  • Advertise
  • Editorial Staff
  • Contact
  • Newsletters

Get Social

  • Facebook
  • Twitter
  • LinkedIn
Advisor News
Top Stories RSS Get our newsletter
Order Prints
April 13, 2021 Top Stories No comments
Share
Share
Tweet
Email

Time To Get High On Marijuana Investing?

By Steven A. Morelli

With everybody high on cannabis’ potential after New York legalized cannabis, is it a good time to jump into marijuana stock investing?

States first legalized cannabis in 2012, but the business is still in its infancy on a national level. Even though New York just legalized cannabis, it is still a cash business operating outside of federal law, which still considers marijuana a Schedule 1 substance on the same level as heroin.

As a Schedule 1 substance, the federal government says cannabis has “a high potential for abuse, no currently acceptable medical uses,” and “lacks accepted safety for medical uses.”

A majority of states, 36, and the District of Columbia have legalized cannabis for medical use, according to the National Council of State Legislatures, which also said 16 states and D.C. have legalized recreational marijuana, opening it up to 40% of the national population.

It is still a federal offense to distribute marijuana. The only reason states have been able to legalize cannabis and build a market within the state is because the U.S. Department of Justice has yielded to states since President Barack Obama ordered DOJ to back off in 2009.

Although Democrats have been associated with legalizing cannabis, it has some bipartisan support. For instance, John Boehner, the once-staunch anti-pot Republican speaker of the house, is now a spokesman for the industry.

Some things that might change on the federal level:

SAFE Banking Act: The Secure And Fair Enforcement Act has been reintroduced in the U.S. House and Senate. SAFE would allow financial institutions to provide services to cannabis clients without fear of federal penalties, according to the law firm, Foley Hoag. SAFE would establish a safe harbor for depository institutions providing financial services to cannabis businesses by prohibiting federal banking regulators from:

• Terminating or limiting deposit insurance for servicing cannabis clients.
• Prohibiting, penalizing, or discouraging a depository institution from providing financial services to cannabis clients.
• Recommending, incentivizing, or encouraging a depository institution to not offer financial services to cannabis clients.
• Taking adverse or corrective supervisory action on loans made to cannabis clients.
• Prohibiting or penalizing a depository institution for providing financial services to cannabis clients.

The legislation would also tell the treasury department to ensure guidance issued by the Financial Crimes Enforcement Network is consistent with the SAFE Banking Act and does not obstruct financial institutions from providing financial services to cannabis clients.

Although SAFE has bipartisan support in the Democratically-controlled chambers, Foley Hoag said the bill’s passage would still be unlikely without “accompanying removal of cannabis from the schedule of controlled substances and restorative justice provisions to expunge or pardon past cannabis offenses.”

Ending federal prohibition: Senate Majority Leader Chuck Schumer said he plans to introduce legislation removing the barriers to national legalization, along with expunging criminal records, despite President Joe Biden’s reticence. Schumer has said this reform should move in tandem with the SAFE Act.

The new laws would not necessarily legalize marijuana nationally, but they would remove many of the barriers that states and businesses face.

The biggest impact would be allowing full participation of the cannabis industry in the financial system. Retail purchases is still conducted in cash, so businesses have to contend with limited options in the federally regulated banking system.

SEC Joins The Party

The Securities and Exchange Commission has updated its rules to help cannabis companies to raise money, according to the law firm, Harris Bricken.

“This matters to cannabis companies of all types, especially those that want to utilize the available federal exemptions in their securities offerings,” according to a post from Jonathan Bench, Harris Bricken attorney.

The SEC said the amendments will promote capital formation and expand investment opportunities while preserving investor protection. That means cannabis companies would have access to a wider pool of investors.

“We can expect future refinements to the SEC’s rules to provide more opportunities for investors,” Bench wrote, “and more guidance for companies looking for safe harbors from legal snags when dealing with investors.”

Steven A. Morelli is a contributing editor for InsuranceNewsNet. He has more than 25 years of experience as a reporter and editor for newspapers and magazines. He was also vice president of communications for an insurance agents’ association. Steve can be reached at [email protected]

© Entire contents copyright 2021 by InsuranceNewsNet. All rights reserved. No part of this article may be reprinted without the expressed written consent from InsuranceNewsNet.

Older

ACLI Focused On ‘The Big Picture’ When It Comes To Regulation

Newer

Can Life Insurance Be Fun?

Advisor News

  • Lexington native convicted of fraud over $1 billion company faces new charges
  • PERSONAL FINANCE: Understanding wills and trusts in estate planning
  • How to master employee benefits
  • Ohio businessman guilty of investment scheme
  • Layoffs may be on the horizon. Is the unemployment insurance system ready?
More Advisor News

Annuity News

  • Prudential FlexGuard reaches $10B total sales milestone at record pace
  • Retirees can rely on annuities as a source of guaranteed income for life
  • Lottery ticket bought in Illinois wins $1.337 billion
  • Mega Millions becomes Mega Billion for Friday drawing
  • Confused by huge Mega Millions prize? Here are some answers
More Annuity News

Health/Employee Benefits News

  • North Carolina woman convicted in $34 million health care fraud scheme
  • Growing number of workers enroll in high deductible health plans
  • The Schumer-Manchin deal’s ACA provision creates another budgetary ‘cliff’
  • They wanted to stop Obamacare. They may have protected abortion rights in Wyoming instead.
  • Miami doctor sentenced in $38 million health care fraud scheme
More Health/Employee Benefits News

Life Insurance

  • How to get the most out of Life Insurance Awareness Month
  • Life application activity down in July, MIB Index reports
  • Dentist found guilty of murdering his wife for life insurance on African safari
  • Should student loan borrowers also get life insurance?
  • NCOIL resolution: certain enhanced cash surrender value endorsements are violations
More Life Insurance

- Presented By -

How to Write For InsuranceNewsNet

Find out how you can submit content for publishing on our website.
View Guidelines

FEATURED OFFERS

Grow your life insurance business with John Hancock • It’s time to see how our cutting-edge solutions can help you and your clients get to know us.

Press ReleasesAll press releases

  • CybeReady Supports Security Defenses with CISO Toolkit
  • Life and Disability Income Insurance Products from MassMutual Now Available on iPipeline®’s End-to-End Digital Platform
  • Business on the Go with The Crump Mobile App
  • iPipeline® Provides Advisors Excel with Unified Path Toward Accessing Core Data Analytics in Financial Services
  • iPipeline® Adds Speed of Underwriting to Quote Engine with Ethos to Deliver Insurance to Agents in Minutes
Add your Press Release >

Topics

  • Life Insurance
  • Annuity News
  • Health/Employee Benefits
  • Property and Casualty
  • Advisor News
  • Washington Wire
  • Regulation News
  • Sponsored Content
  • Webinars
  • Monthly Focus

Top Sections

  • Life Insurance
  • Annuity News
  • Health/Employee Benefits News
  • Property and Casualty News
  • AdvisorNews
  • Washington Wire
  • Insurance Webinars

Our Company

  • About
  • Editorial Staff
  • Magazine
  • Write for INN
  • Advertise
  • Contact

Sign up for our FREE e-Newsletter!

Get breaking news, exclusive stories, and money- making insights straight into your inbox.

select Newsletter Options
Facebook Linkedin Twitter
© 2022 InsuranceNewsNet.com, Inc. All rights reserved.
  • Terms & Conditions
  • Privacy Policy
  • AdvisorNews

Sign in with your INNsider Account

Not registered? Become an INNsider.