Challenges Plague the Budding Pot Industry Despite State Legality and Historical Popularity

Posted on: April 8th, 2013  |  No Comments

According to the Pew Research Center, a majority of Americans now say marijuana should be legal, 52 versus 45 percent. The overall shift in support is driven by wide acceptance among younger Americans as well as changing views among their elders. Nearly two-thirds (65 percent) of people between the ages of 18 and 32 say that Marijuana should be legal. At the same time, baby boomers and Generation Xers have become far more supportive than in the early 1990s. Via Scott Clement of the Washington Post

Yet the pot industry in Colorado is struggling with the unique challenges of conducting a business that the federal government considers a crime. The federal government has cautioned many banks against handling marijuana finances, causing state’s pot producers difficulty securing business financing because banks won’t give them loans- most of the time, not even an account. Business owners remain anxious about the intentions of the federal government, which could seize millions of dollars they have invested or even send them to prison.

Furthermore distributing marijuana is not a legitimate business expense under the tax code, so pot distribution companies cannot deduct most of their expenses, which can result in the company losing money after paying income tax. Pot retailers also cannot use many of the traditional means for promoting consumer goods, such as advertising. And state lawmakers are about to regulate everything from the shape of containers to the labeling required for pot laced brownies and other “infused products”. Via T.W. Farnam of the Washington Post

A version of Clement’s article appeared in print on Friday April 5, 2013, on page A3 of The Washington Post with the headline: Marijuana legalization support hits milestone

A version of Farnam’s article appeared in print on Thursday March 26, 2013, on pages A1, A6 of The Washington Post with the headline: In Colo., a growing industry is a federal crime

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