Marijuana reform advocates scored two victories on Tuesday after a key congressional committee approved a spending bill that included a cannabis banking provision and excluded another rider that previously impeded legalization in the nation’s capital. The moves came in spite of impassioned objections from a handful of Republican lawmakers.
For the first time ever, the House Appropriations Committee passed spending legislation that would provide protections for banks that service marijuana businesses. And a longstanding provision prohibiting Washington, D.C. from using its own local tax dollars to implement a legal cannabis sales system was not included in the bill.
The banking provision states that no funds distributed through the legislation “may be used to penalize a financial institution solely because the institution provides financial services to an entity that is a manufacturer, a producer, or a person that participates in any business or organized activity that involves handling marijuana, marijuana products, or marijuana proceeds” in a jurisdiction where it’s legal.
Rep. Chris Stewart (R-UT) introduced an amendment at the meeting that would have limited the banking protection to the medical cannabis market only, but following extensive pushback from a bipartisan coalition of members, he ultimately withdrew the amendment before forcing a losing vote.
The congressman said that he supports medical cannabis, which voters in his state legalized last year, but felt providing a safeguard for businesses operating in compliance with broader state recreational marijuana laws sends the wrong message from the federal government. He went so far as to say that he didn’t mind if these businesses and their employees are at risk of robberies because they’re operating on a largely cash basis.
“I guess I’m just willing to say a company that’s selling recreational marijuana to our youth and to others, I don’t really care if they have a threat of cash sitting in their basement, if they’re paying their employees in cash,” Stewart said. “I don’t want to make life easier for them. I want to make it more difficult.”
Reps. Mike Quigley (D-IL), Tom Graves (R-GA), Betty McCollum (D-MN), Barbara Lee (D-CA), Brenda Lawrence (D-MI) and David Joyce (R-OH) all voiced opposition to the amendment.
Graves and McCollum argued that excluding the adult-use market from the banking provision would create even more confusion and uncertainty in the financial sector. How would banks be able to differentiate revenue derived from medical versus recreational cannabis sales at shops that sell both, they asked, for example.
“This really isn’t about the issue of medical marijuana and recreational marijuana. The issue is more about states’ rights, quite frankly,” Graves said. “It’s really, really important in my viewpoint that we eliminate some gray space—that we make sure that the rules are defined.”
“It becomes very complicated very fast,” McCollum said of the proposed amendment. “What we want to have is transparency, accountability and confidence in our tax system and our banking system.”
Reps. Harold Rogers (R-KY) and Andy Harris (R-MD) said they supported the amendment, with both focusing on marijuana’s legal status under federal law and warning that approving the provision would encourage more usage.
“Bottom line is what we’re going to do here today is send a message: Is recreational marijuana a thing that the federal government should be promoting?” Harris said.
“There is no state where it’s legal under federal law. It is a gateway drug,” he said. “This is a huge money-making industry. This is Big Cannabis.”
While more financial institutions have been willing to accept cannabis business accounts, many banks still fear being penalized by federal regulators given the lack of clarity on the issue. In 2014, a similar amendment addressing the issue was approved in a House floor vote but it was never enacted into law. The Appropriations Committee rejected a marijuana banking amendment after it was introduced before the panel last year.
Bipartisan legislation that cleared the House Financial Services Committee in March would resolve the problem, but that bill represents a permanent fix whereas this appropriations provision must be annually renewed.
The standalone Secure And Fair Enforcement (SAFE) Banking Act is expected to go before the full House in coming weeks. It currently has 206 cosponsors—nearly half of the chamber.
“Today’s small victories demonstrate an appetite for greater protections of the reform movements progress,” Justin Strekal, political director of NORML, told Marijuana Moment. “Our staying power is undeniable in the effort to end federal prohibition and criminalization.”
Reform advocates secured another victory with the bill’s passage: A provision that has blocked the District of Columbia from spending local taxpayer dollars to legalize and regulate cannabis was excluded from the legislation.
Earlier years’ versions of the bill stipulated that D.C. couldn’t use appropriated funds “to enact any law, rule, or regulation to legalize or otherwise reduce penalties associated with the possession, use, or distribution of any schedule I substance under the Controlled Substances Act or any tetrahydrocannabinols derivative for recreational purposes.”
Voters in Washington, D.C. legalized marijuana possession and cultivation in 2014, but the congressional provision left lawmakers with their hands tied when it came to regulating the plant.
Harris, who first introduced the provision, was expected to introduce an amendment get his language back into the spending legislation during Tuesday’s committee markup, but instead focused on introducing amendments to block the decriminalization of sex work in D.C. and creating regulatory exceptions for private schools in the District, while declining to mention the cannabis provision. The panel rejected both of his D.C. proposals.
“The man who has unapologetically been offering up this rider and fighting for it for years didn’t even bother to introduce the amendment,” said Queen Adesuyi, policy coordinator with the Drug Policy Alliance. “He knew it was going to lose and lose badly. His waving white flag gives us optimism on our ability to secure this win and free D.C. to implement legalization through a racial justice lens the way D.C. residents intended.”
Don Murphy, director of federal policies for the Marijuana Policy Project, told Marijuana Moment that the cannabis rider’s removal from the bill is “a win for the voters of the District, and although it may be low hanging fruit, it sure tastes sweet.”
The appropriations process—which has historically been the only vehicle through which Congress has enacted marijuana policy changes—is being leveraged to address a wide range of cannabis reform proposals this session.
Reports that have been released by the Appropriations Committee this year include calls for medical cannabis research expansion, implementing hemp regulations, establishing regulations for CBD, preventing impaired driving and protecting benefits for military benefits.
On Monday, the panel also published a report urging the federal government to reconsider its employment policies as it concerns federal workers who use cannabis in compliance with state law.
The same day, the House Rules Committee, another powerful panel, cleared an amendment for floor consideration that was introduced by Rep. Alexandria Ocasio-Cortez (D-NY), eliminating a rider prohibiting the use of federal funds for “any activity that promotes the legalization of any drug or other substance in Schedule I.”
The purpose of the legislation is to remove barriers to research into the potential therapeutic use of such substances, including cannabis, psilocybin and MDMA, the congresswoman said.
But the panel declined to advance a separate amendment from Rep. Lou Correa (D-CA) that would have barred the Department of Education from denying or limiting “any funding or assistance to institutions of higher education” where the use or possession of cannabis is permitted.
The committee chairman, Rep. Jim McGovern (D-MA), told Marijuana Moment the amendment wasn’t made in order for procedural reasons and that he will “continue to welcome and encourage debate on marijuana policy.”
The spending bill covering the Treasury Department and funding for Washington, D.C. that was approved the the appropriations panel next heads to the Rules Committee, which will decide which further amendments, potentially including cannabis-related ones, can be considered on the floor.
Photo courtesy of Brian Shamblen.
USDA Approves Hemp Plans For Texas, Nebraska And Delaware
The U.S. Department of Agriculture (USDA) announced on Monday that it has approved hemp regulatory plans for three more states and four additional Indian tribes.
This is the latest in a series of approvals that USDA has doled out since the crop and its derivatives were federally legalized under the 2018 Farm Bill. Texas, Nebraska and Delaware—in addition to the Colorado River Indian Tribes, the Fort Belknap Indian Community, the Iowa Tribe of Kansas and Nebraska and the Yurok Tribe—each had their regulatory plans cleared.
“USDA continues to receive and review hemp production plans from states and Indian tribes on an ongoing basis,” the department said in a notice. “Plans previously approved include those for the states of Louisiana, New Jersey, and Ohio, and the Flandreau Santee Sioux, Santa Rosa Cahuilla, and La Jolla Band of Luiseno Indian Tribes.”
While hemp is no longer a federally controlled substance, farmers interested in cultivating and selling the crop must live in a jurisdiction where USDA has approved a proposed regulatory scheme. The process was outlined in an interim final rule USDA published late last year. If a state or tribe does not have, or plan to propose, regulations for hemp, cultivators can apply for a USDA license instead.
“This is a victory for Texas farmers,” Texas Agriculture Commissioner Sid Miller said in a statement. “We are one step closer to giving our ag producers access to this exciting new crop opportunity.”
“We’ve got to get our rules approved and get our licensing program up and running, but the dominoes are dropping pretty quick,” he said. “We’re almost there.”
Heather Fazio, director of Texans for Responsible Marijuana Policy, told Marijuana Moment that “Texas has the potential to be the largest supplier of hemp in the U.S., providing farmers with an unprecedented opportunity.”
“With approval from the USDA and the Texas Department of Agriculture already moving forward with establishing licensing standards, it’s refreshing to see our government paving the way for legal cannabis cultivation in Texas,” Fazio said.
While lawmakers and industry stakeholders have widely celebrated USDA’s commitment to implementing hemp legalization, it has also received a significant amount of pushback over proposed rules such as THC limits and laboratory testing requirements. A public comment period for the department’s interim rule ends on Wednesday.
USDA maintains a website that tracks the status of state and tribal hemp plans.
Monday’s announcement sends another signal to the hemp industry that the federal government is committed to supporting the market and ensuring that farmers have the resources they need to see their businesses thrive since the crop was legalized.
That said, one of the most lucrative market opportunities that hemp farmers are hoping to take advantage of is the widespread interest in hemp-derived CBD products. The Food and Drug Administration (FDA) has jurisdiction over rules for marketing CBD, and the agency has made clear that the process may take several years without congressional action.
Earlier this month, a bipartisan coalition of lawmakers set out to do just that, filing a bill that would require FDA to allow CBD products to be sold as dietary supplements.
Photo courtesy of Brendan Cleak.
Mexico’s President Says A New Marijuana Panel Will Make Legalization Recommendations
The president of Mexico said on Monday that a government panel is being formed in order to make recommendations for a legal marijuana system in the country.
While he didn’t offer many details about the commission, President Andrés Manuel López Obrador said it will be focused on studying public health aspects of legalization.
“A group is going to be formed to decide what will happen about that with a public health approach. We are about to comply with the recommendation of the Supreme Court,” the president said during a press conference, according to a translation of his remarks, referencing a 2018 ruling that deemed the prohibition of cannabis for personal use unconstitutional.
Watch López Obrador’s marijuana comments, around 1:43:45 into the video below:
Asked to weigh in on the argument that regulating drugs like cannabis could combat cartels, the president said “we are analyzing this possibility” and went on to describe the state of play on legislation to legalize marijuana.
Since the court ruling, legislators have spent months discussing and drafting marijuana reform legislation to create a commercial cannabis market. Several Senate committees produced a comprehensive legalization bill last year, which advocates hoped would get a vote before the court’s October 2019 deadline to change the country’s marijuana policy, but that didn’t pan out.
The court granted lawmakers a deadline extension to end prohibition by April 30 of this year.
“We are about to fulfill this recommendation of the [Supreme Court] so that it becomes law,” he said. “We are going to process it, we are working on that—I think it will move forward. A group will be formed to decide what to do about this, basically.”
An amended reform bill, jointly submitted by the Justice and Health Committees, started circulating earlier this month. It would legalize possession of up to 28 grams, or 200 grams for those who obtain a certain license. Individuals would also be able to cultivate up to six plants.
“We have to review it well, of course, all with the public health approach, always with that approach, and taking into account the changes that are taking place,” the president said. “This is being analyzed.”
Sen. Ricardo Monreal Ávila of the ruling MORENA party stressed that the legislation isn’t final, but it’s a step in the right direction. He said he’ll be meeting with Interior Secretary Olga Sánchez Cordero and Julio Scherer, a legal advisor to the president, this week to discuss cannabis reform legislation.
Monreal, who included marijuana legalization in a list of legislative priorities this month, said he expects lawmakers to pass reform legislation ahead of the April deadline.
Advocates Push Back On Secretly Recorded Trump Claim That Marijuana Use Lowers IQ
Marijuana reform advocates are hitting back at President Trump’s suggestion that cannabis use makes people lose IQ points.
“In Colorado they have more accidents,” the president said of the first state to legalize cannabis for adult use. “It does cause an IQ problem.”
The comments were revealed over the weekend in a surreptitiously recorded video captured in April 2018 by Lev Parnas, an associate of Trump attorney Rudolph Giuliani, who is involved in the Ukraine scandal that led to the president’s impeachment.
But when it comes to cannabis’s impact on intelligence, Trump has it wrong, according to the National Institute on Drug Abuse, which determined based on longitudinal twin studies that there is not “a causal relationship between marijuana use and IQ loss.”
In interviews with Marijuana Moment on Monday, legalization advocates expressed frustration that the president perpetuated the prohibitionist talking point.
“Trump’s remarks simply reveal that he is out of touch, given that the majority of Americans support marijuana legalization for both medical and adult use,” Sheila Vakharia of the Drug Policy Alliance said. “This type of rhetoric is fear-mongering and inflammatory.”
“The evidence is clear from the dozens of states that have legalized medical and adult use—the sky isn’t falling and the kids are alright,” she said.
Erik Altieri, executive director of NORML, said that “what truly causes a decline in an individual’s intelligence is adhering to false Reefer Madness rhetoric that flies in the face of available science.”
“If President Trump truly believes that responsible marijuana use by adults leads to a loss of IQ points, we suggest he immediately consults his physician to see if he is suffering from this affliction or at the very least consults the wide body of available research that debunks this old talking point,” he told Marijuana Moment.
Listen to Trump talk about marijuana, about 45:30 into the video below:
But while the president’s IQ claim came as a disappointment, there were other aspects of the secretly recorded dinner conversation concerning that cannabis reform advocates see as positive.
For example, Trump seemed surprised to hear that state-legal marijuana businesses don’t have access to traditional financial services, which Parnas described as “the biggest problem” in the industry.
“Cannabis, look, you’re talking about marijuana, right? You can’t do banking there?” the president said, adding that the issue is “all working out. That whole thing is working out.”
“I don’t know if that’s a good thing or a bad thing,” he said.
Trump, who has previously voiced support for allowing states to set their own marijuana policies, also asked others at the dinner table whether they believe “the whole marijuana thing is a good thing” and whether the plant is “actually good for opioids.”
One person said cannabis is a “better alternative” to prescription opioids, and Donald Trump Jr. noted that “alcohol does much more damage” than marijuana and that “you don’t see people beating their wives on marijuana. It’s just different.”
Morgan Fox, media relations director for the National Cannabis Industry Association, told Marijuana Moment that it’s “pretty frustrating that the president, like many others, has been misled by ‘Just Say No’ propaganda into believing the disproven idea that cannabis consumption decreases intelligence.”
“However, this clip suggests that he is in a fairly good position or at least heading towards one on the issue overall,” he said. “I think it is pretty clear that he understands that prohibition is a failure from an economic standpoint, that states should be free from federal interference, and that reform could help with the opioid epidemic.”
“His statements regarding access to banking suggest that he would be willing to sign cannabis banking reform legislation that crosses his desk. Generally, it is very heartening to see that the administration is having substantive conversations about it, and we welcome the opportunity to continue this discussion with the president to make sure he recognizes the urgency of reform and has the facts.”
Later in the recording, Parnas made the case that Trump should embrace marijuana reform ahead of the 2018 midterm elections to attract young voters and get “ahead of” the issue.
“It’s so far out you’re not going to stop it,” he said. “I think you need to be ahead of it.”
Parnas pitched the idea of establishing a “bipartisan committee” with “no politicians” to independently explore possible policy changes and make recommendations to the administration. The president didn’t directly reply.
While Trump didn’t take up the suggestion to take the lead on cannabis prior to the 2018 election in which Republicans lost control of the House of Representatives, Don Murphy, director of federal policies at the Marijuana Policy Project, said it’s not too late for him to act.
The president “has an opportunity to make the history books undoing a war he inherited, waged against Americans—African Americans in particular—literally for generations,” he said.
“Even his predecessor continued that same failed policy, throwing even more people in prison. Not only that, he has a chance to out flank every Democratic candidate in the field,” Murphy told Marijuana Moment, referring to the Obama administration’s rejection of petitions to reclassify cannabis under federal law. “He would be remembered as our greatest criminal justice reformer in history.”
Photo courtesy of Wikimedia.