The long arm of the law stretches far and wide.
Reports out of Uruguay this past week state that the Latin American country, the first to legalize adult-use cannabis in 2014, is facing internal issues with distribution. The country officially began sanctioned cannabis sales through pharmacies in July. But issues have arisen because – wouldn’t you know it – the zealous anti-drug proponents of US prohibition have reached their tentacles into independent state affairs.
Three international drug treaties (the 1961 Single Convention on Narcotic Drugs, the 1971 Convention on Psychotropic Substances, and the 1988 Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances) define the limits of legal production of certain substances acceptable under international trade rules. These substances primarily address, of course, drugs which are listed in the United States Controlled Substances Act – a measure included in the Comprehensive Drug Abuse Prevention and Control Act of 1970 under President Richard Nixon. As one might suspect, the United States has been the international whip cracker when it comes to enforcing these Draconian laws. In 2009, I participated in the first Latin American Drug Policy Conference in Buenos Aires, Argentina, organizing youth activists on behalf of Students for Sensible Drug Policy, which I was working for at the time. My greatest take-away from that experience was the recognition that many countries, though democratically independent, effectively had their hands tied from meaningful action by the domineering crush of United States extremist drug policies.
Actors in the movement have been speculating for years when and how international treaties would come into play for countries addressing the drug war through a more humane and reasoned approach (i.e. ending prohibition). General discussions I have participated in over the years with national and international policy experts have leaned toward the agreement that in moving the needle within the United States would create a internal conflict that would render enforcement of international treaties moot. In other words, having legal cannabis in states like California and Colorado while telling other countries they can’t do the same thing makes us hypocrites.
Now it seems we have come to the crossroads of cannabis and international law. Our federal government has figured out how to needle Uruguay on its program of nationally-regulated cannabis sales – by doing exactly to that entire country what it is doing to all US-based cannabis business owners: controlling the money. Last week, Uruguay’s leading financial institution, Banco Republica, followed suit of several private banks in the country announcing closure of bank accounts in Uruguay associated with pharmacies with licensure to sell the cannabis, citing international finance laws (code for US political bullying).
Arguably the biggest impediment to businesses in the cannabis market today is the problem with banking. Look to any state-legal market in the United States and you will find operators struggling to find a legitimate banking institution willing to do business with companies which simply have “cannabis” in their name, whether or not they actually deal with the plant.
As a result, leaders in the industry have been subject to repeated closed bank accounts and insecure monetary holdings, primarily because FDIC-approved banking institutions fear legal problems stemming from activities which could be viewed as money laundering for illegal drugs (cannabis). Apparently the Feds have figured out this method as an effective tool in slowing down the legalization of cannabis, and now, they have targeted the independent country of Uruguay with the same attempt at control.
While there seem to be infinite peddlers of alternate solutions to the banking problem, the best, and truly only real solution, is to simply end cannabis prohibition – ideally by removing cannabis from the Controlled Substances Act. Personally, I come from an activist background. While I did not imagine the kind of advocacy I would be working toward when cannabis laws became more liberated, I have reached the conclusion that in today’s activism, it is impossible to separate industry from policy, and an understanding that the traditional “movement” of cannabis legalization needs to work in common interest with the growing community of entrepreneurs in the cannabis industry. Until the United States ends cannabis prohibition, innocent patients and consumers in Uruguay and in other countries around the globe, will continue to suffer.
Learn how the cannabis industry is working to end cannabis prohibition at the federal level during our “Legal Landscapes in the Trump Administration” panel including Aaron Smith of the National Cannabis Industry Association, which is working directly on federal banking legislation, at the International Cannabis Business Conference this December 1-3, 2017 in Kauai, Hawaii! Get your early bird tickets now!