A bipartisan coalition of state treasurers sent a letter to congressional leaders on Wednesday, asking that they include marijuana banking protections in the next piece of coronavirus relief legislation.
The letter, led by Oregon Treasurer Tobias Read, says that the current pandemic has underscored the need to pass the Secure and Fair Enforcement (SAFE) Banking Act, which would protect banks that service the cannabis industry from being penalized by federal regulators.
“This provision would not only address new safety issues created by the COVID-19 crisis, but also those caused by the existing conflict between federal and state cannabis laws,” they said. “The 28,000 cannabis related legitimate businesses and their 243,700 employees, who already faced significant burdens before the pandemic, are now confronting dangerous new obstacles as they attempt to address the changed circumstances. To keep workers, patients and consumers safe, it is essential that we reduce the use of cash by creating access to financial services for these state-licensed businesses.”
The House did include the SAFE Banking Act in its COVID-19 relief bill that it approved in May, but Senate leadership has indicated that the larger bill as such will not advance in the chamber and President Trump said he would veto it. Some Republicans, including Majority Leader Mitch McConnell (R-KY), have specifically criticized aspects of the cannabis banking language itself.
The standalone SAFE Banking Act previously passed the House in a largely bipartisan vote last year.
“Lack of access to financial services forces businesses to operate exclusively using cash making these businesses, their employees, and customers targets for violent crime,” the 16 state treasurers wrote to McConnell and other congressional leaders in the new letter. “In many cases, cannabis stores and dispensaries are limiting sales to curbside pickup or delivery, forcing these all-cash transactions to take place outside, without the option of no-contact exchanges.”
The letter explains how the use of cash “is particularly dangerous” for the millions of registered medical cannabis patients” because the virus can live on surfaces, including cash and coin, for extended periods of time.”
“In response to the coronavirus, the international financial community, many major businesses, and even governmental entities have looked for cashless alternatives to financial transactions. However, the overwhelming majority of medical cannabis transactions still involve cash. This is particularly dangerous for medical cannabis caregivers and patients who are already at a higher risk for contracting the virus. Allowing cannabis-related legitimate businesses access to traditional banking could reduce the spread and protect many of the most vulnerable among us.”
The letter goes on to discuss the growing economic impact of the marijuana industry as more states legalize and the importance of securing protections for the financial institutions that service these businesses. It also points out how, despite the fact that many states have deemed cannabis providers as essential, they are ineligible for federal coronavirus-relief loans due to ongoing prohibition.
“With millions of dollars in cash transactions putting employees, patients, and consumers at risk, it is vital that Congress act swiftly to pass this important legislation,” Read said in a press release.
Rep. Ed Perlmutter (D-CO), sponsor of the SAFE Banking Act, said, “I appreciate the ongoing support of the SAFE Banking Act by our nation’s state treasurers.”
“Legitimate cannabis-related businesses and their employees already faced significant burdens before the pandemic, but now they face even greater risk during the COVID-19 crisis,” he said. “The SAFE Banking Act respects states’ rights and allows critical access to the banking system while making our communities safer by reducing the public safety risk associated with all-cash transactions and helping to reduce the spread of the coronavirus through banknotes and coins.”
I appreciate the ongoing support of our nation’s state treasurers. The #SAFEBankingAct respects states' rights and allows critical access to the banking system while making our communities safer and helping to reduce the spread of #COVID19 through banknotes and coins. https://t.co/Lo20gMbHPa
— Rep. Ed Perlmutter (@RepPerlmutter) July 9, 2020
The congressman said in May that he felt there was a 50-50 chance that his legislation is approved in the Senate through a COVID-19 package.
Treasurers from Alaska, California, Colorado, Illinois, Iowa, Maine, Massachusetts, Nevada, New Mexico, North Dakota, Oregon, Pennsylvania, Rhode Island, Vermont, Virgin Islands and West Virginia each signed the letter.
Another bipartisan coalition of 34 state attorneys general similarly wrote to Congress in May, urging the passage of coronavirus relief legislation that contains marijuana banking provisions.
As for the standalone cannabis banking bill, it remains pending before the Senate Banking Committee, where negotiations about the details of the proposal are ongoing.
Meanwhile, recent federal data shows that the number of banks and credit unions that are working with marijuana businesses declined slightly in the last quarter. It’s not entirely clear what’s behind that trend, however.
Separately, a House appropriations subcommittee released a spending bill this week that includes a provision that would bar the Treasury Department from using its funds to penalize financial institutions that service the industry if the business client activity is legal under state or tribal law.
Read the letter about cannabis banking from the state treasurers below:
Nine Members Of Congress Tell DEA To Revise Proposed Hemp Rule On THC Content
Nine members of Congress sent a letter to the Drug Enforcement Administration (DEA) on Tuesday, urging the agency to revise its proposed hemp regulations.
DEA released an interim final rule (IFR) for the crop in August, and it said the regulations were simply meant to comply with the 2018 Farm Bill that legalized hemp and its derivatives. But stakeholders and advocates have expressed serious concerns about certain proposals, arguing that they could put processors at risk of violating federal law and hamper the industry’s growth.
Reps. David Joyce (R-OH) and Denver Riggleman (R-VA) led the letter and pointed specifically to a provision of DEA’s IFR that could impact processing hemp extracts. The agency stipulated that “any such material that contains greater than 0.3% of Δ9-THC on a dry weight basis remains controlled in schedule I.”
That’s problematic, the lawmakers said, because in many cases the process of extracting cannabinoids from hemp temporarily causes THC levels to increase beyond that threshold. And so while Congress intended to legalize those extracts, businesses that produce the materials could find themselves inadvertently breaking the law.
I sent a letter to the @DEAHQ asking them to protect hemp producers and clarify hemp regulations.
The DEA must specify their requirements and streamline hemp directives by clarifying the legal means of processing hemp products. Read more here, #VA05:https://t.co/wGabQePrts
— Congressman Denver Riggleman (@RepRiggleman) October 21, 2020
“Our offices have received countless calls from constituents involved in the hemp industry who are extremely fearful that simply following the provisions of the Farm Bill will result in criminal liability under the IFR,” the lawmakers’ letter states. “The IFR will likely have the effect of inhibiting these nascent state hemp programs thereby harming those American companies and workers who chose to pursue careers in the hemp industry and made significant investments to effectuate those aspirations.”
Therefore, the lawmakers are “requesting a resolution to this issue as quickly as possible,” adding that “DEA must revise the IFR to eliminate the ambiguities set forth above and provide peace of mind to all Americans who have chosen to pursue a career in the hemp industry.”
Reps. Rodney Davis (R-IL), Morgan Griffith (R-VA), Glenn Grothman (R-WI), Don Young (R-AK), Anthony Gonzalez (R-OH), Earl Blumenauer (D-OR) and Matt Gaetz (R-FL) also signed the letter.
A public comment period on DEA’s proposed rules closed on Tuesday. It saw more than 3,300 submissions, many of which focused on issues with the “work in progress” hemp THC issue.
“This IFR’s criminalizes work in progress hemp extract, a fundamental component of any consumer hemp/CBD product, and will negatively impact the hemp/CBD industry at a time when financial pressure is already high,” one commenter wrote. “Hemp and subsequent extracts are not controlled substances.”
Another issue identified by more than 1,000 commenters concerns delta-8 THC. The most widely known cannabinoid is delta-9 THC, the main component responsible for creating an intoxicating effect, but delta-8 THC from hemp is also psychoactive and is an object of growing interest within the market.
Because DEA’s proposed regulations state that all “synthetically derived tetrahydrocannabinols remain schedule I controlled substances,” some feel that would directly impact the burgeoning cannabinoid, as its converted from CBD through the use of a catalyst—and that could be interpreted as a synthetic production process.
In any case, it’s not clear whether DEA deliberately crafted either of these rules with the intent of criminalizing certain hemp producers—but stakeholders and advocates aren’t taking any chances.
The U.S. Department of Agriculture (USDA) has faced separate criticism over its own proposed hemp rules, though it has been more proactive in addressing them. Following significant pushback from the industry over certain regulations it views as excessively restrictive, the agency reopened a public comment period, which also closed this month.
USDA is also planning to distribute a national survey to gain insights from thousands of hemp businesses that could inform its approach to regulating the market.
Read the congressional coalition’s letter to DEA on its hemp rule below:
Pennsylvania House Votes To Protect Medical Marijuana Patients From DUI Charges
The Pennsylvania House of Representatives approved an amendment on Tuesday that would protect medical marijuana patients from being penalized under the state’s DUI laws for using their legal medicine.
The proposal cleared the chamber as an amendment to a broader piece of legislation concerning motor vehicle policies. It passed in a 109-93 vote.
As it stands, registered medical cannabis patients can be convicted of driving under the influence of a controlled substance if THC metabolites are detected in their blood. That’s despite the fact that marijuana can remain present in the body well after someone is considered impaired.
The House-approved amendment, which is now attached to a bill previously passed by the Senate, exempts “marijuana used lawfully in accordance with” the state’s medical cannabis law from DUI statutes.
“I think that you can ask any veteran or anybody that’s using medical cannabis right now, if they took the prescription on Monday, [on] Wednesday, they’re not high,” Rep. Ed Gainey (D) said in a floor speech before the vote. “And if they got pulled over, they darned shouldn’t be charged for being intoxicated or under the influence of medical marijuana.”
Medical marijuana has helped the people of the Pennsylvania. But even if you have a medical card, you can still get a DUI even if you’re not high – if you have a trace of THC in your system. Today I fought to pass a bill that would end that. pic.twitter.com/uxj8IsuVO9
— Ed Gainey (@RepGainey) October 21, 2020
“I think we’re putting an undue burden on the people of Pennsylvania if we’re saying this is what we want to do after we fought so hard to pass medical marijuana and we know what it’s done to help the people of Pennsylvania,” he said.
The amendment is similar in intent to separate standalone legislation introduced by Sen. Camera Bartolotta (R) in June to end the “zero tolerance” DUI policy for medical marijuana.
While Pennsylvania legalized medical cannabis in 2016, with the first dispensaries opening two years later, the law has not caught up as it concerns impaired driving. A person can test positive for THC for weeks after last consuming marijuana, rendering traditional roadside tests incapable of determining active impairment.
Several legal cannabis states have enacted per se THC limits in blood, similar to blood alcohol requirements. However, evidence isn’t clear on the relationship between THC concentrations in blood and impairment.
A study published last year, for example, concluded that those who drive at the legal THC limit—which is typically between two to five nanograms of THC per milliliter of blood—were not statistically more likely to be involved in an accident compared to people who haven’t used marijuana.
Separately, the Congressional Research Service in 2019 determined that while “marijuana consumption can affect a person’s response times and motor performance… studies of the impact of marijuana consumption on a driver’s risk of being involved in a crash have produced conflicting results, with some studies finding little or no increased risk of a crash from marijuana usage.”
The modest cannabis DUI reform approved by the Pennsylvania House comes amid repeated calls from the state’s leaders to more broadly legalize marijuana for adult use.
Last week, Gov. Tom Wolf (D) in a speech stressed that marijuana reform could generate tax revenue to support the state’s economic recovery from the coronavirus pandemic and that ending criminalization is necessary for social justice.
That marked the third time in three months that the governor has held events focused on making the case for legalization. Last month, he took a dig at the Republican-controlled legislature for failing to act on reform in the previous session. And in August, he suggested that the state itself could potentially control marijuana sales rather than just license private retailers as other legalized jurisdictions have done.
Lt. Gov. John Fetterman (D), a longstanding legalization advocate, has been similarly vocal about his position. In speeches and on social media, the official has expressed frustration that Pennsylvania has yet to enact the policy change, especially as neighboring like New Jersey are moving in that direction.
He said last month that farmers in his state can grow better marijuana than people in New Jersey—and that’s one reason why Pennsylvania should expeditiously legalize cannabis before voters next door in the Garden State enact the policy change this November.
Fetterman also recently hosted a virtual forum where he got advice on how to effectively implement a cannabis system from the lieutenant governors of Illinois and Michigan, which have enacted legalization.
While Wolf initially opposed adult-use legalization, he came out in support of the reform last year after Fetterman led a statewide listening tour last year to solicit public input on the issue.
Shortly after the governor announced that he was embracing the policy change, a lawmaker filed a bill to legalize marijuana through a state-run model.
A majority of Senate Democrats sent Wolf a letter in July arguing that legislators should pursue the policy change in order to generate revenue to make up for losses resulting from the COVID-19 pandemic.
Montana Supreme Court Rejects Challenge To Marijuana Legalization Initiative
The Montana Supreme Court on Wednesday rejected a lawsuit seeking to invalidate a marijuana legalization initiative that will appear on the state’s November ballot.
With weeks before the election, opponents asked the court to quash the measure, arguing that because it involves appropriating funds, it violates state statute on citizen initiatives.
The court didn’t weigh in on the merits of the challenge; rather, it said the petitioners with the campaign Wrong for Montana (WFM) failed to demonstrate “urgency or emergency factors” that would justify moving the case into its jurisdiction instead of going through trial and appeals courts first.
It left the door open for the opponents to take its challenge through the traditional process. Brian Thompson, the attorney representing the plaintiffs, told Marijuana Moment that they now intend to file the suit in district court “soon,” but he wasn’t able to provide an exact timeline.
“We express no opinion on the merits of WFM’s constitutional challenge, nor to its right to pursue this challenge in district court,” the justices wrote. “However, WFM’s claim does not present an appropriate basis on which to invoke this Court’s original jurisdiction. Even if it did, WFM has wholly failed to establish that urgency or emergency factors make litigation in the trial courts and the normal appeal process inadequate.”
Dave Lewis, policy advisor to the pro-legalization New Approach Montana, said in a press release that this “was an easy decision for the Montana Supreme Court.”
“At best, this lawsuit was a frivolous longshot,” he said. “At worst, it was an intentional effort to create confusion right before the election.”
The measure in question would establish that adult-use marijuana system. The lawsuit did not target a separate, complementary initiative that would specify that only those 21 and older could participate in the legal market.
It is the case that state statute says citizens “may enact laws by initiative on all matters except appropriations of money and local or special laws” and that the initiative does allocate cannabis tax revenue to certain programs. But prior measures that have appeared on the state’s ballot have done so as well.
Under the proposal, half of the public revenue generated from marijuana sales would go toward environmental conservation programs—a provision that earned the campaign key endorsements last month.
The initiative is already on the ballot and voting has started, so presumably if the court had sided with the plaintiffs, the votes simply wouldn’t have been counted or implementation would have been prevented. It is also possible that a court could rule that monies raised by legal cannabis sales under the initiative would simply into the state’s general fund instead of toward the specific programs delineated in its current text.
“We’re receiving strong support from voters across the state,” Lewis, who is a former Republican state senator and former budget director for three Montana governors, said. “Instead of making a coherent argument against the initiatives, our opponents tried to deprive Montanans of their constitutional right to a citizen initiative process.”
“Our opponents are desperately throwing everything at the wall in the hope that something sticks,” he added. “They’re resorting to fear tactics and misinformation because they know that a majority of Montana voters are ready to vote yes on legalizing, regulating, and taxing marijuana for adults 21 and over.”
In neighboring Nebraska, the state Supreme Court did rule last month that a measure to legalize medical cannabis that had qualified for the November ballot could not proceed because it violated the state’s single-subject rule for ballot initiatives.
Recent polling indicates that Montana voters are positioned to approve the legalization proposal. Forty-nine percent of respondents in a survey released last week said they support the policy change, with 39 percent opposed and 10 percent remaining undecided.
This story has been updated to include comment from Thompson.
Read the Montana Supreme Court’s ruling on the marijuana challenge and the original lawsuit below: