A congressional committee will hold a hearing next week to discuss opportunities for small businesses and entrepreneurs from disadvantaged communities in the burgeoning marijuana industry and the challenges the state-legal market faces.
The announcement from the House Small Business Committee was posted on Wednesday. The hearing, titled “Unlocked Potential? Small Businesses in the Cannabis Industry,” will take place on June 19, according to the notice.
Though cannabis remains illegal at the federal level, the committee underscored the enormous economic potential of the market as more states opt to legalize marijuana and regulate its sale.
“The hearing will focus on the opportunities the legitimate cannabis industry presents for small businesses in states with legal cannabis, as well as entrepreneurs from traditionally underserved communities,” the notice states.
Members will also get the chance to learn about how the unique challenges that small cannabis businesses—as well as ancillary businesses that aren’t directly involved in marijuana production or distribution—face under the current regulatory model.
There’s a growing interest among lawmakers in providing basic financial resources to cannabis businesses that are operating in compliance with state law.
Leadership on the Small Business Committee sent a letter to the head of the federal Small Business Administration (SBA) on Wednesday, outlining their concerns about existing policies that bar marijuana businesses as well as those that are indirectly involved in the industry from accessing capital and other resources that the administration offers.
— House Committee on Small Business (@HouseSmallBiz) June 12, 2019
The exclusion of “Indirect Marijuana Businesses” from these services “carries with it potentially severe unintended consequences for America’s small business sector,” they wrote.
“As increasingly more states legalize marijuana and Congress, states, and regulators continue recognizing the legitimacy of the industry, it will be important for Congress and the agencies it oversees to work cooperatively to further ease policies on Direct and Indirect Marijuana Businesses where appropriate. We therefore look forward to working with you to find solutions that will minimize burdens and maximize access to capital for small businesses looking to engage in this emerging industry.”
Last month, Sen. Jacky Rosen (D-NV) also questioned a member of the SBA during a committee hearing about whether existing federal laws are inhibiting the growth of the marijuana industry and whether small cannabis businesses and entrepreneurs stand to benefit from gaining access to SBA resources.
Nevada’s cannabis industry cannot thrive without access to financial services. At yesterday’s @SmallBizCmte hearing, I asked what steps @SBAgov is taking to break down regulatory barriers for our nation’s legal marijuana businesses to ensure they can continue to grow. pic.twitter.com/lyfXGwpoRf
— Senator Jacky Rosen (@SenJackyRosen) May 24, 2019
Those resources include everything from financing programs that give businesses access to capital to low-cost training for individuals interested in starting a business.
The SBA official said at the time that the administration hadn’t studied the matter due to federal prohibition.
But the Small Business Committee apparently isn’t letting the issue fall to the wayside. Members will hear testimony from stakeholders including the Minority Cannabis Business Association’s Shanita Penny, Eric Goepel of the Veterans Cannabis Coalition and Dana Chaves, who is an executive at First Federal Bank and also chairs the National Cannabis Industry Association’s (NCIA) Banking Access Committee.
“Access to SBA funds would be a lifeline for small businesses and startups in the cannabis industry, particularly those in marginalized communities that have been most impacted by prohibition,” Morgan Fox, media relations director for NCIA, told Marijuana Moment.
“It is a great sign of where federal policy is heading that the Committee on Small Business is exploring these issues and is concerned with the viability of smaller operators in the cannabis space, as well as ensuring equitable access to the industry,” he said.
Read the full letter the the Small Business Committee sent to SBA below:
Photo courtesy of Philip Steffan.
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.
FBI Seeks Tips On Marijuana Industry Corruption
The Federal Bureau of Investigation (FBI) is actively seeking tips on public corruption related to the marijuana industry, it announced on Thursday.
“States require licenses to grow and sell the drug—opening the possibility for public officials to become susceptible to bribes in exchange for those licenses,” FBI Public Affairs Specialist Mollie Halpern said on a short podcast the bureau released. “The corruption is more prevalent in western states where the licensing is decentralized—meaning the level of corruption can span from the highest to the lowest level of public officials.”
(Marijuana Moment’s editor provides some content to Forbes via a temporary exclusive publishing license arrangement.)