PNC Bank will close the bank accounts of the Marijuana Policy Project (MPP) on July 7, citing the risk of the bank faces from the hard-line U.S. Attorney General Jeff Sessions has adopted for enforcing federal drug laws as they apply to cannabis. The MPP, an advocacy group that lobbies for decriminalization of marijuana, opened the accounts in 1995.

Until now, U.S. banks have refused to open accounts for marijuana businesses involved only in growing and distributing marijuana. But when the Attorney General in May ordered federal prosecutors to seek maximum penalties for violations of federal law, PNC re-evaluated its decision to maintain accounts for marijuana-related groups that do not directly touch the plant.

MPP’s chief operating officer told The Washington Post that a PNC official told him in May of the July 7 closure, after an audit of the bank’s accounts “revealed that [MPP] received funding from marijuana businesses that handle the plant directly.” The bank said that it could not take the risk associated with the new push to enforce more strictly existing federal law. In essence, banks accepting deposits from marijuana-related businesses could be prosecuted for money laundering.

A handful of local and regional banks in states where marijuana is legal have offered banking services to marijuana business, but PNC, a $57 billion financial services giant, is unwilling to continue solely on the basis of the Obama-era Cole Memorandum that instructed federal agencies not to spend money enforcing federal law in states that have legalized medical or recreational marijuana.

Canada Ponders an Unusual Drug Problem: a Shortage of Marijuana
The biggest challenge for Justin Trudeau’s forthcoming legal recreational marijuana market is a shortage of pot, the finance minister of Canada’s most-populous province says.

Ontario’s Charles Sousa said a supply crunch was discussed during a meeting with provincial and federal counterparts this week. Canada is aiming to legalize recreational pot in the next 12 months, the first major economy to do so. One analyst said he’s concerned the government could use a supply shortage as an excuse to delay rolling out the program.

































“Ultimately the biggest problem that appears after today’s discussion is one of supply,” Sousa said in an interview this week. Finance ministers were told demand is “quite high” for marijuana already in Canada, he said. “So we want to make certain that, when we do proceed, there is sufficient supply to accommodate the activity because what we’re trying to do is curb the illicit use and organized crime that now exists around it.”


Legalizing Recreational Marijuana Is Linked to Increased Crashes
Legalizing recreational marijuana use in Colorado, Oregon and Washington has resulted in collision claim frequencies that are about 3 percent higher overall than would have been expected without legalization, a new Highway Loss Data Institute (HLDI) analysis shows. This is HLDI’s first look at how the legalization of marijuana since 2014 has affected crashes reported to insurers.

More drivers admit to using marijuana, and it is showing up more frequently among people involved in crashes. Though there is evidence from simulator and on-road studies that marijuana can degrade some aspects of driving performance, researchers haven’t been able to definitively connect marijuana use with more frequent real-world crashes. Some studies have found that using the drug could more than double crash risk, while others, including a large-scale federal case-control study, have failed to find a link between marijuana use and crashes …. Studies on the effects of legalizing marijuana for medical use also have been inconclusive.

…The combined-state analysis shows that the first three states to legalize recreational marijuana have experienced more crashes,” says Matt Moore, senior vice president of HLDI. “The individual state analyses suggest that the size of the effect varies by state.”
Colorado saw the biggest estimated increase in claim frequency compared with its control states. After retail marijuana sales began in Colorado, the increase in collision claim frequency was 14 percent higher than in nearby Nebraska, Utah and Wyoming. Washington’s estimated increase in claim frequency was 6.2 percent higher than in Montana and Idaho, and Oregon’s estimated increase in claim frequency was 4.5 percent higher than in Idaho, Montana and Nevada.

High Hopes Ride on Marijuana Amid Opioid Crisis
A handful of drugmakers are taking their first steps toward developing marijuana-based painkillers, alternatives to opioids that have led to widespread abuse and caused the U.S. health regulator to ask for a withdrawal of a popular drug this month.
The cannabis plant has been used for decades to manage pain and there are increasingly sophisticated marijuana products available across 29 U.S. states, as well as in the District of Columbia, where medical marijuana is legal.There are no U.S. Food and Drug Administration (FDA)-approved painkillers derived from marijuana, but companies such as Axim Biotechnologies Inc, Nemus Bioscience Inc and Intec Pharma Ltd have drugs in various stages of development.

The companies are targeting the more than 100 million Americans who suffer from chronic pain, and are dependent on opioid painkillers such as Vicodin, or addicted to street opiates including heroin.Opioid overdose, which claimed celebrities including Prince and Heath Ledger as victims, contributed to more than 33,000 deaths in 2015, according to the Centers for Disease Control and Prevention.
Mexico Just Legalized Medical Marijuana
Mexican President Enrique Peña Nieto signed a decree this week legalizing medical marijuana. The measure also classified the psychoactive ingredient in the drug as “therapeutic.”

The new policy isn’t exactly opening the door for medical marijuana dispensaries on every corner.

Instead it calls on the Ministry of Health to draft and implement regulations and public policies regulating “the medicinal use of pharmacological derivatives of cannabis sativa, indica and Americana or marijuana, including tetrahydrocannabinol.” It also tasks the ministry with developing a research program to study the drug’s impact before creating broader policies.

The measure had broad support from Mexico’s Senate and Lower House of Congress, where it passed 347-7 in April.

JUNE NEWSLETTER 2

The number of complaints filed against airlines rose 70% in April, compared with the same month of last year. This may be due to passenger injuries, a passenger being dragged off a United Continental Holdings Inc. (NYSE: UAL), and other very visible incidents that make the industry look cruel and calculating. However, none of this has hurt airline stock prices in the past year. The stocks of large carriers are up 50% to 80%. Why? Mostly low fuel costs and rising seat demand. Investors view bad PR as a small blip on the radar.

The number of complaints filed with the Department of Transportation is actually quite small. Those that involved airlines only reached 1,430. Most of these were for delayed flights or many that were cancelled. Brutalizing passengers did not make the top tier of reports, or come even close.In the past year, shares of American Airlines Group Inc. (NYSE: AAL) are up 69%. Shares of United Continental are up 81%. And shares of Southwest Airlines Co. (NYSE: LUV) are up 51%. The S&P 500 is higher by 17% over the same period.American’s results are a good proxy for the industry. According to the airline:

American Airlines Group’s total revenue passenger miles (RPMs) were a record 19.9 billion, up 2.6 percent versus May 2016. Total capacity was 24.3 billion available seat miles (ASMs), up 2.3 percent versus May 2016. Total passenger load factor was 82.1 percent, up 0.2 percentage points versus May 2016.The Company continues to expect its second quarter 2017 total revenue per available seat mile (TRASM) to be up approximately 3.5 percent to 5.5 percent year-over-year. In addition, the Company continues to expect its second quarter pre-tax margin excluding special items to be between 12 percent and 14 percent.

The U.S. Energy Information Administration reported in February:

Lower crude oil prices in recent years have translated to lower fuel costs and overall lower operating expenses for U.S. passenger airlines. According to the U.S. Department of Transportation’s Bureau of Transportation Statistics (BTS), U.S. passenger airlines’ collective net profit increased to $25.6 billion in 2015, up from $7.5 billion in 2014. Much of that increase is attributed to lower expenditures for kerosene-based aviation fuels, which fell by $16.5 billion from 2014 to 2015. Jet fuel spot prices remained favorable for airlines in 2016, averaging $1.25 per gallon, compared to an average of $1.53 per gallon in 2015, well below the average of $2.92 per gallon over the 2011–14 period.
Because of low crude prices, the trend almost certainly has persisted.

Complaints make headlines. Passengers and fuel costs make money.

​NEWS ROUND UP

Blue Apron, which makes and delivers premium meal kits, will go public. The price range of the IPO has dropped. Many blame Amazon.com Inc.’s (NASDAQ: AMZN) move further into the grocery business for the pessimism.All 34 major U.S. financial companies put through stress tests by the Federal Reserve passed. The tests are meant to see what would happen in a new recession or deep financial crisis. One by-product of the success is that banks can start to offer higher dividends.

Office supply company Staples Inc. (NASDAQ: SPLS) has been sold to Sycamore Partners for $6.9 billion. The firm has struggled through a series of M&A deals and unsuccessful attempts and threats from e-commerce leaders.

Consulting firm PwC issued a report that said artificial intelligence will add $15.7 trillion to the global economy by 2030. A Bloomberg story about the study explained:Gains would be split between $6.6 trillion from increased productivity as businesses automate processes and augment their labor forces with new AI technology, and $9.1 trillion from consumption side-effects as shoppers snap up personalized and higher-quality goods, according to the report.

July 11 will be this year’s Amazon Prime Day. According to the company, the sale period will run 30 hours, which will begin at 9 p.m. on the 10th. Amazon announced:

The third annual Prime Day will be Tuesday, July 11, with hundreds of thousands of deals exclusively for Prime members around the world. New this year, members can enjoy 30 hours of deal shopping starting at 6pm PT/9pm ET on Monday, July 10 – and new deals as often as every five minutes. Prime Day has expanded to 13 countries this year, and Amazon is bringing new and existing members in the U.S., U.K., Spain, Mexico, Japan, Italy, India, Germany, France, China, Canada, Belgium and Austria the best deals of the year. Members will find millions of items in stock, including deals from thousands of small businesses and entrepreneurs.

People will need to sign up for Amazon Prime to participate. The program is the company’s wildly successful membership club, which provides free shipping, special deals on merchandise and Amazon’s streaming video service. Prime costs members $99 a year.

A ransomware computer virus continues to hit companies around the world. According to Reuters:

A computer virus wreaked havoc on firms around the globe on Wednesday as it spread to more than 60 countries, disrupting ports from Mumbai to Los Angeles and halting work at a chocolate factory in Australia.

Risk-modeling firm Cyence said economic losses from this week’s attack and one last month from a virus dubbed WannaCry would likely total $8 billion. That estimate highlights the steep tolls businesses around the globe face from growth in cyber attacks that knock critical computer networks offline.




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