June 23, 2024
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Binghamton University alum advocates for cannabis companies

Kaufman sees future for cannabis industry

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With more than three decades practicing corporate and securities law, Neil Kaufman ’81 found a niche representing cannabis companies. Why cannabis? Cue up the punch line of the old joke about robbing banks; it’s where the money is. The industry is smoking hot. Pun intended.

“The state-legal cannabis industry has grown to over $6 billion. It has potential to grow to $50 billion within the next 10 years. This is the biggest growth industry since the 1990s tech boom,” says Kaufman, managing member of Kaufman & Associates LLC.

Kaufman helps cannabis companies navigate minefields unique to their industry. Want to open a bank account or get financing? Start by trying “wellness” instead of “marijuana” in your company’s name. Want to take credit card payments? Cash is king, or tolerate higher-cost foreign processors, as U.S. credit card companies don’t want a piece of this pie.

Federal illegality, he says, imposes high hurdles. Ordinary business expenses are considered nondeductible costs of drug trafficking, so cannabis companies must pay income tax on their full revenues. Clearly, Uncle Sam isn’t thinking “wellness.”

Existing drug-approval policies don’t fit because cannabis has more than 400 chemicals, and no single formulation could be put through a normal approval process. Instead, cannabis needs special treatment.

“I hope and believe that Congress will enact a statute specifically designed for cannabis — as it did for dietary supplements and tobacco — enabling the industry to generate enormous tax revenue,” he says.

Medicinal and adult-use cannabis have many benefits, Kaufman says, such as alleviating seizures, glaucoma, digestive problems, anxiety disorders and even chronic pain. Instead of misplaced concern about marijuana being a “gateway” drug, researchers are finding that cannabis helps opioid addicts.

“If you get injured, you get a prescription for opioids. When it runs out, and you can’t get another, so many Americans hit the black market, leading to abuse and overdose. If, instead, you can get relief from medical cannabis, the addiction can be avoided. Or if you get addicted, medical cannabis seems to help avoid relapses. We’ve seen a 25 percent reduction in opioid overdose deaths where cannabis is legally available. That’s huge for a country going through an opioid crisis. How can any rational person ignore that?”

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