The Notorious B.I.G. said it best, in his Grammy-nominated Rap track, “Mo Money, Mo Problems.” The hook, or chorus in the popular single, famously lamented, “I don’t know what they want from me. It’s like the more money we come across, the more problems we see.” Ironically, there are likely rural farmers and urban agriculture growers/sellers who might be humming this same tune.
Wisconsin has joined the growing number of states that are considering legalization of marijuana for medical use. In addition, the state passed a bill in 2017 creating a pilot program for the growing and processing of something known as hemp. Although a part of the Cannabis plant family, in which marijuana (weed/pot) is derived, hemp is different in both its use and cultivation. While marijuana is mostly known for its recreational and medicinal purpose, hemp can’t get you “high.” It is used in health treatments, health supplements, skin care, food, clothing and more. In addition, there are cannabinoids (CDB oil) and edible hemp products. CBD, which is not a psychoactive element, is a chemical compound found in the cannabis or marijuana plant.
Medical marijuana is currently legal in 22 states. Recreational marijuana is legal in 10 states and the District of Columbia. And according to a report released by the National Conference of State Legislators, 35 states have passed laws legalizing industrial hemp production for research purposes. Until the 2018 Farm Bill, federal law did not make a difference between hemp, marijuana and any other cannabis plants. They were all made formally illegal in 1970 under the Controlled Substances Act. That designation meant any money made from the sales of the cannabis plant, whether from the local street drug dealer to a farmer was illegal. You can’t put money made from illegal activity into a federally insured bank. In fact, any bank that knowingly handles money from marijuana production or sales, to include hemp, could be charged with money laundering. This was something my office discovered as constituents contacted us to learn more about entering this industry.
In the meantime, there is a lot of money being made in the states that have legalized some forms of marijuana or cannabis. In 2017, Colorado and Washington, the first two states to legalize recreational marijuana, collected a combined $570 million in cannabis-related taxes and fees. The forecast of money to be made by states involved in this industry could top $25 billion by 2025, according to New Frontier Data. Mo Money, Mo Money, Mo Money! The problem is it would be cash money that’s hard to track and hard to tax!
In an effort to address this concern, a bi-partisan group of legislators in Congress, introduced the SAFE Banking Act. The bill would stop banks that worked with legitimate cannabis businesses from being penalized by federal regulators. There are also states introducing similar measures to stop state banking regulators from doing the same thing. Smoke signals on the problems are being sent up, Wisconsin has to pay attention.