Cannabis is still a politically charged subject with millions of advocates and opponents. In the beginning of his term, Trump had Peter Thiel who is a heavily invested partner in Privateer, in one ear and Jeff Sessions whispering in the other. Both are long gone. The Federal government still has the plant as a Schedule 1 drug, but there is some hope with a Democratic administration … 35 states have approved medicinal and 18 recreational.
Many of the nation’s founders have grown and profited from hemp: marketed as CBD. In Chinese culture cannabis was used medicinally. Persians, Henry VIII, Queen Victoria, and Bill Clinton along with Barack Obama have confessed being users. When Lewis Powell retired from the Supreme Court, Ronald Reagan appointed Robert Bork, but when he was rejected Douglas Ginsburg was nominated and he lost out when Nina Totenberg (a journalist) exposed his weed-smoking behavior. Al Gore and Bruce Babbitt, two presidential candidates admitted to use. George W. Bush was a smoker. Rand Paul, a medical doctor was one of the first public officials to advocate for reform with his Compassionate Access Research Expansion and Respect States Act. Bernie Sanders has proposed new policies on the subject.
Other political candidates who are supporters and elected officials include Steward McKinney, Newt Gingrich, Judd Gregg, Olympia Snowe, Tom Harkin and Jeff Jeffords. These are noteworthy folks, but in their time they were not listened to.
With each new state electing either recreational or medicinal or both, it is obvious that no two states have identical legal frameworks. Some have been modeling statutes after alcohol and pharmaceuticals. The insurance industry is struggling to keep up and make sure that insureds are complying.
Because of these subtle but important reforms almost 200+ million Americans live in states where some form of canna is legal. New research shows that some illnesses/conditions as AIDS, chemotherapy side effects, multiple sclerosis, chronic pain, epilepsy and many other issues can be ameliorated with cannabis utilization.
From a financial perspective, the tax problem is vexing. Section 280E of the IRS code says that a company trafficking in a Schedule 1 or Schedule 2 substance cannot take deductions. The tax code does demand that all businesses file returns and most, but not all are doing so for the Federal and State entities. Under a soft agreement, these businesses are not yet being targeted unless there is tax fraud or evasion. So, how are the governments to collect their due? This question is still in abeyance.
In our next issue we will discuss the financial ramifications for the insurance industry facing these vexing statutory contradictions and provide you the reader with a short history of insurance through the millennia: a fascinating bit of information…