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Pot Politics: The Marijuana Business Comes To Washington

Sen. Rand Paul waves to supporters in Denver after he spoke to a closed meeting of cannabis business leaders earlier in the day.

State by state, the legal marijuana business is slowly gaining ground. The industry is using both an increasingly favorable public opinion toward marijuana and a newly legal cash flow to try to transform itself into a force in national politics.

Recreational marijuana retailers celebrated their first anniversary of legal operation in Washington state Wednesday, while last week marked 18 months for the recreational cannabis business in Colorado. And Oregon legalized it July 1, though stores there won't open until 2016.

Meanwhile, the presence of medical marijuana continues to expand, with New Hampshire Gov. Maggie Hassan signing a bill adding to the illnesses doctors may prescribe marijuana to treat. New York state will select medical marijuana growers to license later this month.

And all this legalized marijuana means lots of cash. Washington state has reported almost $260 million in total sales, gathering $65 million in taxes. Colorado said legal pot made $700 million in 2014.

As with any business, a rapid influx of money comes with more ability to shape the regulations they face from the nation's capital.

"Any industry that is heavily regulated by the government has to have an active voice," said Taylor West, deputy director of the National Cannabis Industry Association, the only national trade association to represent the legal cannabis industry. That includes the four states where retail sale for recreational marijuana has been approved and the 23 states with medical marijuana laws on the books.

"Cannabis is possibly the most regulated at this point," West said, "so there's always going to be a need for political advocacy on behalf of the industry."

Part of that advocacy starts with the White House. Last week, Sen. Rand Paul became the first presidential candidate from a major party to actively court donors from the budding legal industry.

About 40 people attended Paul's closed-door reception on the sidelines of the Cannabis Business Summit and Expo in Denver. Invitations put the cost of entry at $2,700 minimum, payable to the presidential hopeful's victory committee.

That Paul would take the lead in fundraising from the marijuana industry comes as no surprise. The libertarian-leaning Kentucky senator has been a critic of the war on drugs and was a co-sponsor, along with two Democrats, of a bill that would remove federal prohibitions on medical marijuana.

However, Republican politicians and marijuana advocates have historically been opponents since Richard Nixon declared drugs "public enemy No. 1." But changing attitudes have some GOP candidates backing off of the most draconian language of the "war on drugs."

Earlier this year, Pew found that 53 percent of Americans support legalization, including 68 percent of millennials. More than 60 percent of young Republicans favor legalization. And, between 2010 and 2013, support for marijuana legalization increased by 11 percent among all Americans.

Several Republican candidates have tried to strike a balance between pleasing the party's old guard, which favors keeping the drug illegal, and the younger faction, which increasingly favors more liberal social policies in line with limited-government ideals.

Speaking earlier this year to an audience of conservative activists at CPAC, former Florida Gov. Jeb Bush tried to find a middle ground on marijuana legalization in Colorado.

"I thought it was a bad idea, but states ought to have that right to do it," Bush said. "I would have voted no if I was in Colorado."

Sen. Ted Cruz expressed a similar sentiment at the same event. "If the citizens of Colorado decide they want to go down that road, that's their prerogative," he said. "I don't agree with it, but that's their right."

But others have vowed to crush the emerging industry that is still illegal under federal law.

Gov. Chris Christie of New Jersey said he would crack down on legal regimes in Colorado, Washington, Alaska and Oregon if he becomes president.

Another presidential contender, Sen. Marco Rubio of Florida, said federal laws against marijuana use should be enforced.

But more states look set to legalize, and the Department of Justice under President Obama has kept a mostly hands-off approach since 2013. Though legal under some state laws, the marijuana industry operates in a gray area, still subject to raids and seizures by federal authorities.

This uncertainty means banks have largely kept their distance from cannabis for fear of potential prosecution. Without access to credit, dispensaries are forced to operate in cash.

Colorado lawmakers have already taken notice. Colorado Sens. Michael Bennet, a Democrat, and Republican Cory Gardner introduced a bill Thursday to allow marijuana retailers access to bank accounts and credit card services.

Securing the existing industry enough to ease the fears of skittish bankers is chief among the marijuana business's concerns. This means working to change federal laws. The NCIA exclusively lobbies for the cannabis business at the federal rather than state level.

The trade group has a political action committee and two full-time staff members in Washington, D.C., including a lobbyist. It spent $80,000 on lobbying in 2014, according to data from the Center for Responsive Politics.

Still, when you consider the alcohol industry spent more than $24 million lobbying the same year, the "cannabusiness" lobby has a ways to go.

Predictions abound about a future of "big pot." ArcView, a cannabis industry research firm, put the size of the legal marijuana market at $2.6 billion in 2014. Another study by a pro-marijuana group said the industry, if fully legalized across the country by 2020, could be worth $35 billion each year.

Critics call those numbers overblown, but in any case NCIA's West says that the cannabis industry hopes to use the support of marijuana advocates around the country to put pressure on lawmakers.

"We're going to be making sure that [members of Congress] know their constituents care about this stuff," she said.

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