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The pot industry has the same political problem as the rest of American business: Donald Trump

In this Jan. 31, 2017 photo, agriculture regulators from seven different states and Guam tour a Denver marijuana growing warehouse on a tour organized by the Colorado Department of Agriculture in Denver. The department is opening up its marijuana knowledge to other states and encouraging them to plan now for the possibility of regulating farmers growing a plant that violates federal law.
AP Photo/Kristen Wyatt
Deep in the weeds.
  • Tim Fernholz
By Tim Fernholz

Senior reporter

Published This article is more than 2 years old.

Elise Warren came to Washington because she is tired of counting tens and even hundreds of thousands of dollars every morning before opening her store.

That may sound like a fine problem to have, but for Warren, the manager of a legal marijuana dispensary in Corvallis, Oregon, operating a cash-only business is risky and a chore. While marijuana is legal in some states it remains illegal federally, which makes it difficult for cannabis companies to use banking services; and those banks that do welcome the business often charge punishingly high fees and interest rates.

Warren was among the 250 members of the National Cannabis Industry Association who came to the capital this week. They thanked members of Congress for backing a recent amendment to block the federal government from interfering in state-regulated marijuana businesses, and petitioned lawmakers to rewrite legislation that prevents business owners from using normal financial services or even deducting common business expenses when filing their taxes.

“We’re not here to talk about legalization, but sensible policy to help regulate the industry,” Warren says. “If we don’t exist, the cannabis black market still will.”

Warren and her fellow pot dealers aren’t the only ones asking for tax relief, a regulatory fix, or protection from foreign competition. Conventional lobbying powerhouses like the National Association of Realtors have also blanketed Capitol Hill this week to push their agenda.

But nearly everyone is hearing the same response: Despite a Republican Congress eager to enact a business-friendly agenda that was often stymied during the Obama administration, don’t count on much happening this year. The political oxygen that could fuel tax reform or a regular appropriations process will likely be consumed by the constant scandals facing the Trump administration. Even the most optimistic Republicans now liken his situation to Bill Clinton’s time spent battling investigations into his affair with a White House staffer or the Iran-Contra investigation that bedeviled the latter years of the Reagan administration—and that was before yesterday’s announcement that former FBI director Robert Mueller will be appointed as independent counsel to investigate Russian interference in the 2016 election.

To pass laws the president must often act as a spokesman and cheerleader, if not a deal-maker himself. With the White House staff deeply divided and focused on battling allegations against the president, and the vast majority of politically appointed posts still empty, there is little to cajole Republicans lawmakers into line. That, in turn, limits the scale of a president’s priorities. “You can’t do issues eight or nine or ten, if you can’t tackle one or two or three well,” a former Obama White House official tells Quartz.

Presidents often like to push through popular legislation during their early days in office to cement their political capital, but for Trump that time has passed. Talks on tax reform, a key priority, have bogged down, with conflicting signals coming from the White House and Congress. Trade negotiations are unlikely to begin until next fall, with Congress still awaiting official notification of a Nafta renegotiation from the president.

And while the House of Representatives has passed a first (and highly unpopular) version of a health-care bill, Senate Republicans have said they will re-write it wholesale. In the meantime, uncertainty is wracking the insurance industry. Members of both parties figure health care is the last real shot at major legislation in 2017, especially since they will need to agree on a new budget by the end of September.

Warren came armed with talking points tailored to the politics of Trump, who has made much of the opioid epidemic confronting Americans; districts that voted for him have been especially hard hit. Warren notes that recent studies have found that jurisdictions where medical marijuana is legal have a 25% lower rate of opioid deaths.

She was most hopeful about the possibilities of tax reform. The last wholesale overhaul of the tax code came in 1986, and nearly every industry sees an opportunity. The cannabis industry’s request is in many ways the simplest: Its businesses can’t deduct basic expenses, leaving them taxed on 80% to 100% of their income, rather than the 30% or so that is typical. Such a reduction would allow Warren to raise wages and benefits for the 17 employees at her store.

Her desire is a microcosm of the larger concerns facing business. But that relief remains months, if not years, into the future.

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