Pot lobby grows in Washington

The lobbying push for the reform of marijuana laws continues to grow in Washington.

The National Cannabis Industry Association (NCIA) filed its first lobbying disclosure forms last week. Seeking to gain banking access and secure tax deductions for medical marijuana dispensaries, the trade association joins a small cadre of groups that have sought to bring the drug from the social fringes into mainstream American life.

Medical marijuana is already legal in 15 states, including California, Colorado and New Mexico, and more states are expected to follow. Steve Fox, NCIA’s director of public affairs, said lawmakers should realize cannabis is here to stay.

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“There is a definite trend in society, due to demographics, which in the very near future there will be more than 50 percent support for the legalization of cannabis,” Fox said. “It may seem strange in the halls of Congress but cannabis is popular throughout the country and many want it to be legal.”

It shouldn’t be too surprising though, considering how big the industry has become. In March, financial firm See Change Strategy released a report that estimated the legal medical marijuana business is worth $1.7 billion.

With that income comes a growing lobby to represent its interests in Washington, leaving NCIA not alone in advocating for those who want marijuana law reforms. The trade group joins Americans for Safe Access, the Marijuana Policy Project and the National Organization for the Reform of Marijuana Laws (NORML) who have all pushed for the loosening of various anti-marijuana laws.

Some of these groups have been active for years. Americans for Safe Access has spent $410,000 on lobbying since 2006 while the Marijuana Policy Project has spent $995,000 on lobbying since 2002, according to lobbying disclosure records.

Having been lobbying since January this year, NCIA has only spent $5,000 on lobbying so far. Nevertheless, Fox’s group already has more than 60 companies active in the medical marijuana business — with just one member selling more than $20 million worth of medical marijuana last year.

When Fox discusses his work for NCIA, it sounds like any other trade group in Washington: looking to see what laws and regulations need to be tweaked for his industry’s business to grow.

He has lobbied for medical marijuana dispensaries to receive the same tax breaks other businesses can earn.

“These businesses that operate legally under state law should be able to deduct their business expenses like anyone else,” Fox said. “They want to be transparent about their operations and pay their fair share of taxes. The laws should allow and encourage them to do so.”

Fox also said despite being legal in many states, medical cannabis businesses are running into trouble with banks. Financial institutions are refusing medical marijuana dispensaries as clients due to stringent requirements that they report suspect activity. He has been lobbying to clarify federal banking laws.

“Banks need to have the confidence that they can do business with medical marijuana dispensaries without worrying about a failure to report that will run afoul of federal law,” Fox said.

The NCIA is finding supporters in Congress for their cause.

Rep. Pete Stark (D-Calif.) will likely introduce a bill next week that will allow state-legal medical marijuana dispensaries to take business tax deductions, just like any other legal business, according to one of the lawmaker’s aides.

That follows a November 2010 letter signed by Stark and five other House Democrats to IRS Commissioner Douglas Shulman. They asked the tax agency to allow medical marijuana dispensaries to take trade and business tax deductions on their revenue.

Rep. Jared Polis (D-Colo.) also plans to introduce legislation soon to help medical marijuana dispensaries with their banking problems.

Polis’s bill would allow a state governor to create a certification process for state-legal medical marijuana dispensaries. That would confirm to the banks that they are legitimate and did not need to be reported to the authorities, according to one of Polis’s aides.