The attorneys general of 21 states sent a letter to congressional leaders on Monday, voicing support for a bipartisan bill that would shield state-legal marijuana programs from federal interference.
Led by Washington, D.C. Attorney General Karl Racine, along with the top law enforcement officials in New York and Nevada, the letter emphasizes that the Strengthening the Tenth Amendment Through Entrusting States (STATES) Act would enable cannabis businesses to access financial services, increasing transparency and mitigating risks associated with operating on a largely cash-only basis.
Passing the STATES Act would “lift the cloud of regulatory uncertainty that hangs over legitimate businesses operating in most states in the union and in several territories” and, thereby, “reduce the industry’s reliance on cash, bring greater clarity to the industry, prevent crime by limiting opportunities for potentially violent robberies and thefts, and ensure that each state has the freedom to determine policy in this area,” the state officials wrote.
Current federal law prevents banks from providing services legal #cannabis businesses—an industry expected to generate revenue between $50-$80 billion over the next 10 years.
Forcing these businesses to operate only in cash leaves communities vulnerable to violence and crime.
— AG Karl A. Racine (@AGKarlRacine) September 23, 2019
Attorneys general from Alaska, California, Colorado, Connecticut, Illinois, Iowa, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Mexico, Oregon, Pennsylvania, Rhode Island, Vermont and Washington also signed the letter.
“Forcing legal cannabis businesses to operate only in cash leaves communities vulnerable to violence and crime,” Racine said in a press release. “Our bipartisan coalition is urging Congress to pass the STATES Act because it would allow those in the legal cannabis industry to access the U.S. banking system, provide long-overdue transparency and accountability, and deter criminal activity like robbery and money laundering.”
New York Attorney General Letitia James said that “as the marketplace for legal cannabis-related business evolves, federal regulations governing the banking system must keep pace.”
“It’s not only commonsense to fold a growing multi-billion-dollar industry under the regulated banking sector, but it’s also a matter of public safety. With such widespread, bipartisan support, there is no reason this bill shouldn’t pass without delay,” she said.
In a tweet, Nevada Attorney General Aaron Ford said that “each state knows its industry and needs best, and that’s why we’re urging Congress to pass legislation that will allow NV and other states to determine the best approach for regulating cannabis.”
Each state knows its industry and needs best, and that's why we're urging Congress to pass legislation that will allow NV and other states to determine the best approach for regulating cannabis.
— Aaron D. Ford (@AaronDFordNV) September 23, 2019
California Attorney General Becerra said in a press release that “it’s time for our federal laws relating to cannabis to enter the 21st century.”
“A large majority of states have now legalized the use of marijuana in some form. But federal inaction has accelerated concerns about public safety, uncertainty and disruptions to licensed businesses, and ultimately the respect for states’ rights,” he said. “The STATES Act is a promising step in the right direction that would safeguard licensed businesses that play by the rules in what has become a more than $8 billion industry.”
Despite the focus on banking in the letter, the intent of the STATES Act isn’t exclusively about providing marijuana businesses with access to financial services. That represents one potential benefit for the industry, but the bill is generally about offering states broader protections so they can establish their own cannabis systems without fear of reprisal from the Justice Department.
A separate piece of legislation—the Secure and Fair Enforcement (SAFE) Banking Act—is narrowly tailored to freeing up banks to work with marijuana firms. Racine and 37 other attorneys general wrote a letter supporting that bill in May, and it is now heading to the House floor for a vote on Wednesday.
“Ultimately, legislation like the proposed STATES Act recognizes the reality on the ground: across the country, state governments, America’s ‘laboratories of democracy,’ have been working toward those cannabis policies that work best for them,” the new letter states. “Against this backdrop, the [Controlled Substance Act’s] outdated restrictions imperil states’ rights, and in the process, impose serious regulatory and public safety consequences.”
“As law enforcement officers and as lawyers representing our states and territories, we believe the time has come to do better. We urge the adoption of legislation like the proposed STATES Act,” the officials said.
Read the full STATES Act letter from attorneys general below:
This story was update to include comment from James and Ford.
Photo courtesy of Nicholas C. Morton.
Michigan Prosecutor Won’t Pursue Psychedelics Possession Cases Following Local Decriminalization Vote
A soon-to-be county prosecutor in Michigan said his office will not be pursuing psychedelics possession cases following a City Council vote to decriminalize entheogenic substances in Ann Arbor.
Eli Savit, who won in a three-way Democratic primary for Washtenaw County prosecutor last month and is running unopposed in the general election, said in a statement to the advocacy group Decriminalize Nature Ann Arbor that he supports the measure and will extend the policy county-wide, rather than just at the city level.
“I support the decriminalization of entheogenic plants. I believe the War on Drugs has been an abject failure, and I see no reason to criminalize—or prosecute—people for their use of such plants,” he said. “That was my position before the Ann Arbor City Council resolution, and it’s true with even greater force afterwards.”
The official, who campaigned on a pro-reform platform, said that drug criminalization has “created a cruel roulette wheel of sorts” and “it’s a weighted wheel, as the data clearly shows that Black people and people of color are far more likely to face criminal consequences related to drug use than white people.”
“The Ann Arbor City Council resolution of course applies only in Ann Arbor,” he said. “But, consistent with the resolution, I do not plan to prosecute the use or possession of entheogenic plants in any other part of the county.”
The unanimous City Council vote earlier this month made Ann Arbor the third city in the U.S. to make it so enforcement of laws against a wide range of psychedelics such as psilocybin, ibogaine and ayahuasca are among the lowest police priorities. Oakland was the first to do so, followed by Santa Cruz. Washington, D.C. could be next, as activists successfully placed the issue on the November ballot.
The broader reform movement kicked off in earnest shortly after Denver voters approved a measure last year focused on decriminalizing psilocybin.
Savit’s support for the Ann Arbor policy change stands out as an example of how the messaging behind these local reforms can have an impact beyond the individual jurisdiction it directly applies to.
“While we were not surprised, we were absolutely thrilled to find out that Eli Savit supports the DNA2 resolution! This left us feeling very hopeful for the future of our county,” Julie Barron, chair of Decriminalize Nature Ann Arbor, told Marijuana Moment. “Mr. Savit spoke extensively during his campaign about ending the war on drugs. It is great to know that he will continue this promise to the county with an action plan not to prosecute the possession and use of entheogenic plants/fungi.”
“We have a strong drug reform advocate here, and we cannot wait for him to take his position of Washtenaw County Prosecutor,” she said.
Several other prosecutors have similarly enacted policy changes to avoid low-level marijuana cases. For example, the top cop in Fairfax County, Virginia said in January that he “directed my office to dismiss prosecutions of adults for simple possession of marijuana.”
The top prosecutor in Baltimore is proactively closing warrants and dismissing hundreds of cases for certain offenses, including simple drug possession, that her office is no longer pursuing amid the coronavirus pandemic.
Montana Marijuana Legalization Initiative Endorsed By Environmental Conservation Groups
Montana activists behind a marijuana legalization initiative are being backed by a uniquely “Big Sky Country” coalition: environmental conservation groups.
The state—widely known for its public lands and parks that attract tourists from across the country—would see a significant influx of revenue for environmental conservation programs from cannabis taxes if the legalization measure passes in November. Half of the public revenue from marijuana sales would be earmarked for such purposes.
Organized by the legalization campaign New Approach Montana, a new Public Lands Coalition (PLC) is comprised of four conservation organizations, including the Montana Conservation Voters and Montana Wildlife Federation.
“All Montanans share the values of open space, as Montanans we collectively own and steward some of the most special places on earth. We are in fact, the Last Best Place, and that’s a central part of our identity as Montanans,” Pepper Petersen, political director for New Approach Montana, told Marijuana Moment.
“The allocations in I-190 reflect our values as Montanans and you see that in the initiative,” he said. “Montanans know that marijuana revenue should be invested wisely, and our public lands in Montana are a great investment.”
The group said in an op-ed published in The Missoulian newspaper on Sunday that there is currently $60 million in “unmet conservation needs in Montana” for services such as “funding for landowners who want to offer access for hunting and fishing.” Legalizing cannabis could help fill that gap, the coalition said.
“In order to continue to offer Montanans and our millions of guests an experience worth coming back for, we need to invest in our public lands,” PLC, which also includes Wild Montana Action Fund and the Trust for Public Land, wrote. “A vote for 118 and 190 is a vote to maintain and create trails, protect land for wildlife, and fund our state parks.”
The new coalition’s website says that legalization “would provide more than $18 million per year to benefit our public lands; both maintaining current access and opening up new opportunities for recreation.”
“These additional funds would help to address the state’s backlog of repairs to campgrounds, trails, wildlife habitat, opening access and increasing maintenance on our public lands,” the groups said.
Interestingly, the campaign is also making the case that legalizing federally illegal cannabis on the state level will help open up access to additional federal funding.
“The Land and Water Conservation fund is the largest piece of federal funding for our public lands. Now that the LWCF is fully and permanently funded, there are $900 million federal dollars per year that can be leveraged with matching state resources,” the coalition website says. “Tax revenue from I-190 could allow Montana to access more of this funding through matched federal grants. Montana should take every opportunity to use this money, and I-190 represents a golden opportunity to do so.”
There will be two separate marijuana measures on the state’s November ballot.
One initiative, a statutory change, would create a system of legal cannabis access for adult-use. A separate constitutional amendment would ensure only those 21 and older can participate in the market.
If the statutory measure is approved by voters, possessing up to an ounce of cannabis would be allowed, and people could cultivate up to four plants and four seedlings at home.
The Montana Department of Revenue would be in charge of regulating the legal industry and would issue business licenses by January 1, 2022. Existing medical cannabis businesses would be first in line to enter the adult-use market.
There would be a 20 percent sales tax on recreational marijuana, while the tax on medical cannabis products would be reduced from two to one percent. Besides public land funding, those tax dollars would also go toward veteran services, substance misuse treatment, health care, local governments that allow cannabis businesses and the state general fund.
“We are excited to have the support of our neighbors and friends from the PLC,” Petersen said. “Countless Montanans will continue to enjoy this special place because of the funding I-190 is creating and because of the hard work of the folks like those who make up the Public Lands Coalition who believe and invest in Montana’s public lands and waters.”
Montana voters approved a medical cannabis legalization initiative in 2004 and later passed a 2016 expansion measure.
For the current cycle, New Approach Montana submitted their petitions for the cannabis initiatives in June. That came after they initially suspended signature gathering activities amidst the coronavirus pandemic, which they later relaunched with social distancing measures in place.
In July, the group announced that data from county officials indicated they would make the ballot. And in August, state officials officially qualified the measures.
The Montana Democratic Party adopted a platform plank endorsing marijuana legalization in June.
Photo courtesy of Chris Wallis // Side Pocket Images.
House Democrats Keep Marijuana Banking Protections In Revised COVID Bill After Delaying Legalization Vote
A slimmed-down coronavirus relief bill that House Democrats released on Monday again includes marijuana banking protections.
Despite pushback from GOP lawmakers who challenged the germaneness of including the cannabis language in a prior version that the House approved in May, the text of the Secure and Fair Enforcement (SAFE) Banking Act was again inserted into the new legislation. It could get a floor vote as early as this week—and that would mark the third time the chamber has taken up the banking measure in some form in the past year.
The SAFE Banking Act would protect financial institutions that service state-legal marijuana businesses from being penalized by federal regulators, and on its own has significant bipartisan support. But its inclusion in the COVID-19 relief legislation was widely criticized by Republicans who insisted that it was part of an expansive Democratic wishlist of items not related to the health crisis.
Senate Majority Leader Mitch McConnell (R-KY) has been particularly critical of the House proposal, specifically taking issue with industry diversity reporting provisions of the SAFE Banking Act, for example. Other vocal opponents include Vice President Mike Pence and Sens. James Lankford (R-OK) and John Kennedy (R-LA).
The Senate did not add cannabis banking language to its own version of COVID relief legislation filed in July.
“We appreciate that Democratic leadership is standing firmly behind the bipartisan SAFE Banking Act, despite some Republicans in Congress preferring to treat this public safety issue like some kind of comic relief,” Steve Fox, president of VS Strategies, told Marijuana Moment. “Far from being non-germane, the pandemic has only underscored the importance of this legislation.”
“At a time when businesses all across the country are relying on electronic transactions to protect public health, cannabis businesses are being forced to exchange currency. This bill is timely and necessary,” he said.
A summary of the banking provision prepared by House leaders states that it would “allow cannabis-related legitimate businesses, that in many states have remained open during the COVID-19 pandemic as essential services, along with their service providers, to access banking services and products, as well as insurance.”
Notably, the document highlights the diversity reporting language that some Republicans have slammed, signaling that Democrats are not shying away from those components despite the criticism. It explains that the legislation “requires reports to Congress on access to financial services and barriers to marketplace entry for potential and existing minority-owned cannabis-related legitimate businesses.”
Advocates, stakeholders and lawmakers have argued that providing marijuana banking protections will mitigate the spread of the coronavirus by making it so cannabis businesses don’t have to rely on cash transactions. House Speaker Nancy Pelosi (D-CA) said she agrees that the measure is an appropriate component of the bill.
“The inclusion of the SAFE Banking Act in the HEROES 2.0 package is a positive development,” NORML Political Director Justin Strekal said. “In the majority of states that regulate the marijuana marketplace, cannabis businesses have been deemed essential during this pandemic.”
“Unfortunately, at the federal level, prohibition compounds the problems that this emerging industry faces,” he said. “Small cannabis businesses in particular are facing tough economic times and access to traditional financial tools will help ensure that they can weather this pandemic.”
While the incremental reform measure would help alleviate financial complications in the cannabis market, news that House Democrats opted to stick to their guns on the industry-focused marijuana banking legislation could frustrate advocates who were disappointed when the chamber’s leadership decided to postpone a planned vote on a comprehensive cannabis legalization and social equity bill earlier this month.
The banking provisions are generally considered industry friendly without addressing the systemic problems resulting from the war on drugs. In the past, some activists have made the case that lawmakers should’t approve the SAFE Banking Act until marijuana is descheduled and restorative justice policies are implemented.
The House was expected to hold a floor vote on the Marijuana Opportunity, Reinvestment and Expungement (MORE) Act to federally legalize cannabis last week, but leaders announced they were delaying it after certain centrist Democrats expressed concern about the optics of advancing marijuana reform legislation without first passing additional COVID relief.
All that said, others do view the banking protections as a boon for social equity in that they would help minority-owned cannabis businesses that currently struggle to get access to capital and financial services.
“Without access to much needed capital to maintain throughout the crisis, it is possible that we could see an acceleration of the corporatization of the cannabis industry in a manner that is inconsistent with the values and desires of many within the cannabis space,” Strekal said. “Enactment of the SAFE Banking Act would ensure that small businesses could compete in this emerging marketplace.”
In July, bipartisan treasurers from 15 states and one territory sent a letter to congressional leadership, urging the inclusion of the SAFE Banking Act in any COVID-19 legislation that’s sent to the president’s desk. Following GOP attacks on the House proposal, a group of Democratic state treasurers renewed that call.
The House last year approved the standalone SAFE Banking Act. For months, the legislation has gone without action in the Senate Banking Committee, where negotiations have been ongoing.