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Congressional Bills Affecting Cannabis Laws Go To Conference Committees

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Key bicameral congressional panels that will determine the fate of two far-reaching proposed cannabis measures are taking shape. At issue is whether hemp will finally become legal and whether military veterans will be able to receive medical marijuana recommendations from government doctors.

House and Senate leaders have begun making appointments to the so-called “conference committees” that will merge each chambers’ respective relevant legislation into singular proposals that can be sent to President Trump’s desk.

In both cases, the Senate legislation contains cannabis reform language while the House version is silent on the issue. The conferees on both bills will decide what gets enacted into law.

Medical Marijuana For Military Veterans

Last month, the Senate approved a wide-ranging funding bill that includes a provision to allow military veterans in medical cannabis states to get the necessary certifications from their doctors at the U.S. Department of Veterans Affairs (VA). The House’s version of the bill contains no such provision; it was blocked from reaching the floor by Republican leaders, as has been the case with every cannabis reform amendment proposed during the current Congress.

Now, a conference committee will decide which chamber’s version prevails.

Medical cannabis advocates looking at the lists of participating members will take heart in knowing that Sen. Steve Daines (R-MT), who offered the veterans medical cannabis amendment in the Appropriations Committee, will be in the room. Congressman Scott Taylor (R-VA), a military veteran who has been outspoken in support of marijuana law reform, will also be there. So will Sen. Brian Schatz (D-HI), who has posed questions about the benefits of medical marijuana during several hearings, including ones focused on veterans issues.

That said, a number of ardent marijuana opponents will be at the table, along with other lawmakers who have been skeptical of reform.

Sen. James Lankford (R-OK), who appeared in a television commercial opposing his state’s successful medical cannabis ballot measure and has sponsored a number of anti-marijuana amendments and pieces of legislation, is a member. So is Sen. Dianne Feinstein (D-CA) who has historically been one of Congress’s most vocal legalization opponents (although she has softened her stance this year amidst a reelection battle).

On the House side, Congresswoman Marcy Kaptur (D-OH), who has made a number of bizarre claims about fentanyl-laced marijuana during recent hearings and media appearances (but has supported marijuana amendments during House floor votes), will be on the committee. Congresswoman Debbie Wasserman Schultz (D-FL), who voted against an earlier version of the veterans cannabis amendment before evolving to support a subsequent version, is also a conferee.

Because the medical marijuana language is in the Senate bill, it will be up for discussion by the conference committee and has a chance of being enacted into law for the first time.

But medical cannabis supporters are not necessarily getting their hopes up, given the measure’s history. In 2016, both chambers’ bills had slightly differing provisions allowing VA medical cannabis recommendations, but both were stripped out of the final enacted legislation.

That said, advocates are working to press conferees on the issue.

“Given the incredible amount of support, both from the general public and veterans community specifically, it would be politically disastrous to vote against veterans and their ability to get access to a substance—which 22 percent are currently consuming, according to the American Legion—to alleviate symptoms of a physical or mental ailment,” NORML Political Director Justin Strekal told Marijuana Moment in an interview.

Hemp Legalization

Advocates are much more optimistic about hemp legalization this year.

Last month, the Senate voted overwhelmingly to approve large-scale agriculture legislation known as the Farm Bill, which includes provisions to finally remove hemp from the federal definition of marijuana after decades of prohibition.

The push is being driven by Senate Majority Leader Mitch McConnell (R-KY), who has spoken often about the economic benefits that industrial hemp can bring to farmers in Kentucky and other states.

On the House side, Republican leaders blocked floor votes on including hemp legalization in that chamber’s version of the Farm Bill.

So as is the case with medical cannabis recommendations for veterans, the fate of hemp’s legal status will come down to a conference committee.

There is reason for advocates to be hopeful. It is unlikely that many or any of the House Democratic conferees would strongly object to inclusion of the Senate’s legalization language.

On the Republican side, advocates were overjoyed to see Congressman James Comer (R-KY) named to the panel on Wednesday.

As Kentucky agriculture’s commissioner, Comer championed and implemented the state’s industrial hemp research program. In Congress, he has served as the lead sponsor of hemp legalization bills.

“The hemp industry has reason to celebrate — one of our most passionate advocates…was appointed — he will literally be ‘in the room where it happens,'” the Hemp Roundtable said in an alert. “As the final Farm Bill is reconciled, it is comforting to know that Rep. Comer will be on hand to support the Senate’s language which would permanently legalize hemp.”

Also among the conferees are a number of GOP lawmakers who co-sponsored a hemp bill that Comer filed in the House last year, including Congressman Bob Goodlatte (R-VA), Congressman Kevin Cramer (R-ND), Congressman Glenn Thompson (R-PA) and Congressman Rodney Davis (R-IL).

Comer told the Associated Press in an interview that he will push hard to include the hemp language in the final legislation.

“The economic viability of industrial hemp in Kentucky grows every day,” he said.

The Senate hasn’t yet appointed its conferees on the Farm Bill, but the hemp legalization proposal has broad support in the chamber and it is unlikely that Democratic or fellow GOP senators would try to buck McConnell by seeking to strip the language.

Timetable For Action

The conference committee dealing with the veterans bill was supposed to hold its first meeting last week, but that was postponed due to scheduling conflicts. A new date has not yet been set.

Current funding for the federal government is set to expire on September 30, so Congress is working to enact the veterans funding bill and other appropriations legislation before that date, though it is entirely possible that lawmakers won’t finish work in time and will need to enact a temporary extension of current provisions, known as a continuing resolution.

The 2014 version of the Farm Bill is set to expire on the same day, so the conference committee will likely move quickly once the Senate appoints its conferees, though a temporary extension is also possible on that legislation.

Whenever the committees issue their final conference reports on either bill, those will go to the floor of both chambers for up or down votes on sending the legislation to President Trump.

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.

Tom Angell is the editor of Marijuana Moment. A 20-year veteran in the cannabis law reform movement, he covers the policy and politics of marijuana. Separately, he founded the nonprofit Marijuana Majority. Previously he reported for Marijuana.com and MassRoots, and handled media relations and campaigns for Law Enforcement Against Prohibition and Students for Sensible Drug Policy. (Organization citations are for identification only and do not constitute an endorsement or partnership.)

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GOP Senator Presses Treasury Secretary On Tax Credits For Marijuana Businesses

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A Republican senator recently pressed the head of the Treasury Department on whether marijuana businesses qualify for a federal tax benefit.

During a Senate Finance Committee hearing on Wednesday, Treasury Secretary Steven Mnuchin was asked about the “opportunity zone” tax credit, which is meant to encourage investments in “distressed,” low-income communities through benefits such as deferrals on capital gains taxes.

Sen. James Lankford (R-OK), whose state’s voters approved a medical marijuana ballot measure in 2018, told Mnuchin that businesses that derive more than five percent of their profits from things like alcohol sales are ineligible for the tax credit, but there’s “not a definition dealing with cannabis businesses.”

“Are they within that five percent amount or are they not at all because there’s a federal prohibition on cannabis sales?” the senator asked.

“I’m going to have to get back to you on the specifics,” Mnuchin replied.

“That’d be helpful to get clarity because there are cannabis businesses across the country that, if they fall in opportunity zones, they’ll need clarification on that,” Lankford said. “When you and I have spoken about it before—it’s difficult to give a federal tax benefit to something that’s against federal law.”

 

Lankford, who opposes legalization and appeared in a TV ad against his state’s medical cannabis ballot measure, has raised this issue with the Treasury secretary during at least two prior hearings. When he questioned whether cannabis businesses qualify for the program last year, he clarified that he personally does not believe they should.

While Mnuchin’s department has yet to issue guidance on the issue, he said in response to the earlier questioning that his understanding is that “it is not the intent of the opportunity zones that if there is this conflict [between state and federal marijuana laws] that has not been cleared that, for now, we should not have those businesses in the opportunity zones.”

Mnuchin has also been vocal about the need for Congress to address the lack of financial resources available to state-legal marijuana businesses. Because so many of these companies are forced to operate on a largely cash-only basis, he said the Internal Revenue Service has had to build “cash rooms” to store their tax deposits.

“There is not a Treasury solution to this. There is not a regulator solution to this,” he said during one hearing. “If this is something that Congress wants to look at on a bipartisan basis, I’d encourage you to do this. This is something where there is a conflict between federal and state law that we and the regulators have no way of dealing with.”

Last week’s Finance Committee hearing was centered around President Trump’s Fiscal Year 2021 budget request, which separately includes a provision calling for the elimination of an appropriations rider that prohibits the Justice Department from using its fund to interfere in the implementation of medical cannabis laws as well as a continued block on Washington, D.C. spending its own local tax dollars to legalize marijuana sales.

American Bar Association Wants Protections For Marijuana Banking And Lawyers Working With Cannabis Clients

Photo courtesy of C-SPAN.

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American Bar Association Wants Protections For Marijuana Banking And Lawyers Working With Cannabis Clients

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The American Bar Association (ABA) approved two marijuana-related resolutions during its midyear meeting on Monday.

The group’s House of Delegates voted in favor of proposals endorsing pending federal legislation to protect banks that service cannabis businesses and calling for a clarification of rules to ensure that lawyers will not be penalized for representing clients in cases concerning state-legal marijuana activity.

Under the banking resolution, ABA “urges Congress to enact legislation to clarify and ensure that it shall not constitute a federal crime for banking and financial institutions to provide services to businesses and individuals, including attorneys, who receive compensation from the sale of state-legalized cannabis or who provide services to cannabis-related legitimate business acting in accordance with state, territorial, and tribal laws.”

ABA added that “such legislation should clarify that the proceeds from a transaction involving activities of a legitimate cannabis-related business or service provider shall not be considered proceeds from an unlawful activity solely because the transaction involves proceeds from a legitimate cannabis-related business or service provider, or because the transaction involves proceeds from legitimate cannabis-related activities.”

A bill that would accomplish this goal was approved by the House of Representatives last year, but it’s currently stalled in the Senate, where it awaits action in the Banking Committee. That panel’s chair, Sen. Mike Crapo (R-ID) is under pressure from industry stakeholders to advance the legislation, but he’s also heard from anti-legalization lawmakers who’ve thanked him for delaying the bill.

“Passage of the [Secure and Fair Enforcement] Banking Act or similar legislation will provide security for lawyers and firms acting to advise companies in the industry against having their accounts closed or deposits seized,” a report attached to the ABA resolution states. “This will also foster the rule of law by ensuring that those working in the state-legalized legitimate cannabis industry can seek counsel and help prevent money laundering and other crimes associated with off-the-books cash transactions.”

“Currently, the threat of criminal prosecution prevents most depository institutions from banking clients, including lawyers, who are in the stream of commerce of state-legalized marijuana. This Resolution is necessary to clarify that such provision of legal and other services in compliance with state law should not constitute unlawful activity pursuant to federal law.”

The second marijuana-related resolution ABA adopted on Monday asks Congress to allow attorneys to serve clients in cannabis cases without facing federal punishment.

Text of the measure states that the association “urges Congress to enact legislation to clarify and explicitly ensure that it does not constitute a violation of federal law for lawyers, acting in accord with state, territorial, and tribal ethical rules on lawyers’ professional conduct, to provide legal advice and services to clients regarding matters involving marijuana-related activities that are in compliance with state, territorial, and tribal law.”

Such a change would provide needed clarity for lawyers as more states legalize cannabis for adult use. ABA’s own rules of conduct have been a source of conflict for attorneys, as it stipulates that they “shall not counsel a client to engage, or assist a client, in conduct that the lawyer knows is criminal or fraudulent.” Federal law continues to regard marijuana as an illegal, strictly controlled substance.

An ABA report released last year made the case that there’s flexibility within that rule, however, as “it is unreasonable to prohibit a lawyer from providing advice and counsel to clients and to assist clients regarding activities permitted by relevant state or local law, including laws that allow the production, distribution, sale, and use of marijuana for medical or recreational purposes so long as the lawyer also advises the client that some such activities may violate existing federal law.”

A new report attached to the resolution states that “statutory guidance is needed that explicitly ensures that attorneys who adhere to their state ethics rules do not risk federal criminal prosecution simply for providing legal counsel to clients operating marijuana businesses in compliance with their state law.”

“This Resolution accomplishes this elegantly by harmonizing federal criminal liability with States’ ethical rules regarding the provision of advice and legal services relating to marijuana business. If a state has legalized some form of marijuana activity and explicitly permitted lawyers to provide advice and legal services relating to such state-authorized marijuana activity, such provision of advice and legal services shall not be unlawful under the Controlled Substances Act or any other federal law.”

Last year, ABA adopted another cannabis resolution—arguing that states should be allowed to set their own marijuana policies.

Border Patrol Union Head Admits Legalizing Marijuana Forces Cartels Out Of The Market

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Border Patrol Union Head Admits Legalizing Marijuana Forces Cartels Out Of The Market

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The head of the labor union that represents U.S. Border Patrol agents acknowledged on Friday that states that legalize marijuana are disrupting cartel activity.

While National Border Patrol Council President Brandon Judd was attempting to downplay the impact of legalization, he seemed to inadvertently make a case for the regulation all illicit drugs by arguing that cartels move away from smuggling cannabis and on to other substances when states legalize.

Judd made the remarks during an appearance on C-SPAN’s Washington Journal, where a caller said that “the states that have legalized marijuana have done more damage to the cartels than the [Drug Enforcement Administration] could ever think about doing.”

“As far as drugs go, all we do is we enforce the laws. We don’t determine what those laws are,” Judd, who is scheduled to meet with President Trump on Friday, replied. “If Congress determines that marijuana is going to be legal, then we’re not going to seize marijuana.”

“But what I will tell you is when he points out that certain states have legalized marijuana, all the cartels do is they just transition to another drug that creates more profit,” he said. “Even if you legalize marijuana, it doesn’t mean that drugs are going to stop. They’re just going to go and start smuggling the opioids, the fentanyl.”

One potential solution that Judd didn’t raise would be to legalize those other drugs to continue to remove the profit motive for cartels. Former presidential candidate Andrew Yang made a similar argument in December.

Federal data on Border Patrol drug seizures seems to substantiate the idea that cannabis legalization at the state level has reduced demand for the product from the illicit market. According to a 2018 report from the Cato Institute, these substantial declines are attributable to state-level cannabis reform efforts, which “has significantly undercut marijuana smuggling.”

Additionally, legalization seems to be helping to reduce federal marijuana trafficking prosecutions, with reports showing decreases of such cases year over year since states regulated markets have come online.

In his annual report last year, Supreme Court Chief Justice John Roberts also noted reduced federal marijuana prosecutions—another indication that the market for illegally sourced marijuana is drying up as more adults consumers are able to buy the product in legal stores.

Top Mexican Senator Says Marijuana Legalization Bill Will Be Approved This Month

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