Tax revenue from legal marijuana sales should be earmarked to fund pension programs, the mayor of Chicago said on Wednesday.
“Illinois legislators will be taking a serious look next year at legalizing recreational marijuana,” Mayor Rahm Emanuel (D) said in a speech to the City Council. “Should they follow that course, a portion of that revenue could go toward strengthening our pension funds and securing the retirement of the workers who depend on them.”
The comments stop short of the outright endorsement of legalization previewed by the Chicago Tribune, which reported in a Tuesday article that Emanuel would “call for state lawmakers to legalize marijuana.”
In fact, the mayor said during the speech that he believes “recreational marijuana has social costs that must also be considered.”
“And like a casino, revenue would take time to be realized. But if the state goes down that path, those resources can and should be used to further solidify our pensions without, again, asking anything more of Chicago taxpayers in general.”
In a document released to accompany the speech, the mayor’s office said he “recommends ensuring that Chicago shares in revenue from recreational use of legalized marijuana and allowing Chicago to raise its own revenue from marijuana by establishing a home rule taxing authority.”
Emanuel’s thoughts on how potential legal cannabis revenue should be spent come roughly a month before Gov.-elect J.B. Pritzker (D), who campaigned on ending marijuana prohibition, is set to take office. He has pledged to get to work on legalization “right away.”
Emanuel, who previously served as President Barack Obama’s White House chief of staff, had a mixed record on marijuana while a member of Congress.
He reversed his position several times on an amendment to protect state medical cannabis laws from federal interference, voting no on the measure in 2003 and 2004, before flipping to a yes vote in 2005. Then, in 2006, he reversed himself again to oppose the amendment before changing his mind one more time to support it in 2007.
As Chicago mayor, Emanuel oversaw the implementation of a 2012 local policy to avoid arrests for many low-level marijuana possession offenses.
While his new comments don’t explicitly call for the state to legalize marijuana, his focus on where revenues should be directed help to highlight the fiscal impact of doing so, and help feed a narrative that the end of prohibition in Illinois is all but certain in the near future.
A University of Illinois study released last month projected that legalizing cannabis in Illinois would create 24,000 jobs, generate more than $500 million in tax revenue and infuse about $1 billion into the state economy overall by 2020.
Photo courtesy of Daniel X. O’Neil.
Senate Schedules Second Cannabis Hearing For Next Week
A key Senate committee will hold a hearing next week to discuss hemp production, featuring witnesses from the U.S. Department of Agriculture (USDA), the Food and Drug Administration (FDA) and the Environmental Protection Agency (EPA).
In the months since hemp and its derivatives were federally legalized under the 2018 Farm Bill, there’s been strong interest in developing USDA and FDA regulations for the crop and its compounds such as CBD, and lawmakers have repeatedly pressed the agencies to speed up the rulemaking process to unlock the industry’s potential.
While the hearing notice doesn’t go into detail about what will be discussed, the meeting’s title—”Hemp Production and the 2018 Farm Bill”—and list of witnesses indicate that the conversation will revolve around the development of federal guidelines for hemp businesses.
— Sen. Ag Republicans (@SenateAgGOP) July 17, 2019
USDA Marketing and Regulatory Programs Under Secretary Greg Ibach, USDA General Counsel Stephen Vaden, FDA Principal Deputy Commissioner Amy Abernethy and EPA Assistant Administrator of Chemical Safety and Pollution Prevention Alexandra Dunn will appear before the Senate Committee on Agriculture, Nutrition, and Forestry on July 25.
I am honored to be called by the Senate Committee on Agriculture, Nutrition, & Forestry to testify next week (7/25) on “Hemp Production and the 2018 Farm Bill.” As FDA, we recognize how important the topics of hemp and cannabidiol (CBD) are to Americans. https://t.co/bHMBGth1bL
— Dr. Amy Abernethy (@DrAbernethyFDA) July 18, 2019
Other invited witnesses include Kentucky farmer Brian Furnish, National Hemp Association Executive Director Erica Stark and Red Lake Band of Chippewa Indians Tribal Chairman Darrell Seki.
The Senate Agriculture Committee meeting will mark the chamber’s second cannabis-related hearing of the week. The Committee on Banking, Housing and Urban Affairs announced on Tuesday that it will meet to discuss marijuana banking issues on July 23.
FDA and USDA have both recently signaled that they were cognizant of widespread interest in creating regulatory pathways for hemp and its derivatives, with USDA stating that it planned to release an interim final rule on the products in August and FDA’s Abernethy writing that the agency is “expediting” its rulemaking process. FDA added that it hoped to release a report on its progress by early fall.
That said, heads of the departments have also tried to temper expectations. Agriculture Secretary Sonny Perdue said that USDA wouldn’t be expediting regulatory developments but that he expected them to be issued ahead of the 2020 planting seasons.
Former FDA Commissioner Scott Gottlieb, meanwhile, cited policy complications that would make it difficult for the agency to create an alternative regulatory pathway for hemp-derived CBD products to be lawfully marketed as food items or dietary supplements. He said that without congressional action, it may take FDA years to establish those rules.
Photo courtesy of Brendan Cleak.
As More States Legalize, DEA Chops Down Fewer Marijuana Plants, Federal Data Shows
The Drug Enforcement Administration (DEA) seized far fewer marijuana plants in 2018 compared to the previous year but made significantly more cannabis-related arrests, according to federal data released this month.
More than 2.8 million indoor and outdoor marijuana plants were seized last year as part of the DEA’s Domestic Cannabis Eradication/Suppression Program. That marks a 17 percent decline from 2017 levels.
NORML first noted the DEA report, which also shows that marijuana-related arrests the agency was involved with increased by about 20 percent in a year. And while the overall number of plants that were seized dropped, DEA said that the value of the assets totaled about $52 million—more than twice as much as it reported the previous year.
State-level legalization efforts appear to have played a role in the declining number of plant seizures, particularly those cultivated outdoors. In the same year that retail cannabis sales started in California, DEA confiscated almost 40 percent fewer outdoor plants in the state compared to 2017.
That data point is consistent with recent research showing that legalization is associated with a decrease in the number of illicit cannabis grows in national forests, which are often targets for DEA enforcement action.
It’s not clear why there was a significant uptick in marijuana-related arrests, but those increases generally did not occur in states where legal cannabis systems were recently implemented.
For example, arrests in Kansas, where marijuana is strictly prohibited, increased by more than 3,500 percent—from 15 to 544—from 2017 to 2018. Louisiana likewise experienced a 168 percent increase in cannabis arrests.
The data covers federal law enforcement actions and does not include those of local police agencies that did not partner with the agency.
Year-over-year decreases in cannabis seizures through DEA’s eradication program have been viewed by advocates as evidence that state-level legalization systems effectively displace the illicit market, removing the incentive to illegally cultivate cannabis.
Similarly, a separate recent report from the U.S. Sentencing Commission showed that federal prosecutions for marijuana trafficking dropped precipitously in 2018—another sign demonstrating that state-level legalization is disrupting the illicit market, advocates argue.
NORML Deputy Director Paul Armentano told Marijuana Moment that “federal eradication programs are a holdover from a bygone era.”
“At a time when roughly one-quarter of the country resides in a jurisdiction where adult marijuana use is legal, and when members of Congress are openly discussing removing cannabis from the federal Controlled Substances Act, it is time for these federal anti-marijuana efforts to be put out to pasture and for federal agencies to take positions that more closely comport with cannabis’ rapidly changing cultural status in America,” he said.
DEA has also faced criticism of its cannabis eradication efforts from a non-partisan federal watchdog agency last year for failing to adequately collect documentation from state and local law enforcement partners funded through the program.
The Government Accountability Office said in a report that DEA “has not clearly documented all of its program goals or developed performance measures to assess progress toward those goals.”
At the same time that DEA is seizing fewer plants grown illicitly, it’s also setting higher goals for federally authorized cannabis cultivation for research purposes. In 2019, the agency said it hoped to grow approximately 5,400 pounds of marijuana to meet research demand, which is more than double its quota for 2018.
Senate Schedules Hearing On Marijuana Business Banking Access
In one of the clearest signs of marijuana reform’s growing momentum on Capitol Hill, a Republican-controlled Senate committee has scheduled a hearing for next week that will examine cannabis businesses’ lack of access to banking services.
The formal discussion in the Senate Committee on Banking, Housing and Urban Affairs on Tuesday comes as legislation aimed at resolving the marijuana industry’s financial services problems is gaining momentum. A House cannabis banking bill that cleared that chamber’s Financial Services Committee with a bipartisan vote in March now has 206 cosponsors—nearly half the body—while companion Senate legislation has 32 out of 100 senators signed on.
(Marijuana Moment’s editor provides some content to Forbes via a temporary exclusive publishing license arrangement.)