Federal Government: Pot Still Illegal

August 11, 2016 at 8:53 am 4 comments

I’ve written extensively about the hazy state of pot regulation in this country and how it has virtually paralyzed credit unions and banks that might otherwise be willing to provide services to pot businesses.  So I think it is worth noting that sometime today, the DEA will reportedly be rejecting a high-profile petition seeking to remove Cannabis from the Government’s most restrictive drug classification.

New York is one of approximately half the states in the Nation and the District of Columbia that has voted to legalize marijuana to one extent or another.  But banks and credit unions have been justifiably reluctant to provide financial services to pot businesses.  This is because marijuana remains unequivocally illegal under the federal Controlled Substances Act.  In fact, pursuant to the Act, the DEA classifies marijuana as a Schedule I drug, its most restrictive classification.  Critics have argued for decades that this restriction makes it almost impossible to perform the type of scientific research that would determine what medical benefit, if any, pot has.

As explained in this analysis by the Brookings Institute, rescheduling would “not suddenly legalize marijuana” or “solve the policy disjunction that exists between states and the federal government on the question of marijuana legality.”  Those same researchers noted, however, that a successful rescheduling petition would have effects on drug policy since it would be interpreted as recognition by the federal government of accepted medical uses for marijuana.  This is why advocates ranging from U.S. Senators to the National Conference of State Legislatures have endorsed rescheduling.

On a practical level, such a shift may have allayed the fears of regulators who are reluctant to allow financial institutions to enable pot businesses to access the Federal Reserve Banking system.  The decision leaves the status quo intact.  The next big event in the pot wars will come when the Court of Appeals 10th Circuit rules on an appeal from a state-chartered credit union in Colorado that was denied access to the Federal Reserve System and Share Insurance by the NCUA.

America’s Uneven Housing Recovery

Another issue which I have obsessed about in this blog is the state of America’s housing market and the causes that may lie behind its relatively sluggish rebound during this so-called recovery.  Lest you think these are just the concerns of a curmudgeonly blogger with a glass half-empty perspective, you should read the lead story in today’s Wall Street Journal, which explains that the recovery that began in 2012 has “left behind a broad swath of the middle class, threatening to create a generation of permanent renters and sowing economic anxiety and frustration for millions of Americans.”  This is not an op-ed penned by Bernie Sanders, but a front page article that is worth a read.

Hanging with the kids tomorrow.  See you Monday.

Entry filed under: Economy, General, Legal Watch, Mortgage Lending, New York State. Tags: , .

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4 Comments Add your own

  • 1. Michael Galligan  |  August 11, 2016 at 8:58 am

    The comical part of the housing recovery is I read an article yesterday stating consumer confidence in housing is at an all-time high…Not sure what to believe.

    Thanks,

    Mike

    Reply
    • 2. Henry Meier  |  August 11, 2016 at 9:27 am

      I agree. Its as if the country has divided into two nations-One with strong growth and loaded with opportunity and the other leaving people with no hope and feeling isolated. I think the same duality is evident in our politics.

      Thanks for commenting. Its always nice to know people are out there and paying attention.

      Reply
  • 3. Reefer Madness! | new york's state of mind  |  December 14, 2016 at 9:57 am

    […] smack up against Federal Law which continues to make the possession and distribution of marijuana illegal for all purposes.  Credit unions and banks are dealing with seemingly  contradictory signals from […]

    Reply
  • […] law and regulation makes pot illegal and there is nothing that FinCEN can do to change that. it is not the DEA. Furthermore even if FinCEN could entice banks and credit unions to more actively engage in […]

    Reply

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Authored By:

Henry Meier, Esq., General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association.

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