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PUBLISHER:  CANNABIS LAW REPORT

 

 

Cannabis-Sharia-Finance

Cannabis-Sharia-Finance – Our attempt at covering a topic we wish we knew more about – expert input welcomed for an update/edit.

 

Sharia, Islamic Law and Narcotics or Psychoactive Drugs

Marijuana, hemp, or hashish is a psychoactive drug from the Cannabis plant, used for recreational or medical purposes. The main psychotropic ingredient of cannabis is a compound called tetrahydrocannabinol or better known as (THC), a compound responsible for causing an intoxicating effect. Marijuana can be consumed by smoking, vaporizing, within the food, or as an extract. Under Sharia law, marijuana is categorized under narcotics or “Mukhaddirāt.” In Arabic, muhkadirat or narcotics are any substance that makes a person feels sluggish and lazy, deprives sensation, and covers mind.

Regarding the Sharia rule on narcotics, there is no reference to drugs or narcotics in the early years of the Islamic era, even in the holy scripts of the Quran or the Sunna. Classical fuqaha’ (jurists) did not define what narcotic is even though they talked about various types of intoxicants. Instead, they focused on the general principles regarding intoxication to explain rulings. To understand how the jurists extrapolate a judgment regarding marijuana, we need to understand the reason for the prohibition of wine and alcohol beverages. Sharia law prohibits consuming wine and alcohol beverages, considering it as one of the major sins. The majority of the fuqaha’ (Maliki, Shafi’i, and Hanbali schools of thoughts) said that the reason for the prohibition of wine is the intoxication based on the Prophetic hadith states that “Every drink that causes intoxication is forbidden.”[1]

 

Cannabis-Sharia-Finance

Based on the prohibition of wine, as a general principle, intoxicants that alter an individual’s mind or affect perception, judgment, behavior, and ability to think are impermissible under Sharia. Therefore, recreational marijuana is forbidden.

 

Medical Use of Marijuana

Under Sharia, it is permissible to use marijuana for medical purposes under the “Doctrine of necessity,” one of the Islamic Jurisprudence principles that states “necessities permit the forbidden.” However, permissibility is not ultimate, several conditions must be met. The purpose of these conditions is to ensure that there is a real and absolute necessity. Using cannabis-based products and narcotics in general for medical treatment is permissible in the following cases:

    1. If the need for using such substance was an absolute necessity or “dharura” because necessity is the only exception that can make what originally forbidden to permissible. Relieving symptoms of pain, chronic conditions, or acute severe pain is a medical necessity.
    2. If the medicine is prescribed by a qualified and trustworthy physician who is considered as an expert in the field.
    3. In the absence of alternative lawful medicine that has the same efficiency.
    4. Using minimal amount to meet the patient medical need, and any over need doses considered impermissible.
    5. If the medicine does not cause harm that equal to or greater than the damage that already existed based on the Prophet’s (peace be upon him) saying: “There should be neither harming nor reciprocating harm.”

In summary, using narcotics–including cannabis– for recreational purposes is forbidden under Sharia because it is intoxicant that affects the person’s mind and judgment. Using cannabis for medical reason is permissible as long as the condition stipulated above are met.

 

Cannabis-Sharia-Finance

[1] Sahih Muslim, Book of drinks, Ch.7, every intoxicant is wine and every wine is forbidden, No. 2001. [A]

Sharia Law and Commercial Finance Transactions

[I pirated this from the website of the Federal Reserve Branch in Richmond, VA merely to share some background about Islamic finance rules] I have some background with this because a number of our clients do business here in Chicago with Devon Bank which is one of the US FDIC Chartered Banks that offers Islamic Finance products.

Islamic finance may be rooted in ancient texts, but as an industry it is relatively young.

The broader field of Islamic economics originated in 1930s India, when the country’s Muslim population, then about one-fifth of its total, feared marginalization by British colonialism and the Hindu-led movement for Indian independence. Heavily indebted Muslim farmers throughout the country were at risk of losing their land. Scholars blamed an abandonment of Islamic principles and called for a return to “true” Islam. Economist Timur Kuran of Duke University, author of several books and articles on Islamic economics, has argued that this revival was part of a broader movement to restore Muslims to their faith, carve out an identity for Muslim minorities, and generally protect Muslim interests. The state of Pakistan emerged from the same effort.

Usury discussions in religious texts far predate this movement, of course. Many followers of Islam, along with other religions, loosened usury restrictions over time, until the last century when older notions of usurious interest were revitalized. Still, what constitutes riba has long been controversial. To some scholars, it means excessive interest — which led poor, indebted citizens to slavery in medieval times — while to others, it means any interest at all. Scholars have also disagreed on the virtues of charging interest for business investment versus consumption, allowing for inflation compensation, and a host of other matters.

 

Cannabis-Sharia-Finance

Modern Islamic finance takes the narrower interpretation that no interest is permissible. Three alternative products are available in the United States. One of the most common contracts is musharaka, in which the lender and customer own an asset together, with the borrower’s share of the property increasing gradually with his payments until he assumes ownership entirely, with profits and losses shared. In a murabaha contract, the lender purchases an asset — a home or even commercial equipment — on behalf of a borrower, who gradually pays back the principal plus an agreed-upon markup and assumes ownership at the end. Ijara contracts resemble a lease-to-own arrangement that includes both repayment of principal and a rental fee for exclusive use of the asset.

The first bank following Islamic law opened in Egypt in 1963. Following the global oil boom, the industry developed in earnest in the Middle East in the mid-1970s. In the 1990s, the first international accounting standards were developed for Islamic finance, and the first market emerged for Islamic bonds. Those bonds, called sukuk, tie investments to tangible assets that issue payment streams based on their revenues, much like securitized equity financing.

Islamic finance came to the United States in the 1980s when two institutions opened on the West Coast. Their investment and home finance services were available only regionally. The market broadened considerably in the late 1990s, paralleling the Muslim population growth in the United States: 50 percent in the 1990s, and two-thirds in the 2000s.

 

Cannabis-Sharia-Finance

The institutions operational today provide services in several states, most prevalently where the Muslim population is concentrated. University Islamic Financial (a subsidiary of University Bank) based in Ann Arbor, Mich., serving the large Muslim population of metropolitan Detroit and surrounding states, is the first and only exclusively Sharia-compliant bank in the United States — it offers no other products. Devon Bank in Chicago is the only other bank regularly offering Islamic financing products. Reston, Va.- based Guidance Residential is the largest nonbank financial institution offering Islamic finance services, having provided more than $3 billion — which it claims is nearly 80 percent of the total — in musharaka mortgage financing in 22 states since its doors opened in 2002. California-based LARIBA is another large Islamic mortgage lender, and it also provides business financing.

 

We are certainly not experts on these topics and would welcome some expertise to refine this piece.

[A] See Medical Marijuana under Sharia