Cannabis Attorney Chris Glew on the Challenges for Dispensaries

OC WEEKLY: More than half of the 50 states, as well as the District of Columbia and Puerto Rico, have legalized cannabis use to some degree. Are retailers still experiencing the same issues with banking?

CHRISTOPHER GLEW: Cannabis retailers still struggle to find stable, legitimate banking solutions in today’s environment. Banking institutions are struggling right along with the business owners as they watch millions of dollars walk away. There are many examples of folks such as the Fourth Corner in Colorado attempting to service the financial needs of the cannabis industry and ancillary businesses. They have all been stymied by the Federal Reserve denying them access to a master account. There is a lot of momentum in several states, including California, to develop state banks specifically for the industry. This would serve a dual function of allowing the state greater transparency for regulatory purposes and, of course, revenue generation. On the federal level, House Resolution 1595, “The Secure And Fair Enforcement Banking Act of 2019 (Safe Banking Act),” is grinding its way through the arduous journey to completion. This would stop the Fed from targeting financial institutions for choosing to take on cannabis clientele. This bill has cleared the House, and now the last hurdle is Senator Mike Crapo (R-Idaho), the chairman of the Senate Banking Committee. Crapo is the linchpin now as he determines whether or not the act will get its first hearing in the Senate.

Do any banks in California offer a solution?

Right now, I am aware of only a few, and they allow limited access. I am aware of the Santa Cruz Community Credit Union, and the [United Food and Commercial Workers] has a credit union accessible to a limited number of member shops. I know they charge a fee to the shops to help offset the additional internal auditing requirements necessary for the bank to remain compliant. Otherwise, it is all safety deposit boxes and armored guards.

Your banking comments remind me that this Rolling Paper edition is dedicated to those in the cannabis industry giving back to their communities, through services they provide to charitable causes they champion. Do the challenges they face with banking extend to being charitable?

Due to the fact they have problems finding banking solutions, that can make it more difficult to find charitable partners. Many in the cannabis sector have an altruistic spirit, something you can see on an industry-wide scale with SACA [Santa Ana Cannabis Association]. And we have had a lot of difficulty finding dance partners to make charitable contributions with. When we applied to cities for entitlements, a requirement was for merit-based applications, which we fine-tuned to show what kind of community benefit the organizations would provide, such as offering assistance to veterans, veteran hiring, 100 percent local hiring, higher minimum wages. We invited the unions into the shops. All these things are seen as socially uplighting, such as hosting job fairs—you name it.

What has been the biggest hurdle when it comes to being charitable?

For instance, there’s the Boys & Girls Club at the Delhi Center, which has the Santa Ana Unified School District as a backup. It’s not that we get the cold shoulder, but there is usually a long conversation. It starts with them being really appreciative of what we want to do for it, but being concerned with the image, the optics. I get it. I understand most school districts are not sponsored by Budweiser. I have not seen a Santa Ana high school wrapped in a Budweiser banner. That being said, it’s become very interesting to me that no one has been able to bridge the gap between the two. Hey, look, if there are dance partners out there that have legitimate charitable organizations with a youth purpose, isn’t there a way we can find to serve both interests?

So how do you start the ball rolling to gain the necessary acceptance?

The best thing we can do as the cannabis community is, instead of getting a bunch of press for helping charities, why not start a cannabis-education program like anti-drunk driving programs? We could advocate a don’t-drive-high program for kids. We could actually have them come in and educate them on the dark side. . . . Cannabis has some positive effects, ultimately; there is enough research that we’ve developed a narrative that cannabis isn’t all bad. But we must recognize a dark side to it as well. Why not, as an industry, wrap our arms around that and say you shouldn’t drive high? We should educate the youth that you should not use cannabis irresponsibly. Whether you are not using it, you are going to in the future or you are using but you are not supposed to, here are the ramifications. We’ve had the DARE program and the MADD program; the [cannabis] industry should be tasked with educational programs like these as well.

Starting with something like that and building ties could lead to the cannabis community branching out to other charity causes.

This is the intersection we are at. We don’t necessarily need to be in youth facilities, but that being said, it wouldn’t hurt to push for responsible cannabis use because that is also better for our industry. It could erase the negative press and bad headlines. Operating a motor vehicle [while high on cannabis] is not good for us as a society and a business. We don’t need those headlines. I hate to draw parallels with the alcohol industry—we are two totally separate things—but there has been some messaging like that. For instance, Anheuser Busch and their drunken-driving campaigns. We will not be building parks and calling it Pot Park—I get that.

So the kind of charitable programs you are thinking of would extend beyond minors, correct?

Yes, we should be saying we prefer responsible adult usage. Ultimately, we should be thinking of what can be done with abuse, and what more can we do? We could support drug counseling; that could be the next evolution of outreach to the communities. The cannabis industry could become a leader in connecting people to the right kinds of resources. We could become the philanthropic leader in paying for free treatment facilities. An added value of cannabis is it can be a pathway to weaning people off heavier narcotics. It may not be the right thing for everyone, but certainly that idea is based on popular data that’s out there and consumable for the masses. And more studies are being done to find more data points for a role for cannabis in medicine.

Is there any hope that in the future, it will get easier for the cannabis industry to connect with community charities?

As time goes on, people tend to understand overall. Abusing alcohol and smoking tobacco are still considered vices, and the average person kind of understands that cannabis does not quite rise to the same level. Violence has been attributed to alcohol consumption. The side effects are horrible. It is certainly consciousness-altering. Not a lot of people sit back and consume alcohol and say it is helping to sharpen their focus. Instead, it can lead to anxiety and depression, just like becoming dependent on opiates. Many in the cannabis industry take a holistic approach to the mind, body and spirit. Yoga is a big part of this community, as are jiu jitsu and other athletics. Enough people entered the cannabis space for the right reason. Many are truly well-grounded, spiritual people who believe the world should be a better place and want to know what they can do to effect positive change. The cannabis sector has, per capita, a higher ratio of people concerned about the environment than a cross-section of the population. There is a positive message to responsible cannabis use. As time goes on, in the next decade, that will be more firmly planted in the average American’s mind.

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