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States move fast to protect marijuana industry

marijuana industry

marijuana industry

If a whiff of uneasiness hung over the trade show that drew thousands of marijuana entrepreneurs here last week, it wasn’t because they were just around the corner from a White House that has threatened to shut them down.

They had bigger worries, like sorting out the legitimate business ventures from the hype among row upon row of exhibitors showcasing cannabis growing, smoking, eating and even banking products. The Trump administration’s menacing signals seemed a mere sideshow to those who make their living off the marijuana industry, or aspire to.

After an initial period of post-election anxiety, pot businesses are increasingly confident that states where they are setting up shop have their backs, despite Justice Department warnings meant to rattle marijuana industry enthusiasts.

State leaders are proving themselves nimble at responding to the threat, moving to inoculate local marijuana industries that are fast becoming too important to state economies to leave vulnerable to the whims of Washington.

And they are moving not just in the places where it is politically easy, like California. Even some Republican states are signaling Trump to back off.

“We are seeing states have become very territorial about their rights to do this, regardless of what the Trump administration does,” said John Hudak, a marijuana policy expert at the Brookings Institution. He points to Nevada, where Republican Gov. Brian Sandoval opposed the state’s successful legalization initiative but is nonetheless vowing to move forward with recreational pot there.

“This is someone who easily could have said, ‘No, let’s wait and see what Trump does,’ ” Hudak said. “But he is not doing that.”

Some of the more than 200 marijuana entrepreneurs who walked the halls of the Capitol this month during the industry’s annual lobby day — an event that has grown exponentially in size — were surprised by how many Republican congressional offices were eager to engage.

“People here are treating this more seriously,” said Morgan Paxhia, a San Francisco marijuana investor who was among those lobbying.

Trump’s intentions on pot are unclear. The White House has warned that recreational pot businesses could be subject to federal enforcement actions. Trump tacked a signing message onto the budget he recently signed that indicates he may not honor its prohibition on busting medical pot businesses operating legally under state laws. Atty. Gen. Jeff Sessions is an old-school drug warrior eager to restore some of the zero tolerance tactics that haven’t been part of the federal playbook for years.

But states say they can’t afford to wait to see how federal policy plays out.

“You have to have blinders on to not understand how large this industry can become,” said California State Treasurer John Chiang. He has been taking a lead in California’s efforts to move the industry into legitimacy, holding lengthy hearings aimed at helping banks step around the federal rules that make them reluctant to work with pot firms.

The easier it is for companies to get out of the shadows and operate like other normal businesses, Chiang says, the quicker they can start paying taxes to the state — and the harder it will be for the Justice Department to undermine the marijuana industry.

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