If you have been watching the marijuana stocks, it is easy to see that they have been skyrocketing. More people are investing their money in companies growing both medical and recreational marijuana. It is not just the growers, but also those companies involved in processing marijuana into a final product. This is due to the studies released recently. Such studies show that the marijuana industry is expected to grow by 45% in 2018. Such a massive growth means more money from the business. Anyone can see the potential of investing in the business right now.
Even with such lucrative business showing promise for the future, there are a few hurdles it has to deal with. One of them is the federal government. As much as many states have legalized the use of medical and sometimes recreational marijuana, it remains illegal at the federal government level. The worst part is that pot is classified at the same level as LSD and heroin. This is according to the Schedule 1 Substance by the federal laws. Even with many studies showing the medical benefits of using marijuana, the federal government still does not see it.
The scheduling of marijuana has made it hard for many marijuana businesses to keep delivering the product to the clients. Some of the problems include accessing banking services. The banks are not allowed to offer most of the banking services to businesses dealing in pot. This is because they operate under the federal law. The consequences for a bank can be severe as it would be seen as money laundering. You can see why some banks would not offer you a loan to a pot business.
Another major problem that pot businesses face is when it comes to tax time. They are subjected to the U.S. tax code 280E. In this context, the business that deals in products illegal at the federal government level, they have to pay tax on the gross profit rather than the net profit. With the conditions sometimes being unbearable, it can be hard to make enough profit in some areas with such laws.
Things seemed to be looking good when the federal government at some point was seen to be easing on the marijuana laws. This was during the Obama Administration in 2016 when it announced that some of the red tapes around marijuana laws would be examined and possibly changed. This meant that having experts to research more on the medical marijuana and giving their recommendation. What most people do not know is that the University of Mississippi had been allowed to grow marijuana for research for many now. The announcement also opened the chance to have more universities involved in the marijuana study. For sure this looked a win for many pot growers.
Well, that is what people though until the Trump Administration came in. The current Attorney General Jeff Sessions has been on the forefront to derail any requests for the expansion of medical marijuana research in the country. Since he is also the head of the DEA, you could see how he could always frustrate the efforts of most marijuana businesses. The worst is that there are 25 proposals with the federal government on the growth of cannabis needed for research. But it seems the Justice Department is looking to maintain Mississippi as the monopoly when it comes to growing medical marijuana for research.
To make it even harder for research to happen, the DEA is requesting that these researchers grow 443,680 grams for the year 2018. This is a decline in the amount of pot they grew before. As you can see, despite the federal government giving assurance of easing the conditions for the marijuana business, things are not as we expected. They have broken their promise.
Sometimes you do not have to actually see the federal government saying it does not support medical marijuana. Simply from Sessions speeches and actions, it is easy to know the federal government position on using medical marijuana. This is the case even with the handful researches shared by many drug developers on how medical marijuana can be beneficial to the users.
One of the top drug developers GW Pharmaceuticals has reported some important data showing how its drug Epidiolex works for many patients. This drug was used to treat patients with rare type epilepsy. This saves the children from having epilepsy all their life. This is not the only report in existence as many of the developers share such reports on request but it seems the federal government does not want anything to do with them.
As long as there is a red tape of marijuana, the full potential of the product will never the be released. The federal government does not have to fear anything but rather allow for further research for them to understand marijuana fully.