Is It Illegal To Sell Cannabis Seeds

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Buy Cannabis Seeds Online

Cannabis Banking Financial Network In response to an attorney inquiry, the DEA recently confirmed that seeds and other parts of the cannabis plant with less than 0.3 percent THC (the federal limit separating hemp and marijuana) have been legal since 2018’s Farm Bill ended federal hemp prohibition. Michael Moss wants to help other patients with his mail-order cannabis seed business. He says a legal loophole allows it.

Is It Illegal To Sell Cannabis Seeds

If cannabis flower is federally illegal because it contains Tetrahydrocannabinol (THC), are cannabis seeds legal because they don’t? It’s a fair question that many people have asked and, while the answer is “no” federally and “it depends” by state, there is an active legal cannabis seed trade occurring every day in the U.S. – and it is rapidly growing. While the legal questions evolve and new legislation surfaces in state capitols and Washington D.C., there is cash tied to the sale of cannabis seeds in need of banking.

Is it legal to sell cannabis seeds?

Cannabis seeds are illegal to sell across state lines due to the ongoing federal prohibition against cannabis and cannabis products. However, depending on state law, consumers may be able to purchase cannabis seeds legally from a breeder, dispensary, or other cannabis business – even if they don’t have a license to sell cannabis products that contain THC.

Cannabis seeds find themselves in a legal grey area because they don’t contain any THC – when a cannabis product contains 0.3% THC content or less, it is considered legal since the signing of the 2018 Farm Bill. However, they remain federally illegal to buy and sell. In states where cannabis is legal, cannabis seeds could sometimes be bought and sold within state borders by licensed businesses only, depending on state law. State laws governing the sale of cannabis seeds can vary from state to state.

Can retailers who sell cannabis seeds get a bank account?

For THC licensees who also sell cannabis seeds, banking is available as it would be for other activities that fall under the scope of that license. In other words, a dispensary would have little trouble adding cannabis seeds to their inventory if they already worked with a cannabis-friendly bank.

However, unlike THC licensees, there is not a clear federal regulatory framework on how to bank money derived from state-compliant cannabis seeds sales from non-THC licensed operators. As a result, this sector of the legal cannabis industry comes with a great deal of uncertainty and risk, every banker’s least favorite combination.

So, for example, a garden shop stocks all types of seeds, including cannabis seeds, which become a substantial portion of the shop’s business. Unlike a licensed dispensary, this garden shop does not deal in other cannabis products, and yet cannabis seeds remain a significant percentage of overall revenue. The regulations that bank examiners use for THC licensees doesn’t necessarily apply to the garden shop and so many bankers remain uncertain how to approach this type of situation (and therefore tend to avoid it).

In this way, cannabis seeds are more like CBD products or Delta-8-THC: largely unregulated from a banking perspective.

The difference between CBD banking and cannabis seeds banking, though, is that while the U.S. cannabis seeds market is expected to eclipse $1.5 billion in total value by 2027, the American CBD industry already drives more than that in sales each year. More niche sectors of the industry like the cannabis seed trade and Delta-8 THC distillates face an even steeper uphill battle in securing compliant banking and merchant processing services than CBD businesses.

That’s not to say banking isn’t available for these sectors. However, bankers generally tend to be less informed about cannabis seeds than THC licensees or even CBD businesses. At any time, a bank could take a closer look at sectors like cannabis seeds or Delta-8-THC and decide the uncertainty is too great and the business opportunity too small (relative to broader markets like CBD) to take the risk – at any time, a bank could choose to terminate these accounts and suspend merchant processing services.

Cannabis seeds businesses might be legal in your state but remain federally illegal – and without a THC license, it’s not exactly clear to bankers how to compliantly manage your account. However, unlike THC licensees, federal bank examiners have produced no real guidance on how to bank profits earned through the purchase and sale of cannabis seeds. While THC licensees handle a federally illegal product, bankers have guidance, and therefore more certainty, on how to bank them in a compliant manner. There is no such assurance when it comes to cannabis seeds businesses.

This has led many cannabis seeds businesses to mischaracterize their operations to their bank, posing as an agricultural company under some obscure name and withholding information about cannabis-related operations. Not only does this carry significant business consequences, it appears that law enforcement is cracking down on fraud in cannabis banking and payment processing. This approach is not only obsolete but puts your business at a competitive disadvantage. Yesterday was the best time to transition to transparent, compliant cannabis banking, but right now is the second-best time.

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How to find a stable banking relationship for cannabis seeds businesses

Cannabis entrepreneurs know few things are certain and those that are won’t be for long. The same is true for cannabis banking, but you can take certain steps to improve your chances of finding, retaining, and maintaining a stable relationship with your bank.

The first and most important step is to identify a cannabis-friendly bank and approach them in full transparency. That can be easier said than done. Many cannabis-friendly banks don’t openly advertise the fact that they work closely with the industry. Even if they embrace the industry and the business opportunities that come along with it, many remain cautious about the optics of being associated with a federally illegal product.

That’s where banking networks like Fincann come in. We’ve been doing the hard work in the trenches for years, forging relationships with financial institutions that are ready and willing to work with the legal cannabis industry, including cannabis seeds businesses. As of April 2021, Fincann’s Cannabis Banking Financial Network™ offers compliant cannabis banking and merchant processing services for every sector of the industry in all 50 states.

What banking services are available to cannabis seeds businesses?

Once you and your new bank have been introduced, including a full review of business operations and financials, you’ll know you have a banking partner that understands and supports your business. And, if you’re in need of merchant processing services, there are several legitimate, compliant options available to all sectors of the cannabis industry: merchant processing accounts, “PayPal-style” e-wallets, closed-loop and loyalty cards, high-profit ATMs, and ACH-based apps and transfers.

Merchant processing accounts support in-person debit transactions, allowing customers to make cannabis purchases using their checking account and PIN number. ACH transfers support an online payment functionality for e-commerce stores. Customers simply input their routing and account number and confirm their payment to checkout online. Both methods are 100% legally compliant and transparent with the facilitating bank.

Cannabis banking made better with Fincann

There is no longer any need for a business in any state or sector of the legal cannabis industry to lie to their bank or use illegal payment processing workarounds. With banking networks like Fincann and payment processing solutions like merchant processing accounts and online ACH transfers, cannabis businesses have effective, legal, and straightforward options. The future of the cannabis industry is legal and transparent; don’t fall behind, call Fincann and transition to better cannabis banking today.

Ask a Stoner: Buying Weed Seeds Is Legal Now?

Dear Stoner: I read a headline that the DEA had just now legalized weed seeds, but I’ve been ordering them to my house in the Springs for almost a decade. Have I been breaking federal drug laws this whole time?
Mike

Dear Mike: Short answer: Yes. But you can breath easy now, thanks to hemp.

I technically break federal drug laws almost every day after work and pretty much every weekend. We all do if we smoke, grow or possess cannabis, even in states that have legalized the plant. Federal pot laws had prohibited seeds, too, but prosecuting online seed banks in legal states or other countries was low on the Drug Enforcement Administration’s to-do list. Now that hemp is legal at the federal level, that federal priority has been crossed off entirely.

In response to an attorney inquiry, the DEA recently confirmed that seeds and other parts of the cannabis plant with less than 0.3 percent THC (the federal limit separating hemp and marijuana) have been legal since 2018’s Farm Bill ended federal hemp prohibition. Hemp and marijuana are the same plant with different THC amounts in their blooming flowers, but neither hemp nor marijuana seeds exceed the 0.3 percent THC limit, so there’s virtually no legal difference in them at such an early stage. The DEA also confirmed that it would have nailed you had you been caught before hemp was legalized and that the resulting plants from said seeds are still quite illegal, so count your blessings.

KEEP WESTWORD FREE. Since we started Westword, it has been defined as the free, independent voice of Denver, and we’d like to keep it that way. With local media under siege, it’s more important than ever for us to rally support behind funding our local journalism. You can help by participating in our “I Support” program, allowing us to keep offering readers access to our incisive coverage of local news, food and culture with no paywalls.

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Pipe Dream? Arizona Man Believes Legal Loophole Lets Him Sell Pot Seeds

Michael Moss was a welder until degenerative disc disease forced him into an early retirement. In 2011, he moved to Arizona for the climate, landing in the small Navajo County city of Show Low.

What followed was a series of surgeries that sandwiched the broken vertebrae in the middle of his spine between 24 screws in his neck and six lag bolts in his lower back.

When the heavy, opioid-based painkillers doctors prescribed him left him emaciated and like a “zombie,” he turned to medical marijuana. But the high-potency medicine he needed cost as much as $400 a week. That was unaffordable on disability pay, so he started growing his own.

After a bad experience buying seeds, Moss decided to start selling them himself to offer a better alternative. These days, the 48-year-old entrepreneur is bringing in an estimated $1,000 a month by selling seeds openly on the internet.

“I’m just trying to help people. No one was there to help me,” Moss told Phoenix New Times.

The business is not illegal because the seeds are marketed as “souvenirs,” he said, according to advice he received from an attorney with a prepaid legal service.

However, postal authorities say there is no such loophole, and that Moss could face serious repercussions.

The Business

Moss is one of the few U.S.-based cannabis seed vendors and offers what he said is the largest seed collection in Arizona. He has 100 different strains he sells through his website and hopes to have added an additional 100 by next year. Among the payment options accepted: Venmo, Facebook Pay, a Walmart wire transfer and mailed checks. Most of his earnings go back into the business, he said.

While a growing number of states, including Arizona, have legalized recreational or medical marijuana, transporting marijuana products across state borders is a federal offense. Members of Arizona’s cannabis industry joke that the seeds to start state-approved grow ops blew across the border from California in the wind.

Moss openly admits to mailing seeds across state borders. He buys seeds from growers in Washington, California, Oklahoma, and Michigan. People in Oklahoma made up his biggest customer base for a while. While there are “seed banks” in Europe, purchasers carry the risk of having their seeds intercepted by customs officials if not properly disguised. Seeds shipped within the United States don’t have that problem.

After consulting with lawyers at LegalShield, a prepaid legal insurance service, Moss said he believes what he is doing is legal as long as the seeds are sold as souvenirs or collectors items to people over the age of 21. His website and pop-up stores carry disclaimers saying as much.

“Once they leave me, it’s up to [buyers] to abide by their state laws,” Moss said, acknowledging that he will help offer general advice about cultivating cannabis to anyone who calls.

Not only is Moss operating in the open, but his Venmo feed is public, showing the names of purchasers and their order numbers. Discretion isn’t in the business plan: He used some of his savings to get a car decorated with weed decals and the name of his business, MossMSeeds. Soon, he’s going to add neon lighting to the ride and a smoke machine. He gave an interview to the White Mountain Independent for an article about his business last month, and Moss comes to the Valley on weekends for events and podcast interviews.

“I’m a handicapped, disabled guy trying to keep myself well and it’s just a plant,” he said. “The wheelchair is coming. That’s why I’m trying to make a mark.”

Legal Issues

Plant or not, federal authorities don’t take kindly to distributing pot seeds in the mail.

Liz Davis, a spokesperson for the Phoenix division of the U.S. Postal Inspection Service, said that while marijuana is legal in some states, it’s federally illegal under the Controlled Substances Act and cannabis seeds are therefore illegal to mail. The inspection service aggressively pursues people who traffic in all forms of illegal narcotics, she said.

“Honestly, as Postal Inspectors, we don’t really care what someone purports to be selling. If it is illegal to mail, it is illegal to mail,” Davis wrote in an email. “Our mission as inspectors is to ensure the mail is safe for our employees and our customers. Whether stated as a souvenir or having an agricultural purpose, it is still a controlled substance and therefore nonmailable. USPS Letter Carriers have been killed delivering parcels containing controlled substances. If it is a nonmailable item, we do not want it in the mail.”

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Davis added that if New Times shared Moss’ name and contact information, they would investigate further. New Times declined her offer. But Moss isn’t hiding.

Phoenix cannabis attorney Tom Dean said Moss is facing serious legal jeopardy.

“My advice to him is not to do it,” said Dean, a former legal director for the National Organization for the Reform of Marijuana Laws (NORML) who has practiced cannabis law for over 20 years. Even if someone has a “clever” defense, most don’t get a chance to use it because that would require going to trial and facing mandatory prison time if it doesn’t work. Instead, they take a plea deal. In this case, “there’s no grey area,” Dean said.

When New Times asked Moss about what Dean said, he cited a different website selling seeds that claims marijuana seeds are legal in Arizona since they don’t contain THC or CBD. He also pointed out that he had obtained a license from the state to sell agricultural seeds at his lawyer’s advice.

That’s no good, according to Dean. For one, un-sterilized seeds are explicitly considered marijuana for the purposes of Arizona and federal law, meaning that selling them within Arizona requires a license. Even if selling seeds was legal in Arizona, transporting them between states and in the mail is a federal offense.

“The seed dealer’s license doesn’t mean he can sell illegal drugs,” Dean said.

It’s unclear how much emphasis federal or state authorities may put on cracking down on people like Moss, Dean said. But based on how they’ve handled medical marijuana, local law enforcement may face pressure from the cannabis industry to crack down on unlicensed growers and avoid a free-for-all. People who buy from Moss are unlikely to face prosecution, but it’s not out of the question.

“Good intentions are not a defense. Being mistaken is not a defense. And law enforcement could care less about that kind of thing,” he said.

Disclaimer

While Moss is small-time compared to some other online seed vendors, the federal government has cracked down hard on similar businesses in the past.

In 2005, Western District of Washington U.S. Attorney Jenny Durkan, now mayor of Seattle, had the head of the British Columbia Marijuana Party extradited to the United States on charges of selling marijuana seeds to Americans through the mail. Marc Emery claimed to be making $3 million a year from the sales and was eventually sentenced to five years in prison.

David Williams, the general counsel for the law firm Davis Miles McGuire Gardner, PLLC, which provided Moss his advice through LegalShield, said he could not comment or acknowledge whether Moss was a client of the firm due to attorney-client confidentially. In an email sent to Moss, and shared with New Times, he said they provided him limited advice but do not comment on their work to the media.

Despite Dean’s warning, Moss said on Wednesday he plans to continue his business based on the advice he says he got from the LegalShield attorney and what he’s read online.

“It is kind of concerning, but at the same time I’m going to keep doing what I got to do,” he said. “If they want to pick on a disabled guy over a plant … I’m a disabled guy who doesn’t want to be on pain meds and this is what helps me.”

“I bet he never Googled it,” he added of Dean.

In an interview the next day, Moss told New Times he had Googled local cannabis attorneys, calling as many as he could. He spoke to one on Thursday morning who told him he was at some risk but that the lawyer’s “gut feeling” was that authorities wouldn’t come after him. That made Moss feel better. At the attorney’s recommendation, he’s going to start including the disclaimer from his website in each package.

“I feel a lot safer at this point,” Moss said.

KEEP PHOENIX NEW TIMES FREE. Since we started Phoenix New Times, it has been defined as the free, independent voice of Phoenix, and we’d like to keep it that way. With local media under siege, it’s more important than ever for us to rally support behind funding our local journalism. You can help by participating in our “I Support” program, allowing us to keep offering readers access to our incisive coverage of local news, food and culture with no paywalls.

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