What is to be viewed as tainted money is the job for a nonprofit board to decide. Aside from the adage that "the only thing wrong with tainted money is there 'taint enough of it" if the source is from cannabis, the Federal Government and Banks appear to have their own opinion: donation from the sales of Marijuana is tainted.
In these times when donations are more challenging to procure (yes, this is a fact unless yours is one of the "haves" nonprofits, you know, like those who benefit from the revised tax law), most donations are valuable. Yes, if you are a drug rehab facility, you are probably in a more awkward position to take Sadler money but will that stop you if it comes from the courts versus directly from the coffers (an argument to be debated in many board rooms). The Sadlers alas, at least in the court of public opinion, appear to have been on the evil side of distributing drugs so their profits were truly tainted.
But Marijuana dispensaries, like liquor stores are on the legal side of distributing drugs (except with the Feds who have to learn how this went for alcohol). So as the article below notes in Massachusetts, it's hard for nonprofits to accept marijuana money if not for the Feds, then for the public face of it. Were I the Marijuana industry I think I would set up a foundation where all the money would go and then let that be the distributor. One solution but not one that addresses the public face issue where maybe receipt of "drug" money competes with a nonprofit's mission and value - what is really the meaning of tainted money. Soooo many challenges! But it's up to the boards. Let's hope they figure it out.
CommCan, which operates marijuana dispensaries in Millis and Southborough, is having difficulty finding nonprofits that will take charitable donations from the company because the money is tied to drugs.
MILLIS – During a 15-day period last month, CommCan earned more than $10,000 selling marijuana accessories. Ten percent of that – $1,466.41 – was to be donated to a local homeless shelter during a check-passing ceremony. But the day before the event was to occur, the shelter canceled.
“Initially when I got the call, I thought, ‘Oh, well if they don’t want a presentation that’s fine, I’ll just mail the check,’” said CommCan President Ellen Rosenfeld, after she was notified on Jan. 9. The shelter’s parent company not only did not want a discrete check presentation, it did not want CommCan’s donation.
CommCan, which operates a medical and recreational marijuana dispensary in Millis and a medical marijuana dispensary in Southborough, isn’t the only marijuana company in Massachusetts – or across the nation – to have its donations rejected due to its association with marijuana. Other businesses, such as Canna Provisions based out of Lee, have heard similar rejections.
″(Marijuana) is still not federally legal – that right off the bat describes the problem,” said Canna Provisions Chief Operating Officer Erik Williams.
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He said Canna Provisions has hit three major roadblocks when it comes to a charity or nonprofit not accepting a donation: fear of losing federal funding, uneasiness over bringing the issue to the organization’s board of directors, and nonprofits that offer services to children.
After one year in business, Canna Provision’s recreational dispensary in Lee donated about $75,000 to local nonprofits, on top of hundreds of hours of volunteerism, Williams said. Once all three of its dispensaries open, he said each will donate $50,000 annually, not including donations made outside of that pledge.
But finding nonprofits that will take the money is no small task.
When the company started choosing five local organizations it will give annual $10,000 donations to, all five they reached out to rejected the money, said Williams. In the decade the company has operated, he said “the biggest driver of people saying ‘no’ is that they accept federal funding.”
Despite marijuana being legal in Massachusetts since late 2016, there are over 100 towns and cities in the state that have banned it, said Rosenfeld. CommCan already had several of its donations declined by a couple local nonprofits since opening its dispensary in Millis in November.
Some say, “listen, this is what I have to abide by, it’s not my personal opinion,” she said, likening the legalization of marijuana to the legalization of gay marriage. Others do have personal opinions about it.
One organization is currently receiving steady donations from the company, but doesn’t want the publicity for receiving the money, said Rosenfeld.
“They don’t want a headline,” she said.
The fear of losing federal funding in particular is “the single biggest stopping point that (Canna Provisions) has encountered” when trying to donate, Williams said. Some nonprofits fear losing funding if they accept money from a business that sells or cultivates a federally illegal substance.
Members of nonprofit boards are hesitant to publicly discuss donation offers from marijuana companies – that makes some “a little more skittish” about accepting it, said Williams. And nonprofits that provide several services under one roof, especially programs for children, are likely to reject donations, he said.
Federal banking regulations are another hurdle, Rosenfeld said, because many banks will not allow a nonprofit to cash a check from a marijuana business, let alone allow a marijuana business to open a bank account, she said.
Rosenfeld knows this first hand. It took four months of negotiations with her bank’s president in order for her to be able to transfer funds from CommCan’s account to her personal account. She only knows a “handful” of banks in Massachusetts that will accept checks from marijuana businesses or donation checks to nonprofits from marijuana businesses.
“But the thing is we need to comply with the positive community impact,” said Rosenfeld, referring to a section in the Cannabis Control Commission’s application called “plan to positively impact areas of disproportionate impact.” The section refers to Massachusetts towns and cities that have been disproportionately affected by drugs, and looks to marijuana businesses to help “correct its history,” said Rosenfe
She described meeting that expectation “a grueling process.”
“When I went to submit my application for Millis, about the size of a Bible, it got kicked back because our positive impact plan wasn’t good enough,” she said.
Rosenfeld had to resubmit the application two more times before it was accepted.
In her effort to bolster her impact plan, Rosenfeld contacted one of the towns listed as being disproportionately affected by drugs, the woman she spoke to on the phone “was horrified.”
“Nobody wanted to take my money,” she said.
Meanwhile, Garden Remedies, which has three dispensaries, including one in Marlborough, has not experienced the same problem, said Jim Comber, director of marketing.
“No one has turned us down yet,” he said, adding the company has had “success with most local charities,” including the Greater Boston Food Bank, The New England Veteran’s Alliance and the MSPCA.
While CommCan has had success donating to local charities - such as Medway Community Farm, Baypath Humane Society, Timothy’s Toy Box and the Millis Ecumenical Food Pantry - Rosenfeld said it’ll take more than three years of legalization in Massachusetts to overcome the nationwide stigma extending over 80 years.
“Why does Massachusetts still have this problem?” asked Rosenfeld. “Because after 70 years of being pummeled with false information about marijuana, it’s going to take more than a year to get rid of that. It’s gonna take more normalization.”
Lauren Young writes about politics, social issues and covers the town of Franklin. Reach her at 315-766-6912 or [email protected]. Follow her on Twitter @laurenatmilford.
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