He reckons state stores for cannabis a non starter
Here’s the argument
Readers of my currently running newsletter entitled: “The Definitive Insider’s Guide to NH Cannabis Legalization History (2013-2025) Parts One – Four” are aware of the struggles and challenges New Hampshire faced attempting to implement a similar system of state-run stores to monopolize their adult-use program.
Here’s the bottom line:
It’s both a legally unviable model until the end of federal prohibition, and exclusionary unless parallel private enterprise sectors can viably co-exist with it.
It’s legally unviable because:
- The state cannot viably compel its employees to violate federal law as a condition of their employment.
- Whereas precedent permits a state to provide regulatory oversight, and a bank or financial institution can provide customary financial services to a cannabis business in compliance with state law, federal district court has concluded that operational control implicates RICO liability. Among other risks, state assets and pension funds, et.al, would be at risk under RICO litigation which would greatly incentivize interested parties initiating such actions.
Quickly recognizing this, stakeholders in New Hampshire shifted to a ‘state-controlled franchise model’ naively assuming such would provide ‘arms-length’ protection from these risks. As I pointed out in my monthly column at the time: “Cannabis & Hamburgers”, presuming that one is not directly in the cannabis business because one has franchisees is as prima facia absurd as McDonalds claiming it’s not in the hamburger business since it has franchisees.
Our experience in the MasterCard/Visa world of payment processing has demonstrated repeatedly how fragile a protection attempting to create a buffer between cannabis transactions and prohibited business activities is in practice.
It’s exclusionary because:
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