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The War on Marijuana Has Changed Its Face

Jun 15, 2017 • 5:52 PM EDT
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4 MIN READ  •  By Michael Berger
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The federal war on marijuana has been quiet on the front lines for some time now. No raids, no law suits, and with the drama between the DOJ, President Trump, and Russia clouding Washington DC, there are very few who are expecting any type of negative enforcement from the Department of Justice. Even if this drama were to be resolved, the political will of the prohibitionists would be very hampered from the fall out and they still would have to find funding to pursue cannabis law breakers.

But do not be fooled – the establishment will always find a way to fight for what it perceives to be against its interests. The war on the cannabis industry is heating up on different battle fields and is certain to create even more nervousness among cannabis supporters.

U.S. Customs and Border Protection officials, in April of this year, seized a large shipment of Stashlogix containers in Los Angeles. Stashlogix makes combination lock products designed to keep children from accessing marijuana contained inside. U.S. Customs and Border Protection agents referring to the product as drug paraphernalia and hence found justification for the seizure. Stashlogix makes a variety of personal travel and storage cases designed to keep pharmaceuticals, medications and valuables out of reach of kids, pets, or snoops. This is an incredibly ridiculous attack considering the cases are also used to store prescription medication in a variety of commercial and personal ways.

Skip Stone, founder of Stashlogix, started the company two years ago and has patented the storage cases. Even more, ancillary cannabis businesses such as Stashlogix have been thought to be the low risk side of the industry, but that could be changing. Amazon even sells Stashlogix products on their website, implying that Amazon is selling paraphernalia. Are pipe makers, vap pen manufacturers, and the like going to be targeted next?

“This devastating action by the federal government makes no sense,” said Stone in an interview with Forbes Magazine. “While the seizure appears to be legal, denying parents the ability to simply protect their children from cannabis, which is legal in 29 states and the District of Columbia, seems absurdly wrong-headed. We wonder if this action marks a fresh effort by the federal government to interfere with states’ rights relative to cannabis laws and business.”

The current agreement between the federal government and states is that states may pursue medical marijuana as long as they have a well maintained legal framework for doing so. Could this attack on the ancillary businesses working to uphold that legal framework be the prelude to justification for cracking down more? It seems fairly contradictory to then seize a company that focuses on packaging and specifically packaging that will keep it out of children’s hands.

Other border battles are playing out for industrial hemp, the non-psychoactive cousin of marijuana, across the country. Over the past few years’ federal authorities from the DEA and U.S. Customs and Border Patrol have seized shipments of hemp seeds bound for dozens of states across the country. Colorado, Arizona and Kentucky have all faced seed seizures in recent years, despite the pull back on prosecution for medical and recreational marijuana. While most states end up taking the federal government to court (and winning!) the delay to the farmers is often unrecoverable as they miss growing seasons and waste precious dollars as their fields sit empty for a growing season.

Another angle of attack has recently come from anti-marijuana businesses attacking operators of the cannabis industry. In Nevada, where adult use marijuana is about to be available for purchase, and where medical marijuana has been operational for a few years, we have seen the first case of a Cannabis CEO attacked by local businesses. Isaac Dietrich, the CEO of cannabis social media site ‘Massroots’ was kicked off and prohibited from gambling at Wynn Resorts because his income comes from cannabis. A ridiculous and false charge, as his income comes from a completely legal, and publicly traded, social media site.

“I can confirm that I was permanently banned from gambling at Wynn Resorts on June 7, 2017 due to my role as Chairman and CEO of a publicly-traded technology company focused on the cannabis sector,” said Dietrich in an article with Forbes magazine.

Forbes continued further by saying that ‘Wynn Resorts has not confirmed that it banned Dietrich, but in an email exchange with him they wrote, “Our regulatory requirements are not limited to identifying businesses that facilitate the sale of marijuana – we are obligated to identify the source of wealth of our customers to ensure the funds have been lawfully earned.” The Wynn representative went on to say, “The “state vs. federal” debate will continue at much higher levels than this email. Until that debate is clearly resolved with respect to the Bank Secrecy Act, the Wynn Las Vegas leadership team has chosen to take the more conservative approach.’

Considering that not only is Las Vegas, and Nevada in general, very pro marijuana – but that they also host a few major marijuana conferences – it is shocking to see Wynn act towards reputable and successful CEO’s in this manner.

We will be keeping an eye out on how the establishment to see how else they continue to attack the Cannabis industry.

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Authored By

Michael Berger

Michael Berger is Managing Partner of StoneBridge Partners, LLC and Founder of Prior to entering the cannabis industry, Michael was an Equity Research Analyst at Raymond James Financial covering the Energy Sector. Michael has been featured in publications such as The Street, Bloomberg, US Money News, and hosts various cannabis events across North America.


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