The Potential Dangers in Financing a Medical Marijuana Business in Los Angeles
A recent news article from Above the Law takes a look at some of the risk associated with funding a medical marijuana business in Los Angeles or other parts of California. As the medical marijuana business grows and continue to grow, there are more and more companies and individual investors who are interested in getting in on their share of the profits which are approaching $1 billion by some estimates.
However, as these investors are looking to get on board, they are discovering some of the pitfalls that can await them due to still existing legal constraints on the medical marijuana industry. This is true even with all of the new regulations and allowances put in place by the Medical Cannabis Regulation Safety Act (MCRSA). There is also much speculation about what challenges these new and prospective investors may face if recreational marijuana is legalized by Proposition 64 this November. It should be noted that many in the industry predict that Proposition 64 will be voted into law this next election as it has widespread support among the people of California.
One of the most commonly asked questions was whether there would be any criminal liability for those who are funding medical marijuana businesses, because clearly nobody wants to go to jail or prison. In terms of criminal consequences, anyone who makes a loan of any amount may be at risk for criminal prosecution and other consequences such as asset forfeiture.
As our Los Angeles medical cannabis attorneys can explain, the presidential administration has said it is against federal agencies specifically enforcing anti-marijuana laws in areas where medical marijuana is legal, but that has not stopped the United States Drug Enforcement Administration (DEA) and the Department of the Treasury from attempting to do so. There has also been a recent case where a federal appeals court in California prohibited them for doing so, but this still has not made it completely safe. For this reason, it is best to speak with an experienced medical marijuana attorney before investing any significant amount of money in the medical cannabis industry.
Additionally, there are many issues with where people can deposit, if they can at all, their proceeds from state legal medical marijuana activities. As it stands now, we have dispensary owners and growers coming in with duffle bags full of paper money that smells like marijuana to pay their taxes since they cannot keep the money in a deposit account in many cases due to federal regulations that prohibit a bank from taking money derived from an illegal activity. The fact that many medical marijuana businesses are forced to keep large amounts of cash on hand, also makes them high risks for being robbed, and for the investors, they may be no insurance that will cover those losses due to federal regulations.
None of this is to say you should not join what is becoming a billion-dollar industry but it does mean you should speak with an experienced attorney to make sure your investment and your liberty interests are being protected.
The Los Angeles CANNABIS LAW Group represents growers, dispensaries, collectives, patients and those facing marijuana charges. Call us at 949-375-4734.
Risky Business: Financing Medical Marijuana In California, October 3, 2016, By Hilary Bricken, Above the Law
More Blog Entries:
Report: California Arrested 500k People in 10 Years for Marijuana, Sept. 5, 2016, Marijuana DUI Defense Lawyer Blog