Marijuana history was made again this week, but you’d be wise to keep the champagne on ice.
For the past three years, marijuana has taken Wall Street by storm. Even with cannabis stocks in a six-month funk, the biggest names in the industry are many multiples higher than they were three years ago on the expectation that legal weed sales will grow somewhere between five and 18 times the $10.9 billion in worldwide sales recorded in 2018 by the end of the next decade.
Being a Schedule I drug comes with its fair share of problems
The one major uncertainty in these growth projections continues to be the United States. Despite being the most lucrative cannabis market in the world, the U.S. federal government has remained firm on its classification of marijuana as a Schedule I substance. This classification means marijuana is on par with heroin and LSD as being entirely illegal, prone to abuse, and isn’t recognized as having any medical benefits.
In spite of being labeled a Schedule I drug, it hasn’t stopped 33 states from legalizing medical marijuana since 1996, 11 states of which have also legalized adult-use consumption. These 33 states are currently running circles around Canada, the only fully legal industrialized country in the world, in terms of sales, thanks in part of the federal government taking a hands-off approach to regulation.
Nevertheless, there are clearly defined consequences to Congress holding pat on cannabis as a Schedule I substance.
As an example, profitable businesses that operate in the U.S. marijuana space are subjected to Section 280E of the tax code, which was implemented in the early 1980s to keep drug smugglers from writing off “business expenses” on their taxes. In layman’s terms, marijuana companies aren’t able to take any deductions on their federal income taxes, save for cost of goods sold. If profitable, this can mean paying an effective tax rate of 70% to 90%, which leaves little income left over for reinvestment and hiring.
U.S. pot companies also have minimal access to basic banking services, including loans, lines of credit, and even checking accounts. Since financial institutions report to the Federal Deposit Insurance Corporation (FDIC), and the FDIC is a federally created agency, banks and credit unions fear possible financial and/or criminal repercussions for aiding cannabis companies. This has made marijuana an industry dominated by cash, which is both a security concern and an expansionary constraint.
However, certain members of Congress believe they have a solution to this latter problem.
The SAFE Banking Act passes in a landslide
The Secure and Fair Enforcement (SAFE) Banking Act was introduced earlier this year in the House of Representative as a means of permanently protecting financial institutions in legalized states that want to offer basic banking services to marijuana businesses.
Since 2014, protections have existed for cannabis businesses in legalized states via riders that have needed to be passed with each successive fiscal year. However, the SAFE Banking Act represents the first piece of stand-alone cannabis legislation to be voted on in Congress. Were it to become law, Congress would no longer need to pass annual riders, since the Act itself would protect banks and credit unions from being targeted by the federal government for providing services to the marijuana industry.
On Wednesday, Sept. 25, the House officially voted on the SAFE Banking Act under a procedure known as “suspension of the rules.” This procedure is typically reserved for noncontroversial legislation in instances where lawmakers want to quickly pass a bill. Of course, a simple majority doesn’t work with suspension of the rules. Instead, a two-thirds majority (290, or more, out of 435 votes) is needed for passage.
When the gavel struck, members of the House voted overwhelmingly to pass the SAFE Banking Act: 321 in favor, to 103 opposed. A majority vote was certainly expected with the bill having 206 cosponsors heading into its historic vote. However, 321 yay votes are above and beyond expectations and demonstrate that cannabis banking reform has become a bipartisan issue.
The big question is: Now what?
What’s next for the SAFE Banking Act?
Now that the SAFE Banking Act has passed the lower house of Congress, it’ll move on to the Republican-controlled Senate. The problem is, the GOP has historically had a more negative view on marijuana than members of the Democratic or Independent party, making it less likely that banking reform legislation will have the votes needed for passage in the Senate.
Additionally, it’s been suggested that while Senate Republicans are open to discussion and a vote on banking reform measures, those measures may not mirror the exact bill just passed by the House. In order to persuade Senate Republicans to take up the issue and vote in favor of reform, certain concessions may need to be made, such as including protections for hemp and cannabidiol (CBD) companies, as well as possible stipulations that federal agencies won’t be able to target certain industries without valid cause, such as the firearms industry.
Even Senate Democrats may push back on the SAFE Banking Act. Similar to the minority opposition in the House, some Senate Democrats believe that it’s not prudent to consider reforming cannabis banking laws before broader marijuana reforms are tackled at the federal level.
And, of course, there’s always Senate Majority Leader Mitch McConnell. While it’s always possible that McConnell will allow some version of the SAFE Banking Act to make it to the Senate floor for vote as a means of courting 2020 election votes, it’s more likely that McConnell will aim to block the bill for vote, which is what he’s done with other forms of cannabis legislation.
According to Senate Banking Committee Chairman Mike Crapo (R-Idaho), the chamber will vote on cannabis financial services legislation before the end of the year. Unfortunately, this doesn’t narrow things down too much in regard to when or if we can expect the Senate to vote on a complete bill. While industry enthusiasts and investors remain cautiously optimistic, signs continue to point to no resolution on banking reform anytime soon.
Something big just happened
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The House of Representatives made history on Wednesday, passing landmark legislation that would protect U.S. banks that provide services to legitimate cannabis businesses in states where cannabis is legal.
“Prohibition is over,” said Rep. Ed Perlmutter (D-Colo.), who introduced the bill. “Our bill is focused solely on taking cash off the streets and making our communities safer.”
The Secure and Fair Enforcement (SAFE) Banking Act passed 321 to 103 with substantial support on both sides of the aisle. Walking into the vote on Wednesday, the bill tallied about 200 sponsors ー 26 of whom were Republican.
A Congressional aid familiar with the SAFE Banking Act said that drumming up bipartisan support was partially the point ー that padding the bill with a broad base of support will increase its odds when it heads to the Republican-controlled Senate, where it faces a much heavier lift.
With support from about 30 percent of the Senate ー including only five Republican Senators ー some suggest it won’t have enough traction to pass. But comments earlier this month from Senate Banking Chair Mike Crapo reignited proponents’ hopes. He told Politico that he hopes to address cannabis banking issues by the end of the year.
“We’re working to try to get a bill ready,” he told Politico. “I’m looking to see whether we can thread the needle.”
Following passage of the bill in the House, Sen. Cory Gardner (R-Colo.), one of the bill’s lead sponsors in the Senate, urged his fellow Senators to deliver SAFE Banking to President Trump’s desk. And Sen. Jeff Merkley (D-Ore.), who introduced the Senate version of the bill, was hopeful of its momentum.
“While we continue to work to address broader issues related to the harmful legacy of cannabis prohibition across the country, I am hopeful that we can get the SAFE Banking Act moving quickly through committee, to the Senate floor, and ultimately, to the President’s desk,” Merkley said in a statement.
Meanwhile in the House of Representatives, proponents celebrated. Cheers could be heard throughout the chamber the moment votes in favor surpassed 290, or two thirds of the chamber ー the margin needed to pass a bill under suspension of the rules. Perlmutter was especially excited. He’s been working to push versions of the legislation through with sponsor Rep. Denny Heck (D- Wash.) since 2013.
“After six years of working on this bill, the SAFE Banking Act will go a long way in getting cash off our streets and providing certainty so financial institutions can work with cannabis businesses and employees,” Perlmutter said in a statement.
But even as they celebrated, proponents of wider legalization acknowledged the need for further reform ー especially for social justice. In the weeks leading up to the House vote on the bill, criticism emerged from within the Democratic party, as well as from advocacy groups, which argued such a bill undermines more comprehensive and socially focused reform. Three Democratic Presidential candidates ー and Senate Minority Leader Chuck Schumer ー have criticized the bill for not doing enough to repair damages from the War Drugs.
But proponents of the bill argued social justice and incremental financial reform don’t have to be mutually exclusive. In the hours leading up to the vote, House Majority Leader Steny Hoyer released a statement affirming the concerns of advocates and his colleagues, and calling for more action on cannabis equity following passage of the bill by the House.
“I am proud to bring this legislation to the Floor, but I believe it does not go far enough. This must be a first step toward the decriminalization and de-scheduling of marijuana, which has led to the prosecution and incarceration of far too many of our fellow Americans for possession,” Hoyer said in a statement.
Rep. Maxine Waters (D-Calif.), chair of the House Committee on Financial Services, which passed the bill in March after days of amendments and deliberation, said much of the same.
“This bill is but one important piece of what should be a comprehensive series of cannabis reform bills,” she said.
Many of SAFE Banking’s more prominent cosponsors, including Rep. Matt Gaetz (R-Fla.), Rep. Early Blumenauer (D-Ore.), Rep. Perlmutter, and Rep. Waters, also support more comprehensive and socially focused cannabis legislation like the Marijuana Opportunity Reinvestment and Expungement (MORE) Act, introduced by Rep. Jerrold Nadler (D-N.Y.) in July.
Paragon Processing, the nation’s largest hemp processing facility, is looking to start full-scale operation in the Colorado City area within the next 20-30 days.
“We’re actively hiring people so that we can ramp up,” said William Chavis, partner of Paragon Processing, located about 23 miles south of Pueblo. “It wouldn’t make sense to ramp up with our current staff, so it takes time to get people in the building, train them, have a good understanding of what’s going on.”
Paragon Processing currently employs between 30 and 45 staff members. It is looking to expand to 250 workers by the end of the year and 500 in approximately two years. Available positions include maintenance people, general laborers and skilled tradesmen, according to Chavis.
“We have found very strong people out of the oil and mining industries that have experience using these types of equipment, but not necessarily for this purpose,” Chavis said. “We invite as many local people as we can to come in and help out with some of the general labor.”
The Paragon Process extraction facility is 256,000 square feet. At the facility, hemp biomass is tested for pesticides, heavy metals, and microbials. Biomass that passes each test is stored and processed. Currently, the facility is capable of processing 1 million pounds of biomass each month. Climate controlled storage is available for 50 million pounds.
“In the event that a farmer has 2-3 million pounds, we’re able to take that all in at one point in time, even if we can’t process for them in a single month,” Chavis said.
Through extraction, a winterized crude is produced from the biomass.
“That crude material consists of some of the other plant extracts other that the actual cannabinoids,” Chavis said. “That crude is around 50% cannabinoids, a mixture of everything from CBD, CBM, CBG, CBC as well as minute amounts of THC.”
Product must contain less than 0.3% THC content in order to be transported out of the facility.
“Just on the science side alone, if you were able to take a product that started with 0.3% and you concentrate it, it’s likely going to have over 0.3%,” Chavis said. “To further refine it, we use distillation.”
After distillation, THC content can also be removed through THC remediation or through production of a CBD isolate, a 99% or pure CBD product that contains no THC.
“Hemp is currently one of the largest cash crops that people are switching to,” Chavis said. “There is actually 15 times more volume of hemp being grown and produced this year than previous years.”
Paragon Processing currently has a sister facility located in Colorado Springs handling goods manufacturing. CBD distillate and isolate produced at the extraction facility may be used for food products, lotions and other consumer goods.
“We’re very interested in taking applications of all sorts,” Chavis said. “We invite people to go to our website to take a look and fill out the application.”
In an emotional 1-on-1 interview, one of America’s most respected icons revealed that he wouldn’t be where he is without CBD.
We all know and love Willie Nelson as the charismatic country star who has never been shy about advocating for marijuana use. He has always been focused on creating music, going on tour, and promoting America. However, he shocked everyone when he announced his new CBD line, Complete Strength CBD, would be the next step in his career.
In recent developments, Willie revealed that he would be stepping away from the spotlight to put more time into his wellness business, now that it has grown so fast:
“This was a really, really difficult decision for me. When I started this whole thing back in 2015, it really was just a part time passion project and a way for me to give back. Now here we are almost 5 years later and Complete Strength CBD has steadily grown into a full-fledged business that’s helped thousands of people become pain free and much happier. My line gives me a chance to do something bigger than music and I knew I would regret it for the rest of my life if I let that opportunity pass me by.”
Willie went on to say that he never really expected things to get this big and that several studios and sponsors were furious that he was splitting up his time. In fact, relations with some studios grew so tense that they ended up giving him an ultimatum – singing or his wellness line.
He knew he would receive scrutiny from fans and sponsors for quitting, but he felt it was time to work on something that would positively change the lives of millions of people.
The product Willie is referring to is his breakthrough CBD wellness line Complete Strength CBD. The star has spent the past four years developing a line of highly effective and highly potent wellness products that he claims are the solution for those who don’t want to resort to using opiates.
His product Complete Strength CBD sold out within ten minutes when first launched and it seems the world can’t get enough of the benefits and results.
Willie even admitted that big pharma companies are furious with him after noticing a large decline in sales since Complete Strength CBD was launched on the market.
“Users of Complete Strength CBD are experiencing results that before now were only possible through prescription medication. It’s obviously a much cheaper, and safer alternative and because of that pharmaceutical companies are finding it harder to keep patients using their prescriptions.”
Having a crowd of angry pharmaceutical companies is a unique and effective endorsement for Complete Strength CBD, but Willie has still been proactive in getting Complete Strength CBD into the hands of those who need it.
Complete Strength CBD has been found to have a positive impact on key body functions including – neurological, physical, and psychological.
This includes but not limited to:
Reduces Chronic Pain
Supports Joint Health
Reduces Anxiety
Reduces Headaches
Reduces Blood Sugar
Supports Cognitive Health
Antioxidant Support
While making an appearance on ‘Fox’ he gifted the cast and crew with Complete Strength CBD products and made sure every guest was given a sample of the life changing supplement. Since then, he has cultivated a huge celebrity clientele who are regularly reordering the products. See for yourself!
Hemp, Inc. (OTC PINK: HEMP) announced today the Company was featured in “Plastics News” regarding the Company entering the hemp bioplastics industry. The Plastics News article titled “Hemp, Inc. taking hemp into bioplastics” details the operations at Hemp Inc.’s facility in Spring Hope, N.C., where the Company has begun processing industrial hemp for bioplastics. Within the article, the outlet describes the operations that will help fill the growing demand for hemp-based and natural materials.
According to the news source, the material that is being processed at the facility has completed positive beta testing. A quote from the original press release that is included in the article states, “This is a venture no one else is doing in America and what hemp was put on this earth to do,” said Hemp, Inc. CEO Bruce Perlowin. “While everyone focuses on CBD, we are here focusing on the next big thing, which is the industrial part of the plant – the part that can help save the world.”
In addition to the announcement regarding Hemp, Inc.’s entry into the hemp bioplastics industry, Plastics News also highlighted that the Company has two additional natural product ventures. These two product ventures include DrillWall™ and Spill-Be-Gone™ for the oil industry, making hemp bioplastics the Company’s third natural product venture. The outlet also included Hemp, Inc.’s promotional video entitled “Could Hemp Save the Planet?”
The hemp industry is expected to jump from $1.1 billion in revenue in the year 2018 to an estimated $2.6 billion by the year 2022, according to New Frontier Data. Additionally, bioplastics are predicted to control five percent of the plastics market by 2020 and rise to 40 percent by 2030, according to Grand View Research.
Read the Plastics News article “Hemp, Inc. taking hemp into bioplastics”. Hemp, Inc. is a global leader in the industrial hemp industry with bi-coastal processing centers. WHAT IS HEMP, INC.? What is Hemp, Inc.? With a deep-rooted social and environmental mission at its core, Hemp, Inc. seeks to build a business constituency for the American small farmer, the American veteran, and other groups experiencing the ever-increasing disparity between tapering income and soaring expenses. As a leader in the industrial hemp industry with ownership of the largest commercial multi-purpose industrial hemp processing facility in North America, Hemp, Inc. believes there can be tangible benefits reaped from adhering to a corporate social responsibility plan
