In the face of threats from one of the state’s federal prosecutors, West Virginia’s top fiscal official is calling on the Trump administration to clarify its position on whether marijuana growers and sellers should be able to put their profits in banks.
“I support the rights of my fellow West Virginians, and I recognize the need for medical marijuana as an option for people who are suffering,” Treasurer John Perdue said in a press release on Friday. “I want to do everything in my power to move our state toward a lawful solution; however, I want to be clear that there are real banking challenges at the federal level that my office may not be able to resolve alone.”
Because of ongoing federal criminalization of cannabis, many banks are reluctant to work with marijuana businesses that operate legally in accordance with a growing number of state laws. As a result, those entities must often operate on a cash-only basis.
Perdue, who is announcing a series of moves to step up pressure on the federal government to resolve the issue, said last month that his office was “unwilling to accept the funds derived from medical cannabis” due to conflicts with federal law. In response to that stance, Gov. Jim Justice (R), who signed medical marijuana into law last year, line item vetoed the transfer of funds to the program in the state budget, saying that officials should hold off on implementation until a fiscal solution materializes.
Now, Perdue, a Democrat, says he will send a letter to U.S. Treasury Secretary Steven Mnuchin “asking for clear banking guidance dealing with medical marijuana-related transactions.”
And on Monday, his office is releasing a Request for Information in search of “banking solutions for sales, fees, licenses, taxes and other transactions related to state sanctioned medical cannabis.”
“Our hope is to find a banking alternative, similar to other states that have legalized medical marijuana, in an effort to move forward with offering this option to those who need it in West Virginia,” Perdue said. “Once we have more facts, we may be able to solicit for a workable contract on behalf of the state.”
Perdue’s push comes as the top fiscal officials in four other states requested a meeting with U.S. Attorney General Jeff Sessions to discuss cannabis businesses’ access to banks, and as members of Congress are stepping up the push for a legislative solution.
In the press release, the West Virginia treasurer said he would join at least ten top fiscal officials from other states in a separate letter to congressional leaders calling for “commonsense legislative changes to protect medical marijuana patients.”
Mike Stuart, the U.S. attorney for West Virginia’s Southern District, has repeatedly signaled he intends to enforce federal marijuana laws regardless of the state’s move to legalize medical cannabis.
Have visited many treatment facilities. Every single treatment professional – EVERY SINGLE ONE- has told me “Marijuana is a gateway drug.” My office is preparing to enforce laws against marijuana aggressively – AGGRESSIVELY.
— US Attorney Mike Stuart (@USAttyStuart) March 9, 2018
Key word in Congress’ mandate – “Implementing.” States may implement w/out enforcement but no mention of enforcement after implementing. Today’s pot not pot of old – high THC, 4x the tar as tobacco, & other poisons in pot today. Pot is not cool at all. https://t.co/szMCJA1xjW
— US Attorney Mike Stuart (@USAttyStuart) March 5, 2018
This US Attorney will enforce federal marijuana laws. Congressional mandate to be respected but if law is expanded beyond express mandate, this US Attorney will aggressively take all possible action to protect public, children, citizens and communities. https://t.co/0BKiL8UMsX
— US Attorney Mike Stuart (@USAttyStuart) February 25, 2018
Federal law with respect to marijuana is crystal clear. The Cole memo has been rescinded. Interstate commerce requires compliance with federal law. Today’s marijuana is not naturally grown plant but genetically engineered hard drug. That’s just a fact. https://t.co/rsLjM8PWcD
— US Attorney Mike Stuart (@USAttyStuart) March 30, 2018
Now, the state treasurer is requesting clarity on the issue from Stuart’s bosses in the federal government.
“The fact is that the fate of medical marijuana in West Virginia depends on how President Trump’s administration approaches the enforcement of marijuana and banking laws,” he said in the new press release. “At the very least, I want West Virginia to be treated like all other states that have implemented or started implementation of a medical marijuana program.”
But Stuart indicated that even if West Virginia officials fix banking issues, he wouldn’t hold off on enforcing federal laws, including those that bar medical cannabis patients from purchasing guns.
Even if funding scheme is found, other big conflicts remain. Federal law expressly prohibits users/sellers of all marijuana from possessing firearms. Very strong 2d Amendment supporter but Congress makes laws and I shall aggressively enforce all laws. https://t.co/Do5WUp2j6w
— US Attorney Mike Stuart (@USAttyStuart) March 17, 2018
Mnuchin, the federal treasury secretary, has indicated on a number of occasions that he sees solving cannabis businesses’ access to financial services as an important issue.
Conservative Group ALEC Floats Marijuana Banking And CBD Bills For States To Consider
An influential conservative organization is floating two cannabis-related resolutions that could be used as models for future state legislation.
Tasks forces of the American Legislative Exchange Council (ALEC), a nonprofit that brings together conservative lawmakers and private sector stakeholders to draft and distribute model policies for consideration by state legislatures, discussed banking issues in the marijuana industry and enacting hemp and CBD legalization bills at the group’s 46th annual meeting in Austin last week.
ALEC’s Commerce, Insurance and Economic Development (CIE) Task Force tackled cannabis financial services issues during Thursday’s session, weighing a draft resolution that urges Congress to “enact common-sense federal laws that respect state law and promote public safety without compromising federal enforcement of anti-money laundering laws against criminal enterprises.”
@ALEC_states Commerce, Insurance and Economic Development Task Force will be reviewing several draft model policies, from occupational license reform for ex-offenders to banking for cannabis businesses. #ALECinATX #ALECideas
— American Legislative Exchange Council (@ALEC_states) August 15, 2019
“Congress has sole authority to solve the cannabis banking issue by enacting legislation that provides protections for depository institutions that offer financial services to cannabis-related legitimate businesses and service providers for such businesses,” the resolution states.
The measure specifically says it does not take a position on marijuana legalization itself but rather focuses on how conflicting state and federal cannabis laws mean “the vast majority of financial institutions are unwilling to provide services [to marijuana businesses] and those that do could be subject to severe criminal and civil penalties.”
Because of that problem, many such businesses are operating on a largely cash basis, which ALEC described as “inefficient, expensive, opaque, and make illicit activity more difficult for law enforcement and state regulators to track.”
The resolution also emphasizes the bipartisan nature of resolving the banking issue, referencing a recent letter from 38 state and territory attorneys general that called on Congress to enact a legislative fix.
ALEC’s support for resolving financial uncertainty in the cannabis industry is just one of many recent indicators that legislation such as the Secure and Fair Enforcement (SAFE) Banking Act is considered a nonpartisan issue. The House Financial Services Committee approved the SAFE Banking Act in March, and the Senate Banking Committee held a hearing on the topic last month, despite its Republican chairman initially stating that the panel wouldn’t discuss it as long as marijuana remained federally illegal.
Over in ALEC’s Energy, Environment and Agriculture (EEA) Task Force, members debated draft legislation for states that would “legalize the agricultural production and sale of hemp as well as Cannabidiol oil, commonly known as CBD oil” but explicitly would “not legalize marijuana.”
The model policy seems to be targeted at the limited number of states that still have hemp prohibition on the books despite the crop’s federal legalization under the 2018 Farm Bill. Those states include Idaho, South Dakota and Mississippi, according to the National Conference of State Legislatures.
Provisions of the draft policy signal that the proposal would be in compliance with federal law, which defines hemp as cannabis that contains no more than 0.3 percent THC by dry weight. However, while the 2018 Farm Bill legalized hemp and its derivatives, the Food and Drug Administration has said that unless alternative rules are issued for CBD, it cannot legally be marketed in food items or dietary supplement.
ALEC’s draft policy would provide for such marketing, though. It stipulates that CBD products that contain no THC can sold be if the product is “intended for topical application, oral consumption, or inhalation, by humans, or for consumption by animals.”
It’s not clear how the task forces voted or what exactly the immediate next steps would be if the draft proposals were approved and made final at last week’s conference. Marijuana Moment reached out to representatives of ALEC for clarification but did not hear back by the time of publication.
Photo courtesy of Mike Latimer.
Marijuana Legalization Measure Advances One Step In South Dakota
South Dakota’s attorney general filed an official explanation of a proposed ballot measure to legalize marijuana on Friday.
While separate organizations are working to get a medical cannabis-focused initiative on the state’s 2020 ballot, activists behind this measure are hoping to incorporate recreational legalization, medical marijuana reform and hemp into one package.
Adult-use legalization would be accomplished through a constitutional amendment under the initiative, which would separately require the legislature to pass legislation creating rules for medical cannabis and hemp.
South Dakota Attorney General releases explanation on proposed constitutional amendment to legalize, regulate, and tax marijuana; to require passage of laws regarding hemp as well as laws regarding marijuana for medical use. Read it here: https://t.co/k33buSKjIJ pic.twitter.com/pEG0RxbDj9
— SD Attorney General (@SDAttorneyGen) August 16, 2019
“The constitutional amendment legalizes the possession, use, transport, and distribution of marijuana and marijuana paraphernalia by people age 21 and older. Individuals may possess or distribute one ounce or less of marijuana,” Attorney General Jason Ravnsborg (R) wrote. “Marijuana plants and marijuana produced from those plants may also be possessed under certain conditions.”
The South Dakota Department of Revenue would be responsible for issuing licenses for cannabis cultivators, manufacturers, testing facilities and retailers. Individual jurisdictions would be able to opt out of allowing such facilities in their areas.
“The Department must enact rules to implement and enforce this amendment,” the explanation states. “The amendment requires the Legislature to pass laws regarding medical use of marijuana. The amendment does not legalize hemp; it requires the Legislature to pass laws regulating the cultivation, processing, and sale of hemp.”
The initiative calls for a 15 percent excise tax on marijuana sales. That revenue would be used to fund the Department of Revenue’s implementation and regulation of the legal cannabis system, with remaining tax dollars going toward public education and the state general fund.
Ravnsborg said that judicial clarification of the amendment “may be necessary” and notes that marijuana “remains illegal under Federal law.”
The attorney general issued a similar explanation of a proposed constitutional amendment to legalize medical cannabis earlier this month.
This latest move comes one day after advocacy organization New Approach South Dakota announced that their medical marijuana initiative was certified, enabling them to begin the signature gathering process.
Several other cannabis initiatives are in the process of being certified in the state, according to the attorney general’s website. In order to place constitutional amendments on the ballot, activists must collect 33,921 valid signatures from voters.
South Dakota is one of the last remaining states in the U.S. that has not legalized marijuana for any purposes.
Photo courtesy of Brian Shamblen.
Elizabeth Warren’s Plan For Indian Tribes Includes Marijuana Legalization
Sen. Elizabeth Warren (D-MA) unveiled a plan on Friday that’s aimed at holding the federal government accountable for following through on its obligations to Native American tribes, and that includes ensuring that tribal marijuana programs are protected against federal intervention.
The plan emphasized Warren’s support for a bill she filed earlier this year that “would protect cannabis laws and policies that tribal nations adopted for themselves.”
The 2020 Democratic presidential candidate, who has faced criticism over claims of Native American heritage, pointed to federal reports showing that tribal programs generally have not received adequate funding and said it is imperative that legislation be enacted to “provide resources for housing, education, health care, self-determination, and public safety” for those communities.
To that end, Warren is planning to introduce a bill called the “Honoring Promises to Native Nations Act” alongside Rep. Deb Haaland (D-NM), co-chair of the Congressional Native American Caucus. Before filing, however, the lawmakers are soliciting input on how best to draft the legislation, and are accepting written testimony until September 30.
While the proposed legislation itself doesn’t currently include marijuana-specific provisions, a press release and blog post on the topic address the senator’s sponsorship of the Strengthening the Tenth Amendment Through Entrusting States (STATES) Act, which would allow tribal communities and states to set their own cannabis policies without Justice Department interference.
In order to provide economic opportunities to Native people, that “requires streamlining and removing unnecessary administrative barriers that impede economic growth on Tribal lands, respecting tribal jurisdiction over tribal businesses, and promoting forward-looking efforts to ensure full access to new and emerging economic opportunities.”
“For example, while not every tribe is interested in the economic opportunities associated with changing laws around marijuana, a number of Tribal Nations view cannabis as an important opportunity for economic development,” Warren’s campaign blog post states.
“I support full marijuana legalization, and have also introduced and worked on a bipartisan basis to advance the STATES Act, a proposal that would at a minimum safeguard the ability of states, territories, and Tribal Nations, to make their own marijuana policies,” she wrote.
.@RepDebHaaland & I invite feedback about this proposal & look forward to working closely with tribal nations & citizens, experts, & other stakeholders to advance legislation in Congress that honors the United States’ promises to Native peoples. https://t.co/qc1fkBGb3I
— Elizabeth Warren (@SenWarren) August 16, 2019
A separate press release on Warren’s Senate website also touts her support for the STATES Act, saying she “worked hard to ensure” that it included tribal protections.
“It’s beyond time to make good on America’s responsibilities to Native peoples, and that is why I’m working with Congresswoman Haaland to draft legislation that will ensure the federal government lives up to its obligations and will empower tribal governments to address the needs of their citizens,” Warren said of the overall tribal plan. “We look forward to working closely with tribal nations to advance legislation that honors the United States’ promises to Native peoples.”
In an email blast to her campaign list, Warren included “a set of additional ideas to uphold the federal government’s trust and treaty obligations with Tribal Nations and to empower Native communities,” which includes her marijuana proposal:
“New economic opportunities: We also need to respect tribal jurisdiction over tribal businesses and promote forward-looking efforts to ensure full access to new economic opportunities. For example, a number of Tribal Nations view cannabis as an important economic opportunity. I support full marijuana legalization and have advanced the STATES Act, a proposal that would safeguard the ability of Tribal Nations to make their own marijuana policies.”
There’s increased interest in ensuring that Native populations receive the same benefits and protections as states as it concerns cannabis legislation.
In June, the House passed a spending bill that included a rider stipulating that Native American marijuana programs couldn’t be infringed upon by the Justice Department. And a GOP representative filed a bill in March that would provide similar protections.