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American Bankers Association Demands Answers About Hemp And CBD

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The American Bankers Association (ABA) recently sent a letter imploring top federal financial regulators to provide explicit guidance on how the banking sector can lawfully service hemp businesses.

The letter—sent to the heads of the Federal Reserve, Federal Deposit Insurance Corporation (FDIC), the Treasury’s Comptroller of the Currency and Financial Crimes Enforcement Network (FinCEN) last week—describes ongoing uncertainty among financial institutions since hemp and its derivatives were federally legalized under the 2018 Farm Bill.

ABA Executive Vice President Virginia O’Neill wrote that “banks remain uncertain about the degree to which they can serve hemp-related companies, and the compliance and reporting requirements that such relationships require.”

“Although other federal regulators have issued helpful clarifications regarding hemp production, banks are subject to a complex set of legal requirements and regulatory expectations and require specific guidance to ensure they are acting appropriately,” she wrote. “Furthermore, the unique nature of hemp as a low-THC strain of marijuana, which remains a Schedule I substance under the [Controlled Substances Act], means banks must have a reliable mechanism to distinguish legal hemp from federally illegal marijuana with extreme confidence.”

There have been other attempts to elicit clarification from federal regulators in the months since hemp was legalized.

Rep. Andy Barr (R-KY) asked FDIC Chair Jelena McWilliams about the issue in May, telling her that he has constituents who’ve told him their access to financial services has “actually deteriorated since we descheduled industrial hemp” and requesting further guidance.

In a similar letter to federal regulators this month, Sen. Michael Bennet (D-CO) also complained about the continued lack of access to banking services for hemp producers. The 2020 Democratic presidential candidate said he hopes the agencies “can work expeditiously and in a coordinated manner to issue guidance describing how financial institutions can offer financial products and services to hemp formers and processors.”

But so far, the closest the regulators have come to assuaging the concerns of banks is a statement from a top Federal Reserve official who said during a Senate hearing earlier this month that “hemp is not an illegal crop.”

ABA said it appreciated the comment but that “a formalized statement from the agencies is necessary to enable banking services for the hemp industry on a meaningful scale.” O’Neill requested confirmation of five specific areas of interest.

“Specifically, we ask that the agencies confirm that:

“—hemp is no longer a controlled substance, effective as of the enactment of the 2018 Farm Bill, and therefore proceeds derived from hemp businesses are not unlawful, and handling those proceeds does not constitute money laundering;

“—banks do not need to file suspicious activity reports solely because a transaction relates to hemp or hemp-derived products;

“—banks can rely on a license issued by a state department of agriculture or the U.S. Department of Agriculture to confirm that a hemp producer is operating in compliance with state and federal law, and that their product qualifies as ‘hemp’ as defined in the 2018 Farm Bill;

“—in accordance with United States Department of Agriculture (USDA) guidance, banks can serve hemp cultivators and processors operating subject to state pilot programs under the 2014 Farm Bill, effective immediately; and

“—as soon as USDA finalizes its regulations related to industrial hemp, banks will be able to serve hemp cultivators and processors operating under state approved plans or direct federal licenses.”

Further, ABA asked for specific guidance as it relates to hemp-derived CBD and information about “the appropriate procedures for sourcing those products back to legal cultivators and processors.”

While the association recognized that “this is an evolving area of law and regulation” and that questions remained among federal regulators about the implementation of hemp legalization, it said that “there are steps that can be taken now to help clarify legal and regulatory expectations for banks in the current environment.”

The letter focused exclusively on hemp and its derivatives, but there’s a simultaneous conversation going on nationally about how financial institutions can work with state-legal marijuana businesses. Bipartisan legislation that would protect banks that service such businesses has the support of all 50 individual state bankers associations.

Read the full ABA letter on hemp banking below:

Regulators Hemp 062119 by on Scribd

Senator Urges FDA To Speed Up CBD Regulations

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Marijuana Moment is made possible with support from readers. If you rely on our cannabis advocacy journalism to stay informed, please consider a monthly Patreon pledge.

Kyle Jaeger is Marijuana Moment's Sacramento-based senior editor. His work has also appeared in High Times, VICE and attn.

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Bank Of America Cancels Account Of Marijuana And Psychedelics Research Institute Registered With DEA

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The second-largest bank in the U.S. is shutting down the account of a research institute that’s federally authorized to cultivate and study Schedule I substances like marijuana and psilocybin mushrooms.

Bank of America (BoA) abruptly notified the Scottsdale Research Institute (SRI) that it would be closing its accounts last week, without a clear explanation of the reasoning. A letter from the bank that was shared with Marijuana Moment on Monday says the decision was made after “a careful review of your banking relationship” and that the action is “final and won’t be reconsidered.”

SRI has spent years fighting for expanded access to research-grade controlled substances to study their therapeutic potential, in part by litigating against the Drug Enforcement Administration (DEA) on issues such as cannabis scheduling. In May, it received preliminary approval from the agency to be one of the first new federally authorized cultivators of cannabis for research, effectively ending a decades-long monopoly on such manufacturing.

The institute is already getting bids from other financial institutions that want to take on the account after chief investigator Sue Sisley shared the news of the BoA closure on social media.

“We just wanted to expose wrongdoing of these big banks,” Sisley told Marijuana Moment, adding that they want to “show the public that even federally legal operations are being unfairly targeted by these large banks who refuse to look at our federal regulatory documents.”

It takes significant resources to obtain and maintain DEA clearance to grow and study Schedule I substances like marijuana. One theory that Sisley floated was that BoA may have decided to end the business relationship after SRI was more recently cleared to cultivate psilocybin for research, but the bank provided “zero justification.”

“Maybe it was the mushrooms that freaked them out?”

Marijuana Moment reached out to BoA for comment, but representatives did not respond by the time of publication.

Sisley said the institute received “no warning,” with “no ability to speak to somebody logical who could review our operating agreement with DEA. We have been plant-touching since our start with Bank of America 10 years ago” and were “always transparent about that.”

“We have a contract with DEA. We are growing cannabis for [Food and Drug Administration] clinical trials and selling it to the DEA,” she said. “It’s unconscionable the way they are behaving—and further proof that the word ‘cannabis’ continues to be completely radioactive even though this is a 100 percent federally legal operation.”

“Fortunately, there are banks that care about the progress of federally regulated and federally legal research and are eager to step up and support us immediately,” Sisley added. “We will be moving our funding from Bank of America and never returning there. Our research continues without harm because other banks that care about scientific freedom were able to step up. Bank of America doesn’t even have the decency to provide an explanation after a decade of banking with an openly plant-touching business.”

SRI has been behind several legal challenges imploring the federal government to remove research barriers for Schedule I drugs like marijuana and psychedelics.

In August, a federal appeals court has dismissed SRI’s petition to require DEA to reevaluate marijuana’s scheduling under the Controlled Substances Act (CSA)—but one judge said in a concurring opinion that the agency may soon be forced to consider a policy change anyway based on a misinterpretation of the medical value of cannabis.

The lawsuit received oral arguments in June and largely centered on DEA’s 2020 denial of a one-page marijuana rescheduling petition filed by a separate individual. In its response, the agency argued that marijuana has no currently accepted medical value.

The petitioners initially filed their lawsuit, Sisley v. DEA, against the federal agency in May of last year, contending that DEA’s justification for maintaining a Schedule I status for cannabis violates the Constitution on numerous grounds. DEA attempted to dismiss the case, but the Ninth Circuit rejected that request in August.

In a separate case, the institute successfully forced DEA to issue an update on the status of its application to grow cannabis and then got the Justice Department to hand over a “secret” memo that DEA allegedly used to justify a delay in deciding those proposals.

Meanwhile, DEA is taking additional steps to promote research into the potential risks and benefits of marijuana and certain psychedelics. Last week it proposed a dramatic increase in the legal production substances like cannabis, psilocybin, LSD, MDMA and DMT to be used in research next year.

DEA had already massively upped its proposed 2021 quota for cannabis and psilocybin last month, but now it’s calling for significantly larger quantities of research-grade marijuana and a broader array of psychedelics to be manufactured in 2022.

But despite these developments and the changing policy landscape surrounding marijuana and psychedelics at the state and local level, many financial institutions remain reluctant to service clients that work with these currently federally illicit products.

The number of banks and credit unions reporting that they work with marijuana businesses ticked up last quarter, according to federal data released last month.

Lawmakers have been working to to enact clear, statutory protections for banks and credit unions that work with the marijuana industry to alleviate remaining hesitation in the financial services industry about working with cannabis businesses. That would be accomplished through House-passed standalone legislationor an amendment that was attached to a defense spending bill last month.

In the meantime, Sisley said SRI could sue BoA over the account cancelation, but it has other things to focus on.

“We have important work to do,” she said. “We need to stay on our path to helping whole plant cannabis flower walk through the entire FDA drug development process.”

States Promote Federal Hemp Survey Being Mailed Out This Week To More Than 20,000 Farmers

Image element courtesy of Kristie Gianopulos.

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Americans Want To Live Where Marijuana Is Legal, Real Estate Survey Finds

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Americans would rather live in states where marijuana is legal than in those that continue to criminalize cannabis consumers. That’s according to a new survey published on Monday by real estate company Redfin.

Among those who recently moved to a new metro area, 46 percent said they prefer to reside somewhere marijuana is “fully legal,” compared to just 22 percent who want to live in a place with prohibition still in effect.

The share of those who like legalized jurisdictions includes more than one in ten respondents—12 percent—who say they would only consider living in places where cannabis can be legally purchased. On the other side, 10 percent said they would rule out moving to areas that have ended criminalization.

Thirty-two percent of people taking the survey said they don’t care about the marijuana issue when it comes to where to live.

Via Redfin.

The survey, which involved 1,023 U.S. residents who moved to a new home during the 18 months prior to answering the questions in August, also asked about other issues such as abortion policy, voting rights and anti-discrimination laws for gender and sexual orientation.

Redfin said that while public policies on cannabis and other issues are important factors in deciding where to move, other considerations often take precedence.

“People take the politics of a place into consideration when deciding where to move, but the truth of the matter is that other factors including housing affordability and access to jobs and schools take priority,” Taylor Marr, the deputy chief economist for the company, said in a press release. “Oftentimes this means someone will move from a blue state to a red state (or vice versa), but choose a home in a neighborhood where most people hold the same political views as they do. Austin—a liberal Texas enclave that’s attracting scores of left-leaning folks from pricier coastal cities—is just one example.”

Prior analyses, including one published this year that uses data from online real estate marketplace Zillow, has shown that marijuana legalization is associated with higher home property values. “Home values increased $6,338 more in states where marijuana is legal in some form, compared to states that haven’t legalized marijuana,” it concluded.

Last year, a separate analysis from economists at the University of Oklahoma similarly found that states that legalize marijuana see a boost in housing prices, with the effect most pronounced once nearby retail outlets open for business.

Research—including a study released this month that was authored by a federal official with the U.S. Department of Agriculture—has tied cannabis legalization to lower crime rates, a key factor in home values and neighborhood desirability.

Impact Of Marijuana Legalization On Crime Reduction Is Being Underestimated, New Study Finds

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Nevada Sold More Than $1 Billion In Marijuana In One Year, Officials Report

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Nevada retailers sold more than $1 billion in medical and recreational marijuana over a one-year period, state officials announced on Wednesday.

The Nevada Cannabis Compliance Board (CCB) and the Nevada Department of Taxation released the data, which shows $1,003,467,655 in taxable cannabis purchases in Fiscal Year 2021, which ran from July 1, 2020 to June 30, 2021.

By contrast, total marijuana sales for the prior 2020 fiscal year amounted to $685 million.

The bulk of the marijuana purchases ($791,100,017) came from Clark County, where Las Vegas is located. Another $135,326,790 of cannabis was sold in Washoe County, with Reno being the major city in that jurisdiction. The $77,040,859 remainder came from other counties.

Ten percent of tax revenue from recreational cannabis sales will support pubic education funding, as prescribed under a bill that Gov. Steve Sisolak (D) previously signed.

“This is what Nevadans expected since the legalization of recreational marijuana,” the governor said in a press release about the new sales data. “Education remains one of my top priorities, and I’m proud to see promised tax revenue from cannabis sales directly funding our students and classrooms.”

Sisolak also signed a bill in June to legalize marijuana consumption lounges in the state.

The new social use license types statewide and giving consumers this option—especially in the tourist-centric state—could further boost marijuana and other tax revenues.

The governor has also committed to promoting equity and justice in the state’s marijuana law. Last year, for example, he pardoned more than 15,000 people who were convicted for low-level cannabis possession.

That action was made possible under a resolution the governor introduced that was unanimously approved by the state’s Board of Pardons Commissioners.


Marijuana Moment is already tracking more than 1,200 cannabis, psychedelics and drug policy bills in state legislatures and Congress this year. Patreon supporters pledging at least $25/month get access to our interactive maps, charts and hearing calendar so they don’t miss any developments.

Learn more about our marijuana bill tracker and become a supporter on Patreon to get access.

Meanwhile, states across the U.S. have been touting marijuana sales and the resulting tax revenue as markets continue to mature.

For example, Illinois marijuana retailers have sold nearly $1 billion worth of legal recreational cannabis products so far in 2021, officials recently reported.

Maine recreational marijuana sales broke another marijuana sales record in August, exceeding $10 million for the first time since the adult-use market launched in October 2020.

Arizona brought in about $21 million in medical and adult-use marijuana tax revenue in July, state officials reported on a new webpage that enables people to more easily track how the industry is evolving.

California collected about $817 million in adult-use marijuana tax revenue during the 2020-2021 fiscal year, state officials estimated in August. That’s 55 percent more cannabis earnings for state coffers than was generated in the prior fiscal year.

A recent scientific analysis of sales data in Alaska, Colorado, Oregon and Washington State found that marijuana purchases “have increased more during the COVID-19 pandemic than in the previous two years.”

In July alone, at least three states saw record-breaking sales for recreational cannabis. The same goes for Missouri’s medical marijuana program.

Michigan marijuana sales broke another record in July with more than $171 million in cannabis transactions, according to data from the state’s regulatory body. There were $128 million in adult-use sales and $43 million in medical cannabis purchases.

Throughout the pandemic, many states allowed cannabis retailers to remain open—with governors and regulators in several markets declaring marijuana businesses to be essential services—and some jurisdictions issued emergency rules allowing curbside pickup, delivery services or other more relaxed policies in order to facilitate social distancing.

Meanwhile, New York officials are projecting that marijuana tax revenue will help keep the state’s budget afloat as cigarette sales continue to decline over the coming years. But retails sales have yet to launch as of now.

Read the marijuana sales data that Nevada officials released below: 

Click to access ccb-dot-cannabis-taxable-sales-data-fy21.pdf

Top Federal Drug Official Gives Maryland Lawmakers Marijuana Legalization Advice At Workgroup Hearing

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