"US issues guidelines to banks on marijuana firms" by Pete Yost | Associated Press, February 14, 2014
WASHINGTON (AP) — The Obama administration on Friday gave banks a road map for doing business with legal marijuana sellers without getting into trouble, a major step by the federal government toward enabling a legalized marijuana industry to operate in states that approve it.
The guidance issued by the Justice Department and Treasury Department was intended to make banks feel more comfortable working with legal marijuana businesses that are licensed and regulated, while preserving the government’s enforcement power.
Why would they be uncomfortable? They launder enough illegal drug money.
Others have a keen interest, too, in a regulated financial pipeline for an industry that is just emerging from the underground. Marijuana businesses that can’t use banks may have too much cash they can’t safely put away, leaving them vulnerable to criminals.
Then the last place they want to put it is in a bank.
And governments that allow marijuana sales want a channel to receive taxes....
That's why they are going along with this. It's not about health or compassion for sick people.
Friday’s move was designed to let financial institutions serve such businesses while ensuring that they know their customers’ legitimacy and remain obligated to report possible criminal activity, said the Treasury Department’s Financial Crimes Enforcement Network, or FinCEN.
The the American Bankers Association said banks will only be comfortable serving marijuana businesses if federal prohibitions on the drug are changed in law.
And as everyone knows, we all exist to make banks feel more comfortable.
State banking regulators in Colorado and Washington appear to believe that mainly small and medium-sized banks will be interested in handling financial transactions with legal marijuana stores, not the big ones, a FinCEN official said, speaking only on condition of anonymity to talk about internal deliberations.
FinCEN writes the rules that US financial institutions must follow to help protect the system from money laundering.
PFFT (blog editor exhales)!
****************
Stuff the Globe left on the tray:
But in response, the American Bankers Association said ‘‘guidance or regulation doesn’t alter the underlying challenge for banks. As it stands, possession or distribution of marijuana violates federal law, and banks that provide support for those activities face the risk of prosecution and assorted sanctions.’’
‘‘This is a decision that each financial institution needs to make on its own,’’ the official said. ‘‘We feel quite comfortable that we have acted within the scope of our authority’’ and therefore don’t expect legal challenges to the new procedures and the financing of terrorism. The office said it expects financial institutions to perform thorough customer due diligence on marijuana businesses and file reports that will be valuable to law enforcement.
Asked about the conflict in federal and state laws on marijuana use, the official said the agency sought to balance competing interests. One of them is the concern about having so much cash on the street without an ability to get those funds into the safety of a bank, or experiences a surge in activity by third parties offering goods or services such as equipment suppliers or shipping services.
Oh, yeah, heaven help the banks if we go to a barter system! Then they won't get their cut and won't be allowed to play with the money! What a $LAVI$H GOVERNMENT!
If a marijuana-related business is seen engaging in international or interstate activity, such as the receipt of cash deposits from locations outside the state, that’s a red flag, too.
Gee, if only they looked so closely at other kinds of drug money laundering, like cocaine and heroin, huh?
Oh, right, BANKS HELPED LAUNDER that dough because it boosted the bottom line for them!
It has been difficult for legal marijuana sellers to operate without banks in the mix.
‘‘It’s not just banks that are wary about handling our money, it’s everybody — security businesses, lawyers, you name it, no one wants to take the risk of taking our money,’’ said Caitlin McGuire, owner of Breckenridge Cannabis Club in Breckenridge, Colo.
McGuire’s shop had an account with a local credit union for years, but the credit union cut them off last year.
‘‘They basically told us they wanted to keep our accounts, but it was too big of a risk. They were questioned by their auditors, ‘Why do you have this marijuana account?’ It just ended up being too much for them.’’
The pot shop now pays its bills with money orders and cash. It’s not easy, McGuire said.
‘‘It’s made it very difficult to pay our bills, to pay our employees, to pay our taxes, to do anything.’’
Currently, processing money from marijuana sales puts federally insured banks at risk of drug racketeering charges, so they've refused to open accounts for marijuana-related businesses.
This has become an issue recently in Massachusetts, as the state issued the first 20 licenses for companies to open medical marijuana dispensaries late last month.
Banks in the state have been wary of doing business with medical marijuana operators, worried about the murkiness of how the law could be interpreted in the future, despite assurances from Attorney General Eric Holder Jr. that legal marijuana businesses should have access to the banking system.
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What was left after they took their drag:
"US offers banks rules on marijuana" by Pete Yost | Associated Press, February 15, 2014
WASHINGTON — The Obama administration on Friday gave banks a road map for doing business with legal marijuana sellers without getting into trouble, a step by the federal government toward enabling a legalized marijuana industry to operate in states that approve it.
The guidance issued by the Justice Department and Treasury Department was intended to make banks feel more comfortable working with marijuana businesses that are licensed and regulated, while preserving the government’s enforcement power.
Others have a keen interest, too, in a regulated financial pipeline for an industry that is just emerging from the underground. Marijuana businesses that can’t use banks may have too much cash they can’t safely put away, leaving them vulnerable to criminals. And governments that allow marijuana sales want a channel to receive taxes....
Woah. Deja vu head rush.
Processing money from marijuana sales can put federally insured banks at risk of drug racketeering charges.
They closed the account and refused to print the phrase from above. Why?
Friday’s move was designed to let financial institutions serve such businesses while remaining obligated to report possible criminal activity, said the Treasury Department’s Financial Crimes Enforcement Network, or FinCEN.
It’s unclear whether additional guidance will ease bankers’ concerns, since banks will still have to do significant research on marijuana companies and fill out paperwork for marijuana-related transactions.
Shouldn't be a problem; they can fraud it up and robosign it like they did on fraudulent foreclosures.
A financial services trade group expressed misgivings, saying the guidelines don’t go far enough in protecting banks.
‘‘After a series of red lights, we expected this guidance to be a yellow one,’’ said Don Childears, chief executive of the Colorado Bankers Association. ‘‘This isn’t close to that. At best, this amounts to ‘serve these customers at your own risk’ and it emphasizes all of the risks. This light is red.’’
The American Bankers Association said banks will only be comfortable serving marijuana businesses if US prohibitions on the drug are changed in law.
Fine. I'm all for that.
State banking regulators in Colorado and Washington appear to believe that mainly smaller banks will be interested in handling financial transactions with legal marijuana stores, not the big ones, a FinCEN official said, speaking only on condition of anonymity.
$melling like a better deal already.
FinCEN writes the rules that US financial institutions must follow to help protect the system from money laundering....
(Blog editor giggles)
"Massachusetts health department will do additional checks on marijuana dispensaries" by Kay Lazar | Globe staff, February 15, 2014
State health officials will post a list early next week of rigorous checks they say they will conduct on recipients of licenses for medical marijuana dispensaries amid growing complaints that firms misrepresented support they have received from municipal leaders....
Related: Mass. Marijuana License Process Leaves Lingering $tench
Related: Mass. Marijuana License Process Leaves Lingering $tench
“This process is nowhere near done,” Karen van Unen, director of the state’s medical marijuana program, said in an interview....
Van Unen said her agency will be meeting with executives from each company starting the week of Feb. 24 to further scrutinize statements made in applications regarding management structure, projected budgets, municipal support, and operating procedures....
The department also plans to establish monthly meetings with local leaders in the communities where dispensaries are preparing to open, to ensure companies are complying with local rules, van Unen said....
--more--"
Related: DPH should reveal scoring data on marijuana dispensaries
"In the pot business, the more regulated you are by a state, the more certainty you have that the federal government will leave you alone. If regulations are what you crave, it just doesn’t get better than Boston....
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Prices are down to $18 for a bag, just a normal day in Colorado.
The last I remember was the burnt lips I got from the Globe
"Key figure in Brockton marijuana business faced lawsuits" by Kay Lazar and Shelley Murphy | Globe staff, February 20, 2014
A prominent South Shore businessman who has been sued by creditors for hundreds of thousands of dollars in debts run up by health facilities he co-owned is a key player in a company recently awarded a state license for a Brockton medical marijuana dispensary.
State is really picking through the applicants with a fine-tooth comb, huh?
Douglas Noble was listed as the chief executive of In Good Health Inc. on the company’s initial application for a dispensary license, but was replaced by his son on the final application and now is listed as an adviser for compliance with government regulations. That change exempted him from a state background check that probably would have turned up his financial difficulties.
Sounds like a casino application.
Among the suits is one filed last year by the widow of a former NFL player who says Noble bought her husband’s health clubs after he died, then reneged on their deal and still owes her about $400,000 from the sale.
The questions about Noble and In Good Health are just the latest problems that have come to light about some of the businesses awarded the state’s first 20 dispensary licenses last month.
Which reminds me. Light that up, will ya'?
Several others either shuffled top executives at the last minute or failed to disclose a major investor, with the effect in one case that state regulators did not learn of a bankruptcy....
--more--"
Related: Marijuana firms weigh legal action
Who bogarted the joint?
"William Delahunt group would reap from licensing deal" by Kay Lazar and Shelley Murphy | Globe Staff, February 26, 2014
A nonprofit company led by former congressman William D. Delahunt, which received three coveted state licenses last month for medical marijuana dispensaries, intends to give 50 percent of the company’s revenue to a management firm that is controlled by Delahunt and his business partners in the marijuana dispensary.
In its license applications, Delahunt’s dispensary company, Medical Marijuana of Massachusetts, projected it would earn revenue of roughly $49 million in the first three years from the dispensaries in Plymouth, Mashpee, and Taunton, meaning the management company would get at least $24 million.
Delahunt is listed as one of six managers of Triple M Management Co. LLC, but the application does not spell out Delahunt’s share of income from the management company.
The agreement to give half of the marijuana company’s revenue to the management firm is buried in the three 180-plus-page applications filed by Medical Marijuana. The arrangement was described as “laughable” by the owner of an Andover-based consulting practice that focuses exclusively on nonprofits. “It’s completely excessive,” said Thomas A. McLaughlin of McLaughlin & Associates.
You might want to check the weight of the bag!
None of the 17 other applicants awarded provisional licenses last month described a similar arrangement with a management company that would receive large payments from the nonprofit dispensaries, according to the Globe’s review of the applications.
Reached on his cellphone Tuesday night in Colombia, Delahunt said the agreement with the management company described in the applications is “an earlier draft that I have nothing to do with.”
“I know we are rewriting it,” Delahunt said. He also said he is a minority stockholder and a passive investor in the management company. He declined to say what his share of the company was, but described it as “a very small percent.”
They are justing using your name and influence, 'eh?
Delahunt said the 50 percent of revenues going to Triple M was to pay back investors. “They have to get a return on their money,” he said. “It’s not some huge gift.”
Honestly, folks, I'm sick of that undergirding every f***ing industry and every action of society. It's all about making a buck. Leave it to government to spoil the weed industry, with it's abysmally low profit margins.
In addition to the 50 percent of revenues Delahunt’s management company would receive, it also is slated to earn 8 percent annual interest on $2.47 million it loaned to the dispensary firm for its startup costs, according to the applications filed with the state health department.
Oh my flipping.... cough, cough, cough, cough!
Delahunt also is supposed to receive a $250,000 annual salary as chief executive of the marijuana company, according to the applications — although he has said he doesn’t expect to be paid a salary for the first several years while the business is getting off the ground.
The salary doesn't bother me so much; it's chump change compared all other industries.
Delahunt’s business arrangement is cited in a lawsuit filed Tuesday in Suffolk Superior Court on behalf of a Needham company, 1 Relief Inc., which was unsuccessful in its bid for a marijuana license, and is seeking to block the state Department of Public Health from finalizing the 20 provisional licenses it awarded last month.
The suit, filed against the health department and state officials, contends that the department violated state procurement rules in awarding the licenses.
“Everything from beginning to end the Department of Public Health did wrong,” Robert Carp, a Newton lawyer who is representing 1 Relief, said in an interview.
“The money has to be for the patients,” said Carp, who was an applicant for a license himself in an earlier round of consideration. “It’s hard to be patient-centric when you are collecting $250,000 a year in a job you have no training for, and then adding half of the revenue of the managed company that you also control.”
The Globe has reported that Delahunt and all the other top executives in his dispensary company are keeping their full-time jobs and will not be running the firm’s cultivation and dispensing operations.
David Kibbe, a spokesman for the Department of Public Health, said in an e-mailed statement, “No provisional licenses have been handed to applicants. None will be until they clear our verification phase. We do have 20 applicants approved for provisional status, but they have not been given provisional certificates at this point.”
McLaughlin, the Andover consultant, said it’s unusual for a nonprofit to hire a management company, and unheard of that it would take 50 percent of revenues.
“Under no circumstances can I imagine that management would take 50 percent of every revenue dollar,” he said. “What product do you buy or get where you are paying for mostly management?”
Banking services?
He compared the state’s fledgling medical marijuana industry to “the business equivalent of the wild, wild West.”
“If I were on the nonprofit and somebody came in with that deal, I would have laughed them out of the boardroom,” he added.
McLaughlin said that such an arrangement places officers of a nonprofit at risk of being charged with violating their fiduciary duty to the organization.
Since the department awarded the provisional licenses in late January, the Globe and other media have reported that a number of the companies awarded licenses made misstatements in their applications about local support and the agency has acknowledged it didn’t check the veracity of companies’ claims during the evaluation process.
I'm so glad the Globe is sitting in the corner drawing in second-hand smoke.
Questions also have been raised about possible conflicts of interest between the agency and some of the winning applicants. Public Health Commissioner Cheryl Bartlett held fund-raisers for Delahunt in the mid-2000s when he was still in Congress, though she said she was not involved in the final selection of winning companies.
Oh, they muster have missed that through the haze of smoke.
The suit lists more than a dozen examples of what appear to be significant mistakes in projected budgets, cultivation plans, and federal tax calculations in applications of the winning companies. The suit contends these should have automatically disqualified the companies from receiving a license under the state’s procurement rules.
“We expect to have a ferocious fight on our hands,” Carp said. “But we believe if a judge understands the information before him, he will see there are too many mistakes to award something this valuable to people who have violated the guidelines.”
Let's all sit down, smoke a joint, and forget about what we were going to fight about.
--more--"
"Mass. mellow on marijuana licensing" by Shirley Leung | Globe Columnist, February 26, 2014
John Polanowicz, the state’s secretary of health and human services, sounds awfully mellow for someone whose agency seems to have bungled the way Massachusetts has handed out its first batch of pot licenses.
But don’t worry, he tells me, every little thing is going to be all right about how we dispense medical marijuana. In fact, the system is working as it should, according to Polanowicz. Better we learn now, even if it’s through the media, of problems with some of the applicants — before they’re growing and selling weed.
“The analogy is going through a job search,” said Polanowicz, ever so politely and calmly, in a phone interview Tuesday. “You go through a large number of applicants. We have finalists. Like any job search, you start to call references.”
Wow, that explains everything, really. I mean, who doesn’t offer someone a job and then check their references? That’s Human Resources 101, right?
Maybe this rather unorthodox hiring approach is the reason why it’s just coming out now, thanks to my Globe colleagues, that two of the 20 finalists for licenses may have lied about their local support. Another finalist has been sued by creditors for hundreds of thousands of dollars, while one other failed to disclose a key player who filed for bankruptcy.
If they had lied about a war it would be no big deal.
Polanowicz said “thorough” background checks have already been conducted, but more verification will be done before anyone opens for business.
“Right now, no one has a license to operate a dispensary,” he said. “Really, we’re right in the middle of intense vetting.”
Halfway through the conversation, I began to wonder if he was smoking something.
Related: “You know there’s a problem when the guy who is supposed to be in charge has a bag of crack on his desk for no apparent reason.”
Here we are ushering in a controversial new business that is illegal in most other states and arguably the gateway to legalizing recreational marijuana use in Massachusetts.
Related: Marijuana May Become Legal in Massachusetts
Also see: Heroin is Here
Which gateway you wanna take?
The process to get one of 35 licenses should be a lot a tougher than this. Don’t even get me started on how a team led by former congressman Bill Delahunt could get three of the coveted licenses.
The more I learn, the less I like about how the state operates — something you hear a lot these days about the fading Patrick administration.
Yeah, hi. I've been here blogging about it for eight years. Welcome aboard. Where ya' been?
The Department of Public Health, for example, is just now conducting face-to-face interviews with all 20 finalists, as they’re calling them now. Back in late January, when the state revealed its selection, they sounded like they would be the designated pioneers in the state’s medical marijuana industry, barring any issues with local permits.
But Polanowicz emphasized that these 20 teams only have “provisional status,” and that meetings over the next month will help determine whether they will get licenses. The secretary said he wants to “make sure we get it right,” and “we also want to make sure we get the right people.”
Then the former hospital president and former Army commander repeated to me what he’s told others about applicants that may have tried to pull a fast one on the state.
“If they’ve lied or misrepresented their applications, they won’t get a license.”
Or his agency could have done what the state gaming commission did. Casino license applicants had to pass the commission’s background check before they could even complete an application. Imagine that. Weed out all the bad seeds at the start.
Related: Caesars Sues Crosby
Looks like you missed a seed.
And these background checks were rigorous. No honor system here. The 11 casino and slots applicants had as many as 100 investigators combing through their business. State troopers, former FBI agents, forensic accountants, and prosecutors — I mean, who wasn’t involved in vetting casino operators?
And it was still full of corruption!
All of this made me wonder, why is the state approaching these two types of licenses so differently, even though the stakes are high in each case?
In part, it’s how these vices became law. In the case of gaming, the Legislature spent years crafting the statute, backed by voluminous research and public debates, allowing for more thoughtful implementation.
What a shining rewrite of what took place regarding bringing casinos to the state.
Medical marijuana, on the other hand, was put on the ballot in 2012 by a patient-advocacy group. To everyone’s surprise, voters passed the initiative, and while the group did its homework designing the law, there was a lot left for state officials to do on a tight deadline.
Yeah, can't have those voters deciding what they want, not in a democracy.
With one jilted applicant having filed a lawsuit and others threatening action over the process and the Legislature ordering a review, would Polanowicz consider a do-over?
Can't do it for Obummercare, sorry.
“Why would we throw out a process that is revealing things?” he said.
Hmm, I might just have to put that in my pipe and smoke it.
--more--"
Also see: To help craft beers flourish, give brewers more freedom
Honestly, I'm tired of the whoreporate pre$$ pushing alcohol.
NEXT DAY UPDATES:
"DeLeo wants marijuana licenses reviewed" by Kay Lazar and Shelley Murphy | Globe Staff, February 27, 2014
House Speaker Robert A. DeLeo on Wednesday stepped up his criticism of the Patrick administration’s handling of medical marijuana licenses, saying state health officials must go back and thoroughly review all 20 provisional licenses they recently awarded to avoid having to restart the entire process....
Related: Shining a Light on Patrick's Legacy
Makes it stink just a little more.
In an interview Tuesday night with NECN’s Jim Braude, DeLeo said he believed the Department of Public Health, which awarded the licenses last month, should probably start the process over....
Which means suffering people are going to have to wait even longer for medicine.
This from the same guy who rammed casinos through the State House, and whose selection process has been filled with conflicts-of-interest and corruption.
--more--"
"Speaker Bob DeLeo likes Facebook, site unseen" by Shirley Leung | Globe Staff, February 14, 2014
House Speaker Bob DeLeo doesn’t know how to post anything on Facebook. He has no idea how to tweet. He doesn’t use e-mail. He doesn’t have a computer on his desk. And his cellphone? Until recently, it was a Motorola flip phone, better suited for the Smithsonian than someone’s jacket pocket.
Then he's really an out-of-touch moron, huh?
But in this contradiction there is a lesson in how a 63-year-old lunch bucket Democrat, whose old idea of economic development centered around slots, has become one of the biggest champions of our innovation economy.
Just ignore the overflowing corporate and lobbyi$t ca$h in that lunchbox.
“Whether one is fluent in technology or not is not relevant,” said Pat Larkin, director of the Innovation Institute at the Massachusetts Technology Collaborative. “The speaker is knowledgeable and fluent in getting things done. That’s what the innovation economy needs.”
Among DeLeo’s key initiatives is a $1 million program to subsidize internships at local tech companies. About 100 college students have gotten internships so far, with the idea that if they had a good experience they might stay in the state after graduation. He also helped create a $15 million research and development fund to encourage innovation clusters statewide.
They don't get paid for being an intern, so the dough is all a giveaway to business from this tech bucket Democrap.
DeLeo has met with other tech firms from Dell to Google, but he began liking Facebook two years ago when he read Zuckerberg, who started the firm in his Harvard dorm, might have stayed in Massachusetts to build his social media empire. DeLeo had this idea to write an open letter to the wunderkind to tell him what’s changed since he left in 2004.
Why don't you just drop to your knees and unzip fly?
When the speaker shared his harebrained idea with longtime ally, then state Representative Kathi-Anne Reinstein from Revere, she laughed. “You don’t even have a Facebook page,” Reinstein reminded him.
Medical pot is a problem, beer i$ funny.
“Yeah, I know,” DeLeo replied, but “this is good for Massachusetts.”
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