So you want to sell marijuana across state lines | Planet Money

Intro

In this episode of Planet Money titled “So you want to sell marijuana across state lines,” the hosts explore the challenges and opportunities faced by marijuana farmers in Oregon. They delve into the surplus of marijuana in the state, the financial struggles of farmers, and the legal restrictions that prevent the sale of marijuana across state lines. The episode follows the journey of Matt Achoa, a former marijuana trafficker turned legal businessman, as he navigates the complexities of the cannabis industry.

Main Takeaways

The Surplus and Financial Struggles of Marijuana Farmers

• Oregon has an excess of marijuana, with 8.8 million pounds grown for a population of just over four million people.
• The oversupply has led to a drastic drop in the price of marijuana, causing financial struggles for farmers.
• Marijuana farmers face the decision of whether it’s worth harvesting and processing their crop if there are not enough buyers.

The Unique Business Challenges in Oregon

• Oregon’s surplus of marijuana cannot be sold across state lines due to federal law, creating unique business challenges.
• Matt Achoa believes the solution is to sell the surplus marijuana to people outside of the state.

Matt Achoa’s Journey from Illegal Trafficker to Legal Businessman

• Matt’s early exposure to marijuana through a neighbor named Butch, who sold weed at his high school.
• Matt’s realization in his 20s that he could make more money by trafficking marijuana across state lines, leading to a risky full-time job.
• Matt’s arrest in Michigan in 2004 while transporting 500 pounds of weed, leading to a 37-month federal prison sentence.
• Matt’s changed perspective on selling marijuana after his time in prison, leading him to become a legal non-marijuana businessman in Oregon.
• Matt’s transition to building, selling, and renting geodesic domes in Oregon as a legal businessman.

The Legal Challenges Faced by Cannabis Businesses

• The federal government still considers marijuana illegal, creating legal challenges for businesses in the industry.
• Federal laws restrict business support, trademark protection, bankruptcy filing, hiring, tax deductions, and banking services for cannabis businesses.
• The tension between federal and state laws is evident in issues like trademark protection and banking services.
• Businesses in the industry often struggle with banking services, facing account closures and conducting most transactions in cash.

The Potential for Expansion and Growth in the Marijuana Industry

• Matt has a backlog of last year’s product waiting to be processed, indicating the potential for expansion and growth in the marijuana industry.
• There are states where growing weed outdoors is not feasible due to extreme weather conditions, making indoor cultivation the only option, despite being expensive.
• Matt is waiting for the rules to change to expand his business legally, feeling drained by the current limitations.

The Legal Workaround and Lawsuit Against Oregon

• Someone brings Matt an idea to change the rules using the Commerce Clause in the U.S. Constitution, offering a potential legal workaround for selling marijuana to other states.
• A lawyer named Andrew de Weas proposes a legal workaround to the tension between federal and state laws, finding a receptive audience in Matt, who agrees to be a plaintiff in a lawsuit against the state of Oregon.
• Matt’s involvement in the lawsuit against the state of Oregon could potentially lead to legal trouble, as marijuana is still illegal under federal law.
• The US Constitution’s Commerce Clause gives Congress the power to regulate interstate commerce.
• The dormant commerce clause limits states’ power to interfere with federal authority and restricts interstate commerce.
• A lawsuit was filed by Andrew and Matt, arguing that Oregon’s restrictions on interstate trade of marijuana violate the dormant commerce clause.
• If successful, this lawsuit could set a precedent for challenging state restrictions on the interstate trade of marijuana in other states.

Potential Expansion and Exportation of Marijuana

• Matt, who has a warehouse, is contemplating the potential expansion of his business to Nevada and beyond, even to global destinations like Amsterdam and Germany.
• The federal government’s approval is required to export marijuana due to the Commerce Clause giving Congress the power to regulate trade between states and foreign nations.

Summary

The Surplus and Financial Struggles of Marijuana Farmers

Matt Achoa and the reporter visit a marijuana farm in southern Oregon, where they learn about the surplus of marijuana in the state. With 8.8 million pounds grown for a population of just over four million people, there is an excess of marijuana in Oregon. This oversupply has led to a drastic drop in the price of marijuana, causing financial struggles for farmers. They are faced with the decision of whether it’s worth harvesting and processing their crop if there are not enough buyers.

The Unique Business Challenges in Oregon

Oregon’s surplus of marijuana cannot be sold across state lines due to federal law, creating unique business challenges. Matt Achoa believes the solution is to sell the surplus marijuana to people outside of the state. However, the legal restrictions pose significant obstacles to this idea.

Matt Achoa’s Journey from Illegal Trafficker to Legal Businessman

Matt Achoa shares his personal journey from being involved in illegal marijuana trafficking to becoming a legal businessman in Oregon. He had early exposure to marijuana through a neighbor named Butch, who sold weed at his high school. In his 20s, Matt realized he could make more money by trafficking marijuana across state lines, leading to a risky full-time job. However, he was eventually arrested in Michigan and served a federal prison sentence. After his time in prison, Matt changed his perspective on selling marijuana and transitioned to building, selling, and renting geodesic domes in Oregon as a legal businessman.

The Legal Challenges Faced by Cannabis Businesses

The federal government still considers marijuana illegal, which creates legal challenges for businesses in the industry. Federal laws restrict various aspects of business support, including trademark protection, bankruptcy filing, hiring, tax deductions, and banking services. The tension between federal and state laws is evident in issues like trademark protection and banking services. Many businesses in the industry struggle with banking services, facing account closures and conducting most transactions in cash.

The Potential for Expansion and Growth in the Marijuana Industry

Matt Achoa’s backlog of last year’s product waiting to be processed indicates the potential for expansion and growth in the marijuana industry. While there are states where growing weed outdoors is not feasible due to extreme weather conditions, indoor cultivation remains an expensive but viable option. Matt eagerly awaits changes in the rules to expand his business legally, as he feels drained by the current limitations.

The Legal Workaround and Lawsuit Against Oregon

Someone proposes a legal workaround to sell marijuana to other states using the Commerce Clause in the U.S. Constitution. Matt Achoa becomes a plaintiff in a lawsuit against the state of Oregon, arguing that its restrictions on interstate trade of marijuana violate the dormant commerce clause. This lawsuit could set a precedent for challenging similar state restrictions in other states and potentially benefit the marijuana industry. However, Matt’s involvement in the lawsuit poses the risk of legal trouble, given the federal illegality of marijuana.

Potential Expansion and Exportation of Marijuana

Matt contemplates expanding his business to Nevada and beyond, even considering global destinations like Amsterdam and Germany. However, exporting marijuana requires federal government approval due to the Commerce Clause granting Congress the power to regulate trade between states and foreign nations.

Conclusion

The episode highlights the challenges faced by marijuana farmers in Oregon due to the surplus of marijuana and legal restrictions on selling across state lines. Matt Achoa’s journey from illegal trafficker to legal businessman showcases the complexities of the cannabis industry. The lawsuit against the state of Oregon offers a potential legal workaround and the possibility of challenging state restrictions on interstate trade of marijuana. Overall, the episode sheds light on the evolving landscape of the marijuana industry and the ongoing tension between federal and state laws.