Page 22 ness owner will create hats or t-shirts with the company’s name and logo or even package an edible with the same. While in this situa- tion applying and getting approved for a trademark might be easier, holding onto the trademark is not. The business must actually sell the product (like the hat or t-shirt) in sig- nificant amounts to be able to hold onto the trademark. Further, this subtle workaround does nothing for what is potentially the com- pany’s most valuable intellectual property in its proprietary processes and manufactured goods. Banking: Getting a checking account has also proved to be extremely difficult for cannabis businesses. As such, cannabis businesses have remained predominantly cash-only. Banks fear having their assets seized by the Federal Deposit Insurance Cor- poration (FDIC) given cannabis’s illicit status under federal law. A similar memorandum issued by James Cole, Deputy Attorney Gen- eral, under the Obama Administra- tion also aimed to limit prosecution against the banking industry ser- vicing cannabis-related business. The memorandum emphasized the enforcement priorities and conclud- ed that financial institutions should be cognizant that the cli- ents that they are servicing are fully compli- ant with all state laws.23 Confirming compliance with state and local laws is a challenge in itself. There is paper- work regarding the cannabis entity itself, pa- perwork regarding state and local licensing, and the matter of tracing the source of cash deposits. Despite the opportunity in the near- ly $7 billion cannabis industry, the majority of the banking industry is not comfortable with the level of risk and uncertainty in the regulatory field. (Continued from page 21) However, certain third-party companies are will- ing to take on this challenge for the banks. Com- panies such as Hypur Inc. have designed soft- ware that is able to sort through all of the re- quired paperwork a cannabis business needs to operate within state law. They may also provide a point of sale (POS) system that is able to track every cash transactions and report it to the bank. The bank then can identify how much cash is being brought in and exactly where that cash came from. These options are important as the lack of available banking options creates ob- vious challenges for cannabis businesses, espe- cially regarding security of assets and the ability to obtain loans and funding. Food and Drug Administration Stance Re- garding Cannabis: Currently, the FDA’s stance on cannabis being used for medicinal purposes is simple. The FDA has not recognized such use. However, the FDA has approved two synthetically derived com- pounds, whose origins are from canna- bis, for medicinal purposes. Marinol and Syndros are FDA-approved drugs that have the active ingredient Dronabinol, which is a synthetic tetra- hydrocannabinol (THC), the psychoac- tive component of cannabis.24 These two drugs have been approved for treating anorexia associated with weight loss in AIDS patients.25 The drug Cesamet has also been approved by the FDA. This drug contains the active ingredient nabilone, which is also a synthetic derivative of THC.26 However, it is safe to assume that so long as cannabis remains a federally prohibited Schedule I drug, the FDA will not recognize can- nabis itself as having a medicinal purpose. The other aspect of lack of guidance from the FDA is that it leaves the manufactured edibles side of the business in flux. It leaves states to regulate their own THC allowances, with no con- crete guidance as to what is considered a recom- mended dose of THC in an edible and what may be a maximum dose. Although there has been no guidance from the FDA, there does appear to be some uniformity among states. Washington, Colorado, and Cali- Intersection of Federal and State Cannabis Law FBA/OC “Despite the opportunity in the nearly $7 billion cannabis industry, the majority of the banking industry is not comfortable with the level of risk and uncertainty in the regulatory field.”