Pipe of peace: how the American Indians are planning to capitalize on the market of marijuana in the US

Legalization of marijuana in several US states has led to the rapid growth of sales in this business, which is hampered by distrust of creditors. The American Indians plan to fill the investment vacuum due to legal loopholes.
21.10.2015
RBC
Origin source
Tuesday, 3 November, in the US state of Ohio will hold a referendum on the legalization of recreational marijuana use. If the people support this initiative, Ohio becomes the fifth state (not counting the metropolitan District of Columbia), where the storage of the minimum amount of cannabis were allowed in recent years. The use of the marijuana for medical purposes is allowed in 24 regions of the US.

On the basis of the bill put to the referendum, every man over 21 years old will be able to carry no more than 1 ounce (28 grams) of the drug for personal use. Manufacturers will have the right to own up to four landings and have eight ounces of finished product (227 g). All activities on the cultivation and marketing of hemp to be licensed and will be taxed (15% for producers of 5% for sellers).

Withdrawal from marijuana black market will generate a multi-million dollar tax revenues to regional budgets - this is the main argument of supporters of legalization. In 2014, total revenues in the United States from the production and sale of cannabis was all legal forms, according to the ArcView MArket Research, $ 2,7 Bln. Eslonly talk about recreational marijuana, at the end of last year it was only fully legally in Colorado and Washington state. Revenue in these regions in 2014 was $ 313 million and $ 64 million, respectively, only for recreational, non-medical marijuana.

A growing market requires investment and lines of credit, however, the uncertain status of this business scares off potential lenders: still is at the federal level, marijuana is illegal, and large financial institutions prefer not to mess with the manufacturers and sellers of the drug, avoiding potential criminal prosecution. According to Bloomberg, from 7.6 thousand. American banks, only about 220 are ready to invest in this business.

Nat flavor

At a time when big players refuse to work in the regional markets of marijuana for fear of general federal prosecution, the initiative willing to take on Indian businessmen. The fact that the Indian reservations have so-called tribal sovereignty, so the power of US regulators and the security forces in these areas is limiteda. The tribes are not subject to US banking legislation, and the Indians there is a theoretical possibility of a parallel financial system, in particular for investment in the legal market of marijuana.

One of the instigators of such a system is a businessman Anthony Rivera of California tribe Juan. His company CannaNative tries to connect financial professionals, tribal leaders as potential creditors and legal marijuana market players as potential borrowers. Rivera explained to Bloomberg, a model of the new system and its financial base to become the Indian casinos, "which themselves are small banks."

Native American casinos in the United States was finally legalized in 1988, after several trials, in which the tribes have shown that some of the lottery and gambling is a part of their centuries-old tradition. Activities such casinos are divided into three classes: the first two were traditional games, they fell under the preferential taxation. The third class consisted of the classic games of chance, which was the tribe shouldobtain a state license. At the end of 2014 revenues in this market totaled $ 28.5 billion, according to the National Commission for Native American casinos.

The first years after the legalization of the industry tribes did not know how to manage large casinos (especially in games third grade), and invited experts on gaming management positions. A similar system is currently using and CannaNative, hiring experts marijuana market, so they taught the Indians the financial subtleties of this business.

Total company Rivera offers five areas of cooperation: the cultivation of hemp, the creation of the finished product, retail, the full cycle of work and turnkey implementation of the unique orders. "We believe that every family should be able to form and grow their own cannabis economy for the benefit of future generations" - so on your website CannaNative describes the goals of the company.

market costs

Californian Anthony Rivera - is not the only Indian who seeks to fill the void in the marijuana market. In late September, it was reported that one of the Sioux tribes in South Dakota is planning to contsu year to open a special smoking room at one of the Indian casinos in the city of Flandreau. In the state of drug use is prohibited, but the casino is on the territory of the reservation, than the Indians did not fail to take advantage - in June the executive committee of the tribe legalized the cultivation, sale, use and possession of cannabis.

The impact of marijuana on the economy can be seen in Colorado, which in November 2012, the first in the US to legalize non-medical use of drugs. On the one hand, the regional authorities are betting on the growth of tax revenues of up to $ 94 million annually in the 2016/17 financial year (versus $ 30 million in 2013/14-m). In Oregon, where the law on legalization came into force on 1 October 2015, marijuana has been sold in the first six days of $ 10.8 million. The state government expects that by 2017, similar values ​​($ 10.7 million) have already reached the annual tax revenues .

At the same time, the legalization of marijuana leads to a number of social and economic problems. For example, the desire to lovers of cannabis at all costs to move to Denver, Colorado capital created ogrefirst demand in the housing market and spurred up property prices in the state: in February 2015, the state took the lead on the growth of the index - 9.8% compared to February 2014. Those tax revenues that the government planned to spend on the prevention of drug addiction, go on buying property, which is then sold at low government prices.

In addition to the price of residential real estate legalization of marijuana affects the availability of commercial premises. In August, The Wall Street Journal found that lifting the ban on the cultivation of cannabis sparked a crisis in the market warehouse facilities in Colorado. Since plants need room to grow, many medium-sized warehouses in Denver (from 700 to 2 thousand sq. M.) Have turned to the closed farm. Rents of warehouses rose in 2014 by 10%, to $ 54 per 1 sq. m, and their purchase price doubled to $ 860 per 1 sq. m.

However, the most serious of the social consequences of smoking marijuana legalization is considered to be the impact of marijuana smoking on health. Russian drug experts have repeatedly criticized US authorities for permission to hold referendums, such as those that were in the coloringof Washington, Oregon, Alaska, the District of Columbia and soon in Ohio. "When the power comes in the wake of the low-lying interests of the population, it turns out that everyone will be addicted to drugs, - said the chief psychiatrist in February, the Ministry of Health Eugene Brune. - The use of marijuana - the entrance gate to the more severe addiction, and people who have a genetic and congenital risk factors necessarily become drug addicts. "

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