Exclusive Interview: California State Senator Nancy Skinner on Challenges for Cannabis Industry

You are speaking on a panel at the Cannabis Private Investment Summit in San Francisco on November 4th about the state of the cannabis industry. What are the biggest challenges ahead for the industry?

In California, we continue to have an unregulated, illicit market. The challenges with banking in cannabis really hurt businesses that want to be legal. The absence of regular banking and financial services for an entire industry prevents legal companies from being fully legal and means that the advantages for legal cannabis businesses from the state aren’t extended to companies in the illicit cannabis market.

What issues are you passionate about addressing in California?

I place no judgement on the reasons why people choose to use cannabis whether medical or recreational, there is clear evidence that there are many health benefits to it. And the fact that cannabis is still federally illegal interferes with ability to do the appropriate research to get good data on the health benefits or health risks. I have a strong interest in making sure the medical side of cannabis does not get lost in this recreational market. Just look at the opioid epidemic; initial research says that cannabis could play a big role in pain management reducing opioid use in this country. But again, the inability to have sanctioned research contributes to our inability to understand and access the full benefits of cannabis which further contributes to the epidemic.

What are some of the things the cannabis industry needs to do better?

We need them to really look at who has suffered most from the War on Drugs and include and support them. It is low income and black and brown communities. When we look at who is actually working in the legal cannabis space, it’s a very low percentage of those communities. There is a generational impact on the criminal justice aspect, and discrimination of the enforcement of drug laws. How we address that, remains a huge concern. In my own community of Oakland, we have created programs for greater equity, to give advantages to these communities. Oakland law requires a cannabis business needs to show that they have supported a legacy business or partnered with a social equity candidate. This has helped but we still haven’t seen the results we were hoping for; that has a lot to do with access to capital for these communities.

What are your thoughts on timing for the end of Federal prohibition?

I think as more and more states come on board it will gain more traction at the Federal level. I look at it like the recent bill I led to get payment for student athletes. Enough states took action with us that it forced the NCAA to take action. I’m not sure what that tipping point is for cannabis, but because of the prejudices around drug use it’s going to take legalization in more states before we reach the Federal tipping point and they end prohibition. The continued success of the industry monetarily, and the huge valuations, will also have an impact. Once Wall Street banks and others jump in, it’s only a matter of time. They could demand legalization and regulation.

What can the private sector do to help move the industry forward in a positive way?

It’s always a difficult role for any industry to put limitations on the use of its products. We are hearing that cannabis is 100% safe, but we don’t have enough research on its effect on things like adolescent brain development. Maybe there should be limits to use among adolescents from a recreational standpoint. As we saw with the vaping scandal, the clearer the industry can be about legitimate limitations on use and impacts it could have on certain populations, will help increase the credibility, acceptance and reputation of cannabis.

The Cannabis Private Investment Summit Series showcases the best and brightest cannabis entrepreneurs and is the premiere summit for institutional investors, family offices, and ultra high net worth investors. For additional information, please email us at info@kahnerglobal.com.