Legal Yet Unbankable: Inside The $100 Billion Underserved Market

Duane Morris partner Joseph Silvia is quoted in the Forbes article, “Legal Yet Unbankable: Inside The $100 Billion Underserved Market.”

Across the U.S., thousands of legal businesses wear the “high-risk” label and are quietly excluded from basic financial services—not because of any wrongdoing, but simply the industries they operate in: cannabis, firearms, crypto, adult content. And few face steeper barriers than cannabis businesses. Even with state-level legalization and proper licensing, most are relegated to bare-bones banking. The full financial stack—lending, investing, credit cards—remains out of reach due to federal prohibition and institutional risk aversion. […]

But the obstacles go far beyond payment friction. Because cannabis remains a Schedule 1 substance, the IRS bars businesses from deducting ordinary expenses like rent, payroll, or marketing—leaving many taxed on gross receipts instead of profit, with effective rates soaring past 70%. “The core obstacle to providing traditional banking services to cannabis businesses is the unresolved conflict between state and federal law,” said Silvia. “Over the past decade, many of these businesses have become legitimate enterprises serving diverse customers. Yet institutions that choose to serve this industry must do so amid regulatory uncertainty, heightened scrutiny, and elevated risk expectations.” […]

Read the full article on the Forbes website.

Webinar: Rescheduling vs. Decriminalization – The Movement for Cannabis Legalization and Its Impact on Today’s Market

Duane Morris will hold its next Cannabis Webinar, Rescheduling vs. Decriminalization – The Movement for Cannabis Legalization and Its Impact on Today’s Market, on Thursday, May 8, 2025, from 12:30 p.m. to 1:30 p.m. Eastern.

REGISTER FOR THE WEBINAR

The panel discussion features journalist filmmaker Michele Mitchell, who will examine the history of the cannabis movement, its impact on the current state of the cannabis market, and whether rescheduling or decriminalization would have the most beneficial impact for cannabis as this nascent industry continues to grow.

SB 3 Rolls into the Texas House of Representatives

After an hour and a half of debate on the Senate floor, Senate Bill (SB) 3 is engrossed. The bill received 24 ayes and 7 nos.

Senators who support the bill told stories of children and young adults losing all function after ingesting products containing intoxicating hemp. They emphasized how important it is for law enforcement officers to be able to immediately tell whether a product is illegal during a traffic stop, rather than make an assumption.

Opponents of the bill requested regulation instead of a total ban and raised the issue of veterans and other individuals who rely on these products rather than relying on alcohol and opioids for relief. Senator Charles Perry assured them that physician-prescribed hemp products will be more accessible under the Texas Compassionate-Use Program after a corresponding bill—SB 1505—is introduced and passes this Legislative Session.

Continue reading “SB 3 Rolls into the Texas House of Representatives”

Is Delta-8 Going Away in Texas?

The 89th Legislative Session in Texas officially began on January 14, 2025, and one of the hottest topics during this session is Senate Bill (SB) 3, which proposes to ban all forms of consumable THC in Texas. According to Texas Lieutenant Governor Dan Patrick, SB 3, carried by Senator Charles Perry (R – Lubbock), is intended to prevent the sale of products that, on the surface, appear to be compliant with federal law as they are purportedly hemp products, but in reality are oftentimes manufactured in such a way that resulting THC concentrations are higher than cannabis products sold in state-licensed retail dispensaries. Importantly, recreational cannabis use remains illegal in Texas, but is legal for medicinal use with a physician’s prescription through the state’s Compassionate Use Program.

Continue reading “Is Delta-8 Going Away in Texas?”

What New Calif. Law Means For Cannabis Lounges

For years, movies, music and other aspects of popular culture have hailed Amsterdam as the number one destination for openly consuming cannabis purchased from “coffee shops.” […] However, one difference — at least in California where adult use cannabis was legalized in 2016 with the passage of Proposition 64 — is that consumption lounges have been unable to offer prepared noncannabis food and beverages on-site. This changed on Sept. 30, when California Gov. Gavin Newsom signed California A.B. 1775 into law.

Read the full Law360 article by Tracy Gallegos.

Duane Morris Attorneys Recognized by Cannabis Law Report

Tracy Gallegos and Paul Josephson, Duane Morris partners and team leads of the Cannabis Industry Group, are once again recognized in Cannabis Law Report‘s list of Global Top Lawyers.

The list honors cannabis practitioners via the publication’s annual survey of clients and lawyers in the cannabis legal services sector as well as its personal editorial decisions based on its reporting of the industry for nearly 10 years.

Employers Must Engage in the Interactive Process with Medical Marijuana Users and Cannot Refuse to Hire a Job Applicant Based on Marijuana Use Alone.

By: Kathleen O’Malley and Danielle Dwyer

Recently, Attorney General Matthew J. Platkin announced a Finding of Probable Cause by the New Jersey Division on Civil Rights (DCR) against Prince Telecom LLC (Prince) for declining to hire a medical marijuana user as a cable installation technician.  The DCR found the job applicant was subject to disability discrimination in violation of the New Jersey Law Against Discrimination (LAD).  The basis for the DCR’s determination was Prince’s rescission of a job offer after the applicant, a medical marijuana user, tested positive for cannabis in connection with a pre-employment drug screen.

Prince, a company that constructs and maintains telecommunications and cable systems, offered a technician job to the applicant pending a drug test.  The applicant informed the company that he had a medical marijuana prescription and used marijuana to treat a disability.  When the applicant tested positive for cannabis, he provided his medical marijuana prescription card to the company, after which Prince rescinded the job offer.  Prince maintained that it could not provide the applicant with any accommodation given the safety-sensitive nature of the job duties of the position (such as, driving company vehicles, operating machinery, working with electrical wires, climbing ladders and lifting 50 pounds or more).  According the DCR, Prince assumed that hiring a medical marijuana user to perform such tasks would expose the company to “enormous” liability.

The DCR issued a Finding of Probable Cause because Prince did not ask the applicant for additional information about the nature of his disability; how often and what time of day the applicant used marijuana; and what effect, if any, his medical marijuana use might have on him during work hours.  By failing to initiate discussions of that nature with the applicant, the DCR concluded that Prince did not meet its obligation to engage in the interactive process.  Under the LAD, employers have an affirmative duty to consider reasonable accommodations for applicants and employees.  Broadly speaking, this means an employer should have a dialogue with a disabled applicant or employee and should ask questions to determine whether the individual can perform the essential functions of the job with or without a reasonable accommodation.  Once the employer has sufficient information from the individual and/or the individual’s healthcare provider about the disability and any proposed accommodations, the employer can evaluate whether it is able to offer a reasonable accommodation without posing an undue burden on the company.  Employers who fail to engage in this interactive process violate the LAD—which is exactly what the DCR has accused Prince of doing.

While the LAD protects individuals with disabilities, it is also worth noting that both medical and adult marijuana use are legal in New Jersey and the state has enacted protections for the use of marijuana.  The Jake Honig Compassionate Use Medical Cannabis Act (CUMCA) prohibits an employer from taking an adverse employment action against an employee or applicant (e.g., terminating or refusing to hire) based on the fact that the employee is registered as a medical marijuana user.  The Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act (CREAMMA) protects adult use of marijuana and prohibits employers from taking adverse employment actions due solely to a positive drug test for cannabis.  CREAMMA also has specific and stringent protocols with respect to drug testing in the workplace.  Because CREAMMA went into law after Prince rescinded the applicant’s job offer, the DCR did not review Prince’s conduct to determine whether it violated that statute as well.

Notably, the DCR did not find that Prince had to accommodate the applicant’s use of marijuana in workplace or that it had an obligation to hire him.  The agency found that Prince had an obligation to engage in the interactive process—to gather information sufficient to consider whether it could have reasonably accommodated the applicant’s disability.  If Prince had learned the applicant used medical marijuana after work hours and would not be impaired or under the influence when reporting for duty, Prince may have been able to reasonably accommodate the applicant’s disability.  The laws in New Jersey are clear that employers have a right to maintain a drug-free workplace and do not have to accommodate use of medical marijuana in the workplace or during work hours.  Based on the DCR’s finding, Prince’s error was that it made too hasty a decision and did not gather any information from the applicant to determine whether it could have accommodated his disability.

Of note, a Finding of Probable Cause is not a final determination on the merits.  It means the DCR determined that there is sufficient evidence to warrant further proceedings against Prince.  The parties will now have the opportunity to resolve the case voluntarily through conciliation.  If the parties cannot resolve the matter, the case will move to the Office of Administrative Law or the Superior Court for further adjudication.

© 2009- Duane Morris LLP. Duane Morris is a registered service mark of Duane Morris LLP.

The opinions expressed on this blog are those of the author and are not to be construed as legal advice.

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