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H.R. 7: the First Step to End Access to Abortion

Days after worldwide Women’s Marches, the House of Representatives voted to pass bill H.R. 7. The Bill, also known as the “No Taxpayer Funding for Abortion and Abortion Insurance Full Disclosure Act,” is meant to curb abortion rights by banning the use of federal funding for abortion services except in extreme cases. The bill is an extension of the controversial Hyde Amendment.

H.R. 7 Abortion The Hyde Amendment

Passed by the House of Representatives in 1976, the Hyde Amendment is a legislative provision that blocks federal Medicaid funding for abortion services. Three very narrow exceptions exist: if the pregnancy is a result from rape, incest, or if continuing the pregnancy will endanger the woman’s life. Medicaid is a federally funded health care program for families or people with limited resources. It provides free or low-cost health care to low income people.

The Hyde Amendment has had the biggest effect on those who rely on Medicaid for health services, namely low-income women, women of color, young people and immigrants. Unless the pregnancy threatens the life of the woman or the pregnancy is a result of rape or incest, insurance does not cover abortions for those women on Medicaid. As a result, those women and families who are already low-income have to carry their babies to term and pay for the insurance costs out-of-pocket. Recent reports indicate the uninsured cost of having a baby is anywhere from $30,000 for an uncomplicated vaginal birth to $50,000 for a C-section.

How H.R. 7 Expands the Hyde Amendment

The Senate still needs to vote to pass H.R. 7 for it to become law, but if it passes, the Hyde Amendment extends to those people who receive their medical insurance plans by participating in the Affordable Care Act. Organizations like Planned Parenthood will no longer receive federal funding, even if the money is used for other health care services. The bill further makes the Hyde Amendment permanent. For the last 40 years since it was first proposed in 1976, the amendment has been subject to annual renewal. The Bill eliminates the need to approve the amendment year after year. The bill also provides incentives for private insurance companies to drop their abortion coverage.

Arguments For and Against the Bill

Proponents of the bill argue that taxpayers’ money shouldn’t be used for abortions, especially if the individual taxpayer is pro-life. In this way, they contend that there should be a boundary between public and private dollars for such a controversial procedure. Opponents claim the Amendment and H.R. 7 places an undue burden on women who rely on Medicaid and government assistance for health care.

What Does This Mean for Women?

If passed by the Senate, H.R. 7 will not have a sweeping impact on all women. It will, however, impact women on Medicaid and who have health insurance through the Affordable Care Act. Women of color will be most impacted as they disproportionately comprise the majority of Medicaid enrollees. Recent statistics show that 30% of Black women and 24% of Hispanic women are enrolled in Medicaid. Comparatively, only 14% of white women are enrolled in Medicaid.

There are currently 25 states that already prohibit insurance providers from covering abortions. If H.R. 7 becomes law, it will pull federal funding for abortions in the remaining 25 states.

From a practical standpoint, the bill may force women who simply can’t afford to have an abortion to carry their pregnancy to term. These women could be consumed by unsurmountable debt from their medical care during pregnancy and the birth of their child. They likely will have to seek federal assistance (welfare) to support themselves and their child.

Women who are desperate to avoid paying prohibitively expensive insurance costs may seek more dangerous methods to abort their child.  Such practices could threaten the life of the mother as well as the unborn child.

Trump’s Global Gag Order and Reproductive Rights

The last week has been characterized by surprising executive orders coming out of the freshly minted President Trump’s Oval Office left and right.  One of these orders is, perhaps, a little less surprising than the others–the global gag rule.

Trump’s spin on the global gag rule came, ironically, the day after the anniversary of Roe v. Wade–arguably the most influential case ensuring reproductive rights in the 20th century.  It also was only two days after the women’s march–with 673 different marches taking place in support of women’s rights around the globe.

The order enacts a policy which forbids providing U.S. aid money to any foreign organization which offers any abortion-related services–from actual abortions to things as small as providing pamphlets about abortion, information of any sort about getting an abortion, or medical referrals to locations that can provide safe abortions.  The order even applies in countries where abortions are completely legal.  So why isn’t such a huge order–chilling reproductive rights across the globe–a surprise?  Because, at its core, it’s nothing new.

The original global gag rule–also known as the Mexico City Policy–was put into force by Ronald Reagan in 1984.  Since the policy first came to be, every passing of the guard has seen the policy removed or reenacted.  President Clinton got rid of the policy nearly immediately on taking office, President Bush brought it back just as quick during his tenure, and President Obama nixed it within days of taking office.

With this in mind, the global gag rule wasn’t unexpected–what was unexpected was the additions President Trump included which further curtail reproductive rights around the globe.

So What Has Changed?

Trump’s global gag policy made some changes which, while subtle at a glance, actually represent fairly sweeping expansions on previous versions of the rule.  For instance, versions under Reagan and Bush both included exception for services provided by the government–Trump’s order has no such exception.  In fact, the changes are even more far reaching than that.  Previous versions applied only to family planning programs around the world–Trump’s gag policy applies to all health funding full stop.   Trumps version of the order also closes exemptions for hospitals and clinics which don’t offer abortion and situations where health providers treat women suffering complications after they seek an illegal or unsafe abortion–as they might be forced to do where abortion is made unavailable.

When George W.  Bush enacted his version of the policy, he included a carve out for the President’s Emergency Plan for AIDS Relief (PEPFAR).  This was because the rule would make the goals of PEPFAR–helping to treat AIDS in developing countries–impossible to achieve if the global gag rule had been applied to them.  Trumps rule, once again, has no such exception.

You’re probably wondering what kind of an impact these changes have on the assistance the U.S. offers to foreign countries.  The policy, as originally written, stopped a whopping $600M a year in foreign aid from helping those in need of reproductive care.  Trump’s expansions increase that number substantially, blocking potentially as much as $9.5B in funding.

What Will it Do?

The amount of money that could be taken away from people trying to provide women with safe health services is astronomical.  However, it is important to understand exactly what the global gag rule achieves in order to understand its full effect.  In order to that, it’s important to understand what it doesn’t achieve.

Trump Global Gag Order

Shortly after Roe v. Wade served to help delineate the situations in which a state could not impinge on a woman’s privacy and reproductive rights, Congress lashed out against abortion in one of the only legal ways it could.  In 1973, they passed the Helms Amendment to the Foreign Assistance Act–colloquially known as just the Helms Amendment.  This amendment actively serves to bar and U.S. tax dollars from funding “abortion as a method of family planning or to motivate or coerce any person to practice abortions.”  Thus, the Global Gag Policy isn’t in place to prevent money from going to abortions–the Helms Amendment has already seen to this.

Instead, the global gag rule seeks to go far beyond the Helms Amendment–punishing health service providers for even providing information on abortion as a family planning option.  What’s more, while federal law implies that the Helms Amendment has exceptions for situations such as rape, incest, or a pregnancy which threatens a woman’s life, the new version of the global gag rule has no such exclusions.  It does not even provide an exception for HIV/AIDS funding.

The gag rule also goes further than the Helms Amendment in another way.  While the Helms Amendment prevents U.S. dollars from funding abortions, the global gag rule works to limit how an organization applies its own funds.  Under the order, if an organization uses its own funds to even provide literature discussing abortion as a family planning option it is unable to receive funding from the U.S. government.

So what will the gag rule truly accomplish?  It will reduce funding to contraception and AIDS prevention services around the globe.  It will cut funding to organizations focusing of water and sanitation, child survival and education–killing children in developing countries.

The global gag rule has not served to reduce abortions abroad for an obvious reason.  The health service organizations it tends to target are also some of the primary providers of contraception and birth control.  Lo and behold, removing funding from the people who provide cheap access to contraception leads to more women seeking an abortion–some studies showed the number of abortions sought around the world increasing nearly 3 times over during periods where the gag rule is in effect.  History and the numbers under the past global gag policies have also shown that putting abortion out of reach does not stop women from seeking abortions–it forces women in developing countries to seek unsafe abortions.  In fact, the World Health Organization puts the number of unsafe abortions in developing countries alone at about 21M per year.  The deaths resulting from these unsafe procedures accounts for 1 in 6 maternal deaths.

Is it Legal?

For quite some time, despite its substantial potential for harm, the legality of the global gag rule has been supported by a 1991 Supreme Court case known as Rust v. Sullivan.  This case dealt with the ability of the government to place abortion-related conditions on organizations receiving federal funds.  The issue was framed as a potential First Amendment violation as the restriction in question in the case refused funds to organizations with doctors who informed patients about abortion as a medical option.  The Supreme Court upheld the restrictions, ruling that while Congress could not stop doctors from advocating for abortion through other separately funded programs, they can stop them from doing so using money provided by the government.  This has been interpreted to mean that the global gag rule in constitutional.

However, in 2013, another Supreme Court case may have changed the boundaries of Rust in such a way to bring legality of the global gag order into question.  The case dealt with a law which barred organizations from receiving government funding where the group advocated for legalizing sex work.  This included situations where the groups used their own money to support their advocacy.  The Supreme Court ruled that restricting activities “on [an organizations] own time and dime” was an unconstitutional condition on funding and violated First Amendment rights.

Executive orders, such as the gag rule, must be constitutional.  While the gag rule certainly does restrict the way organizations–both abroad and organizations within the U.S. with operations abroad–may use their own funds, it is still unclear whether these more recent changes would render the gag rule unconstitutional.  The global gag order has not been in place since the Supreme Court expanded on its position on Rust so no organization has had a chance to challenge it.  It’s likely that an organization whose funding has been jeopardized will bring a lawsuit arguing just this distinction in the coming days.

This is Our Reality

Until this legal uncertainty can be resolved, women at home and abroad will suffer for it.  Protecting a woman’s reproductive rights is crucial, providing women the right to autonomy over their own bodies is not a woman’s issue it is a human one.  The global gag order not only simply doesn’t achieve its goal, it takes reproductive choices out of the hands of women and forces them to look elsewhere–often at the risk of their own health.

EEOC Fights Mental Health Discrimination

Disabilities come in many shapes and forms, from obvious to the eye to harder to pin down.  Few types of disabilities are less widely understood than mental disorders.  These disabilities encompass a huge variety of illnesses and disorders; mood disorders, schizophrenia, anxiety disorders, panic disorders, OCD, PTSD, autism, and many more.  Greater than one in four Americans older than 18, approximately 26.2%, suffer from some sort mental illness–around 57.7 million people.  In fact, mental disabilities are the cause of disability in the U.S. for people between the ages of 15 and 44.

EEOC Mental HealthGiven how widespread and varied mental disabilities are, it is no surprise that employment discrimination based on such disabilities is an incredibly hot button issue.  Just last month, the Equal Employment Opportunity Commission (EEOC) released a comprehensive publication on the rise of discrimination based on mental health throughout the nation.  This has created heightened focus on an employer’s role in preventing such discrimination throughout the nation.  This heightened focus has been accompanied by a rise in the number of lawsuits alleging employment discrimination based discrimination.  The EEOC said in their publication last month that they alone had handled over 5,000 claims and received around $20M in settlements for mental health discrimination cases in 2016 alone.

With this in mind, it’s never been more important to understand how to approach mental health discrimination as an employer or the understand your rights if you suffer from a mental disability.  So how should a mental disability be handled by an employer?

Understanding Mental Disability Discrimination as an Employer

Federal law bars employers from taking adverse employment action (not hiring somebody, firing somebody, refusing promotions, etc.) based on a protected classification such as race, national origin, religion, gender, veteran status and disability. Specifically, the Americans with Disabilities Act (ADA) protects against discrimination based on an actual or perceived (by an employer) disability. This includes mental disabilities.  Thus, an employer cannot take adverse employment action based on an employee or would-be employee’s mental disability.  What’s more, employers must make reasonable accommodations—any accommodation that would not cause undue hardship for the employer—for the special needs of an employee with some sort of mental disability.

So what steps can you take as an employer to ensure your business doesn’t run afoul of the law?  The EEOC’s first recommendation is, as with any disability, always act on facts as opposed to stereotypes about a mental disability.  An anxiety disorder, for instance, should not automatically disqualify an applicant for a position that is particularly stressful.  Instead, an employer should only take adverse action where they have actual evidence that a mental condition disclosed by an applicant would make them incapable of performing a jobs duties.  Additionally, where there is evidence that a mental disability would cause an applicant to create a serious safety risk–regardless of reasonable accommodations–an employer may fire or refuse to hire that person based on their mental disability.

We’ve mentioned reasonable accommodations a couple times now, and it’s worth explaining how they work.  They’re basically exactly what they sound like, you need to make changes to workplace environment, work schedule, etc. so long as they aren’t so costly as to put a serious burden on an employer.  Some examples from the EEOC include altering work schedules to allow an employee to attend therapy sessions, providing quiet work spaces, specific shift assignments, etc.

Obviously an employer does not need to make any and all accommodations, sometimes the cost of such an accommodation will simply make it a bridge too far.  However, it’s important to understand that you must at least attempt accommodations for an employee before taking action unless you’re eager for a discrimination lawsuit.

What Does That Mean for You?

We’ve established that an employer can’t usually take adverse employment action based on any mental disability you may have–this includes firing you, refusing to hire you, denying you promotions or raises, forcing you to take leave, or even relegating you to worse duties or shifts than your peers.

Generally, you are allowed to keep your condition private and an employer may only ask about any condition you have in certain specific situations.  First, if you ask for accommodations–more on that later.  Second, after it has made you an actual job offer but before you start work.  Third, when they are engaged in some sort of affirmative action in hiring–focusing on tracking employing people with disabilities.  Finally, when there is some objective evidence that you either pose a danger or are incapable of performing your duties due to your condition. 

There may be situations where you choose to disclose any condition you may have, such as where you need specific accommodations in order to perform your duties.  You may also want to disclose in order to establish that you should receive benefits through other laws such as the Family and Medical Leave Act–a federal law requiring employers to provide employees with a certain amount of unpaid leave for medical reasons or to take care of family members.  As a rule, it is better to disclose a condition and receive accommodations or benefits before they become necessary.

Any disability qualifies under the ADA which, without treatment, would substantially limit, for example, your ability to communicate, care for yourself, concentrate, interact with other people or make your duties harder, more uncomfortable, or particularly time-consuming.  This is true even if you have the condition under control via treatment.  It is important to understand that a mental condition does not need to be extremely severe or even permanent in order to receive protection and accommodations under the ADA.  In fact, temporary mental conditions are more likely to merit accommodations such as leave because they will eventually pass.  The question in whether a temporary mental condition will qualify is not necessarily how frequently it could limit you, but instead how restrictive they are on what you can do when you are afflicted. 

How to Protect Your Rights as an Employee with a Mental Disability

If you think an employer has violated your ADA rights, reporting the situation to the EEOC will allow them to advise you on the situation and begin an investigation of their own.  You should also report to the EEOC if you are harassed in the workplace over your condition, and an employer fails to take steps to correct this despite being informed of the issue.  It is also illegal for an employer to retaliate against you for reporting to the EEOC or bringing an action against them.  Remember that there is a time limit on bringing suits such as these, generally 180 days after the violation occurs, so know your rights and if you think you are mistreated–act before it is too late.

Can a Miscarriage Be a Wrongful Death Claim?

A recent decision from the Alabama Supreme Court allows a woman to proceed forward with a wrongful death suit against her obstetrician after suffering a miscarriage.  While the decision has rocked a few boats, the Court only affirmed existing laws that allow a person to sue for the wrongful death of an unborn child.

Miscarriage Wrongful DeathLet’s Check the Facts

Two days after finding out she was pregnant, Kimberly Stinnett experienced abdominal cramping and fever.  After an evaluation that included ultrasound, an obstetrician determined that Stinnett, based on the findings from the evaluation and Stinnett’s prior medical history, was experiencing an ectopic pregnancy.  An ectopic pregnancy occurs when a fertilized egg attaches itself in a place other than inside the uterus, which makes it impossible for a fetus to develop.

The obstetrician performed a dilation and curettage, commonly referred to as a “D&C”, which is a surgical procedure used to determine whether a pregnancy is intrauterine (within the uterus) or ectopic. Stinnett testified that the obstetrician told her, as a result of that surgical procedure, the pregnancy wasn’t ectopic, but that she believed a miscarriage had taken place.  The obstetrician, however, testified that she still had a strong suspicion that the pregnancy was ectopic and therefore ordered a drug commonly used to treat ectopic pregnancy.  The drug is intended to cause the end of pregnancy and was administered to Stinnett.

Stinnett attended a follow up appointment, in which she saw her original doctor.  A follow-up ultrasound showed that Stinnett was having a failing intrauterine pregnancy, possibly as a result of the drug the previous obstetrician had given her.  Several weeks later, Stinnett suffered a miscarriage.

Stinnett brought suit against the obstetrician and claimed:

  • Medical negligence for performing the D&C and administering the drug,
  • That because her pregnancy was not ectopic, the D&C should not have been performed nor should the drug should have been administered, and
  • That the obstetrician’s actions violated the applicable standards of care and proximately caused the loss of her baby.

In addition to her medical malpractice claims, Stinnett claimed wrongful death of her unborn fetus under Alabama’s wrongful death of a minor statute.  The personal injury claims stemming from the medical malpractice suit were allowed to go forward, but the lower court dismissed the wrongful death portion of the suit.  Stinnett appealed.

Why Did the Alabama Supreme Court Allow the Wrongful Death Claim to Move Forward?

Among other arguments, the obstetrician’s main argument rested on the idea that the wrongful death of a minor statute didn’t apply to her due to an exemption within another Alabama statute limiting criminal liability for licensed physicians who, through mistake or unintentional error, caused the death of a previable fetus.  The argument rested on the idea that if criminal liability was exempted, so too should civil liability.

The lower court agreed, but the Alabama Supreme Court ruled otherwise, stating, “[I]t simply does not follow that a person not subject to criminal punishment under the Homicide Act should not face tort liability under the Wrongful Death Act”.  The high court found doing so would, essentially, defeat the purpose (to prevent homicides) of allowing wrongful-death claims based on negligence in the first place.

The court remanded the wrongful death claim back down to the lower court, which means Stinnett has a chance to argue it in front of a jury.

Will She Win?

This case can appear a bit convoluted because it involves both wrongful death, as well as medical malpractice, but they essentially coincide with each other.  Wrongful death suits are brought when a person dies due to the negligence or misconduct of another.  In order to bring a successful wrongful death cause of action, Stinnett will need to prove:

  • The death of a human being,
  • Was caused by the obstetrician’s negligence (or intent to cause harm), and
  • That Stinnett is suffering monetary injury as a result of the death of her fetus (think losing future income from a spouse).

Alabama law allows wrongful death suits on behalf of previable fetuses, so Stinnett will have no problem proving the first element; it’s the other two elements that will be harder to prove.

Medical malpractice is one circumstance a plaintiff can use to prove a wrongful death claim.  If Stinnett can prove that the obstetrician acted negligently in a way that another competent obstetrician in similar circumstances would not have acted, then she’d have a good argument for medical malpractice.

Remember when I said Stinnett filed suit for medical negligence and wrongful death?  Even though the wrongful death suit was originally dismissed, the personal injury claims proceeded forward and a jury found in favor of the obstetrician.  What does that mean?  That the doctor wasn’t liable, which implies she followed the appropriate standard of care.  If that’s the case, then Stinnett won’t have much luck proving a wrongful death claim.

The Alabama Supreme Court noted in their decision that it wasn’t clear whether the jury’s decision rested on the obstetrician’s standard of care or whether it rested on the theory that Stinnett didn’t suffer any damages.  For those reasons, Stinnett has the option to proceed forward and, if she chooses to, she’ll need to prove both negligence with respect to the standard of care and that she suffered monetary injury.

Can Marijuana Businesses Survive the Trump Administration?

One of the most notable trends of the most recent election was the explosion of laws legalizing recreational and medical marijuana across the nation. In fact, while only 8 states currently allow recreational use, the majority of states have legalized the use of marijuana in one form or another. This explosion has caused a chain reaction, a matching eruption of businesses prepared to sell marijuana products wherever it is legal.

One of the largest of these companies is Dixie Brands, an enormous Colorado-based business. Dixie Brands, founded in 2010, currently has branches operating in Arizona, Colorado, California in Nevada. They have in the news recently for their desire to spread nationwide with planned expansions to Maryland, Oregon, and Washington.

Marijuana Business

However, operating and expanding as an operation in the business of selling a product that is federally illegal is understandably extremely complicated. Not only does each state have its own notably different set of laws on how a business must operate but federal law bars marijuana companies from a number of things most businesses would consider necessary to operate. In fact, the majority of the growth of the industry is predicated off the hands off approach of the federal government under the Obama administration.

Marijuana Businesses Under President Obama

In August of 2013, the Obama administration issued a memo stating that it would not interfere with legal cannabis business so long as they operated in states with fully fleshed out regulatory regimes for such businesses such as Colorado. In December 2014, President Obama signed a bill into effect which limited how the Justice Department could stop states from putting their own rules into effect when it comes to marijuana.  In a recent interview, President Obama went so far as to say that he believes that marijuana should be treated as a health issue in same vein as cigarettes and alcohol. He went out of his way in the same interview to note that polls show that the majority of people who voted for President-elect Trump feel the same way.

What They Might Face Under President Trump

These comments come after Trump has picked Sen. Jeff Sessions as his top choice for U.S. Attorney General–a particularly controversial pick.  Senator Sessions was nominated for a position as a federal judge by President Reagan in 1986. However, a Republican led Senate Judiciary Committee refused to appoint him after a number of racist comments and opinions came to light. Senator Sessions referred to the NAACP as “un-American,” repeatedly called the African-American Assistant United States Attorney Thomas Figures “boy,” and–perhaps most relevant for the state of marijuana law across the country–said that he thought the KKK were good people “until I learned they smoked pot.” While President-elect Trump has previously supported a hands-off approach to marijuana, his pick of Senator Sessions for U.S. Attorney General certainly points in a different direction–much to the chagrin of companies like Dixie Brands.  Senator Sessions is, as you can probably tell from his statements about the KKK, extremely outspoken in his opposition towards marijuana as a whole. Senator Sessions has stated that “one of [President Obama’s] great failures …is his lax treatment and comments around marijuana.”  He has been quoted as saying “We need grownups in Washington to say, ‘Marijuana is not the kind of thing to be legalized, it ought not to be minimized, and that it’s a real danger.'” He has even gone so far as to say “good people don’t smoke marijuana.”

All of this points to a potential change in stance from the incoming administration; the kind of change in stance that could be catastrophic for a business like Dixie Brands and the entire industry they belong to. So what exactly are the legal obstacles currently facing businesses based around marijuana products and how can a firmer line on marijuana make things even worse for these businesses?

The Legal Roadblocks of Selling Legalized Marijuana

First and foremost, the obvious elephant in the room.  Marijuana is federally illegal. Federal law supersedes state law when the two conflict. Thus, so long as marijuana remains criminal at the federal level the entire business could come crashing down in a matter of months or weeks with just a few changes to enforcement and federal laws. Supreme Court cases have shown that even personal use or cultivation of marijuana within a single state has sufficient impact on the nation as a whole to allow for enforcement of federal laws despite contrary state law. The bill signed by President Obama protecting such state laws from interference could be easily overturned by a conservative Congress with the mind to do it. If the choice of Senator Sessions as U.S. Attorney General signals an administration in line with his way of thinking, action such as this may well be in our future.

So, to say that the marijuana business is on shaky ground is a bit of an understatement. However, businesses such as Dixie Brands are used to operating on shaky grounds. The nature of their business has always involved some level of legal headaches in areas such as intellectual property, forming binding contracts and advertising. However, there are some legal issues that are even more fundamentally problematic for companies selling marijuana products.

Legal Transportation of Marijuana

One of the biggest of these headaches is that federal law makes it illegal to transport marijuana across state lines–interstate commerce is generally the realm of the federal government and the federal government says marijuana is illegal. The federal government can even prosecute people transporting marijuana from one legal state to another. The penalties for a violation of these rules are hefty–up to five years in prison or fines of up to $250,000.

This is especially relevant now that the entire block of states along the west coast all have legalized marijuana. In a normal franchise, standardizing providers and shipping equivalent quality goods to all your branches is standard practice.  However, this is illegal for marijuana companies and requires these companies to find a different legal provider of marijuana in every state they operate in. While some states have made it clear that enforcing these laws at their borders is not high on their priority list for single persons, this doesn’t necessarily apply for a larger business shipping large quantities and doesn’t prevent federal operatives from intervening.

What About Banking for Marijuana Businesses?

Another common issue facing businesses selling marijuana products is banking.  The fact that marijuana is, once again, illegal at a federal level has made most banks very hesitant to accept any money from a marijuana-related business. The problem is that this money is essentially earned through committing a federal crime and banks are fearful they may lose their required FDIC and NCUA insurance as both of these are provided by the federal government. Even worse, by working with a business like Dixie Brands a bank could face a lawsuit brought by the federal government.

Back in February of 2014, a division of the U.S. Department of the Treasury known as the Financial Crimes Enforcement Network (FinCEN) has created guidelines under which a bank may safely work with a marijuana-related company. These rules made it so that banks could work with companies selling marijuana so long as they file frequent Suspicious Activity Reports proving that the people they work with aren’t committing fraud or laundering money. However, while the rules made it technically legal to work with a company marijuana products, they also make it so expensive and time consuming to do so that no bank actually chooses to take FinCEN up on the offer. What’s more, these guidelines are not actually binding law but merely recommendations. This means that a change in position from the federal government, such as the one that looks to be on the horizon, would leave any bank following the FinCEN guidelines hung out to dry in a potential legal crackdown.

This issue has led to two things.  First, the marijuana industry is primarily a cash industry with all the problems that brings with it.  The interstate nature of credit cards, electronic payments, electronic transfers, PayPal and similar services tender all these payment methods unavailable to marijuana-related businesses. There are stories of owners of marijuana-related businesses coming to pay their taxes with sacks and sacks of cash like a Scrooge McDuck cartoon.  Second,  states have been forced to try and design their own internal banking services to help regulate the businesses they seek to tax.  Some of these, such as the newest regulations out of California, will only be taking effect later this year.

Is This the End of Expanding Marijuana-Related Businesses?

There is, unquestionably, an enormous amount of tax revenue to be made and jobs that could be created through legalized and regulated marijuana in the U.S.  However, the stance of those the incoming administration has chosen to represent them is not a friendly one to legalization.  There are certainly arguments in favor of this side of the argument as well–difficulty of enforcement, difficulty in proving current intoxication, etc.  However, as it stands the public opinions of the incoming Trump administration are incongruent.  President-elect Trump himself has been publically supportive of the growing marijuana industry.  The man he has chosen to weigh in most influentially on the current laws of the federal government, however, has a diametrically opposed position.   The marijuana industry is, and has been, an incredibly profitable house of cards–we’ll have to wait and see if the Trump administration chooses to blow it over.