Federal officials would be blocked from punishing banks for working with marijuana businesses under an annual spending bill released by congressional Democratic leaders on Sunday.
The legislation, which is set to be considered by a House subcommittee on Monday, would also remove a longstanding rider that prevents the city of Washington, D.C. from spending its own money to legalize and regulate recreational cannabis sales.
Bill Protects Banks That Work With Marijuana Businesses
Although a growing numbers of states are moving to legalize and regulate marijuana—with Illinois lawmakers becoming the latest to pass a bill ending cannabis prohibition on Friday—many banks remain reluctant to work with licensed businesses in the industry out of fear of being subject to ongoing federal penalties.
Those hesitations could be at least partially allayed by the new House bill, which includes language barring federal regulators from punishing financial services providers for maintaining accounts for state-legal cannabis businesses:
SEC. 633. None of the funds made available in this Act 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, and engages in such activity pursuant to a law established by a State, political subdivision of a State, or Indian Tribe: Provided, That the term ‘‘State’’ means each of the several States, the District of Columbia, and any territory or possession of the United States.
The provision only applies to spending legislation covering the Treasury Department, however, and thus would not shield banks from any enforcement activities carried out by the Justice Department, which is funded under a separate bill. It is also attached to the annual appropriations process, meaning it would have to be proactively renewed year after year if it is enacted.
Meanwhile, though, a more comprehensive and permanent proposal to shield banks from being punished for serving cannabis businesses is advancing in Congress.
In March, the House Financial Services Committee approved the bill, known as the Secure And Fair Enforcement (SAFE) Banking Act, in a bipartisan vote of 45 to 15. Advocates expect that House Democratic leadership will bring the legislation, which currently has 191 cosponsors—nearly half of the chamber’s membership—to the floor within the next several weeks.
An identical proposal in the Senate has 30 lawmakers—almost a third of the body’s members—signed on. While Banking Committee Chairman Mike Crapo (R) has so far refused to commit to bring the bill up for a hearing in his panel, pressure is mounting.
Last month, the Congressional Budget Office issued a report projecting that the bill would generate an increase in deposits in banks and credit unions, and would ultimately lead to savings for the federal government after initial implementation expenses are accounted for.
And a handful of other Republican senators, including at least one who is a member of Crapo’s committee, have lobbied him to give the cannabis banking bill due consideration.
In 2014, the House of Representatives approved a floor amendment similar to the provision currently included in the new spending bill, but it was not enacted into law. The full House Appropriations Committee defeated a cannabis banking rider last year under Republican control, so its inclusion in the base subcommittee legislation as introduced by Democrats marks a significant shift.
“The provision takes another step to protect financial institutions who are providing services to cannabis-related legitimate businesses,” Rep. Ed Perlmutter (D-CO), chief sponsor of the standalone cannabis banking bill, said of the new appropriations rider. “I look forward to the House passing the SAFE Banking Act soon so we can fully address the issue and get this cash off the streets.”
This provision takes another step to protect financial institutions who are providing services to legitimate marijuana businesses. I look forward to the House passing the #SAFEBankingAct soon so we can fully address the issue & get cash off the streets.https://t.co/HDp9DQoaol
— Rep. Ed Perlmutter (@RepPerlmutter) June 3, 2019
Legalization advocates agreed that the spending bill language was a good sign but that the broader bill’s passage is still needed.
“The inclusion of cannabis banking reform language in the Appropriations bill is indicative of the level of support this issue has in Congress,” Morgan Fox, medial relations director for the National Cannabis Industry Association, said, “If passed, this would only be a temporary fix and should not be viewed as a substitute for the SAFE Banking Act, but could provide the cannabis and banking industries with a much-needed reprieve while stand-alone legislation gains more support in the Senate.”
D.C. Could Finally Spend Its Own Money To Legalize Cannabis Sales
The draft House appropriations bill also removes a provision that for years has blocked the city government in the nation’s capital from spending its own locally raised tax dollars to legalize and regulate the production and sales of marijuana.
Washington, D.C. voters approved a ballot measure in 2014 that allows low-level possession and home cultivation of cannabis, but consumers who are not medical marijuana patients have no legal way to purchase the drug. That’s because Congress has repeatedly enacted an appropriations rider pushed by Rep. Andy Harris (R-MD) that stands in the way.
Here’s how the anti-marijuana rider appeared in last year’s version of the spending legislation:
Sec. 809. (a) None of the Federal funds contained in this Act may be used to enact or carry out 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 (21 U.S.C. 801 et seq.) or any tetrahydrocannabinols derivative.
(b) No funds available for obligation or expenditure by the District of Columbia government under any authority may be used 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 (21 U.S.C. 801 et seq.) or any tetrahydrocannabinols derivative for recreational purposes.
In addition to completely deleting the language standing in the way of D.C. using local money to pay for marijuana legalization, the legislation as introduced also cuts out the provision blocking the use of federal funds to lower cannabis penalties.
Last month, District of Columbia Mayor Muriel Bowser (D) referred a marijuana legalization bill to councilmembers in anticipation of Congress removing the ban under the newly Democratic-controlled House of Representatives. She cheered the new congressional legislation in a tweet on Sunday.
Illinois just approved legal sales of #marijuana for adults
Now, the @AppropsDems have a bill to remove the reprehensible rider so that we will be able to legalize/regulate its sale
— Muriel Bowser (@MurielBowser) June 3, 2019
The spending proposal, as introduced by the House Appropriations Subcommittee on Financial Services and General Government, if approved by that panel, would next head to the full Appropriations Committee and then to the House floor. It could be amended at either stage and will later be merged with parallel legislation in the Republican-controlled Senate, meaning that it is far from certain that the marijuana policy implications in the initial House draft will be enacted into law as currently drafted.
Still, their inclusion in the base bill on the House side bodes well for legalization advocates, as the Senate Appropriations Committee has historically been more favorable to cannabis amendments—even under GOP control—than its House counterpart has, although it did block consideration of a banking-related provision last year.
And while the Senate panel issued initial versions of the spending legislation free of D.C.-related marijuana riders in years past, in 2018 it included the ban under new subcommittee chairman Sen. James Lankford (R-OK), who opposes cannabis reform.
The pending appropriations bill covers Fiscal Year 2020, which begins on October 1.
Congress Votes To Block Feds From Enforcing Marijuana Laws In Legal States
The House of Representatives approved a far-reaching measure on Thursday to prevent the Department of Justice from interfering with state marijuana laws, including those allowing recreational use, cultivation and sales.
The amendment, which also shields cannabis laws in Washington, D.C. and U.S. territories, is now attached to a large-scale appropriations bill to fund parts of the federal government for Fiscal Year 2020.
(Marijuana Moment’s editor provides some content to Forbes via a temporary exclusive publishing license arrangement.)
Watch Live: Congressional Committee Discusses Medical Marijuana And Military Veterans
A congressional committee held a hearing on four bills that concern veterans and medical marijuana on Thursday.
The House Veterans’ Affairs Committee discussed one piece of legislation that would allow doctors at the U.S. Department of Veterans Affairs (VA) to issue medical cannabis recommendations in states where it’s legal. That bill was introduced by Rep. Earl Blumenauer (D-OR).
The panel also took up a bill sponsored by Rep. Lou Correa (D-CA) that would require VA to conduct clinical trials on the therapeutic potential of cannabis in the treatment of conditions such as post-traumatic stress disorder and chronic pain.
“The men and women that I meet back home vouch for the therapeutic benefits of medical cannabis and support further research into the issue,” Correa said in testimony prepared for the hearing. “The legislation provides a framework for that research to ensure a scientifically-sound study on the issue.”
“Cannabis must be objectively researched. Period,” Rep. Mark Takano (D-CA), chair of the committee, said in support of the legislation. “Medicinal cannabis may have the potential to manage chronic pain better than opioids and treat PTSD.”
Rep. Phil Roe (R-TN), ranking member on the committee, agreed that VA should be studying the therapeutic potential of cannabis for veterans but complained that the proposed bill is excessively prescriptive. The congressman, who introduced a similar piece of legislation in January, said lawmakers shouldn’t “be telling the scientists how to design their studies.”
Other legislation that came up for consideration was a bill from Rep. Seth Moulton (D-MA), a 2020 presidential candidate, that would provide training on medical cannabis for VA health practitioners.
Finally, the committee heard testimony on another Moulton proposal that would require VA to conduct a survey to “measure cannabis use by veterans.”
Watch the hearing below:
Witnesses who testified before the committee include Adrian Atizado, deputy national legislative director of Disabled American Veterans (DAV), Travis Horr, director of government affairs with Iraq and Afghanistan Veterans of America (IAVA) and Carlos Fuentes, director of national legislative service for Veterans of Foreign Wars (VFW).
The VFW representative said the organization supports all but one of the cannabis bills. While the group agrees with the intent of allowing VA doctors to recommend cannabis, it “believe it is unacceptable for VA providers to recommend a treatment that they are unable to provide veterans and force patients to pay for the full cost of such care.”
"VA must expand research on the efficacy of non-traditional alternatives to opioids, such as medicinal cannabis and other holistic approaches. " #VFWTestimony
— VFW National HQ (@VFWHQ) June 20, 2019
DAV voiced support for legislation requiring VA to study medical cannabis and also to survey veterans on their marijuana usage.
“DAV supports @DeptVetAffairs research on conditions related to military service and effective treatments to help #veterans recover, rehabilitate and improve the overall quality of their lives…many veterans report the use of medicinal #cannabis for these purposes is beneficial.” pic.twitter.com/29C9WCw0Di
— DAV National HQ (@DAVHQ) June 20, 2019
And IAVA came out in strong support for the research bill. In testimony, the group said that “without research done by VA surrounding cannabis, veterans will not have conclusive answers to ways cannabis might aide their health needs. This is unacceptable.”
“VA houses some of the most innovative and best-in-class research this country has to offer. It should not be shutting its doors on a potentially effective treatment option because of politics and stigma,” the group said. “Our nation’s veterans deserve better.”
Larry Mole, chief consultant of population health services at the federal Veterans Health Administration, testified that VA opposes all four of the cannabis bills.
He expressed concerns that VA doctors would be penalized if they recommend medical cannabis, that the research requirement would be excessively onerous and that VA is already studying marijuana, that VA doctors already have access to training materials on the subject and that the proposed anonymous survey would require veterans to disclose information that could make them identifiable.
“The legislation would prescriptively define how the surveys would be conducted, but it does not provide the purpose, goals, or objectives for the surveys,” he said. “We have significant concerns that veterans will not want to participate, despite the survey being anonymous.”
Several committee members pressed Mole on VA’s current research efforts, noting the widespread support among veterans to study the medicinal benefits of marijuana.
Rep. Mike Levin (D-CA) said that he meets with veteran constituents each week and asked the VA representative, “[w]hat am I to tell them when they ask when is this [research] actually going to happen?”
“When is this research going to occur? When is the VA going to listen to the 92 percent of veterans across all political stripes and ideologies that want to see this done?” he said.
Mole pointed to the single ongoing VA clinical trial that just recently recruited its first participant focusing on the benefits of CBD for post-traumatic stress disorder. He encouraged Levin to tell his constituents to look up the study and apply to participate if they were interested.
Rep. Andy Barr (R-KY) characterized the VA’s study as “a baby steps approach” to the issue given that CBD alone isn’t representative of the products that veterans are using in the commercial market.
After the House Veterans’ Affairs Subcommittee on Health held a hearing on several of the cannabis proposals in April, the full committee was set to vote on two marijuana measures last month. That hearing was cancelled, however.
Blumenauer is also pursuing cannabis reform for veterans through a different vehicle: an appropriations bill that’s being debated on the House floor this and next week. He introduced an amendment that would prohibit VA from “interfering with a veteran’s participation in a state medical cannabis program, denying a veteran who participates in a state medical cannabis program from being denied VA services, and interfering with the ability of VA health care providers to recommend participation in state medical cannabis programs.”
This was the second congressional committee hearing on marijuana-related issues this week. On Wednesday, the House Small Business Committee met to discuss challenges and opportunities for entrepreneurs in the emerging cannabis industry.
This story has been updated to include additional testimony from witnesses.
House Passes Amendments Stripping DEA Funding And Pushing FDA To Regulate CBD
Two drug policy amendments cleared the House of Representatives on Thursday, building on reform victories in the chamber the day before.
One measure addresses funding for the Drug Enforcement Administration (DEA) and the other would direct the Food and Drug Administration (FDA) to establish regulations for adding CBD to foods and dietary supplements.
The first amendment, introduced by Rep. Alexandria Ocasio-Cortez (D-NY), would transfer $5 million from the DEA to an opioid treatment program. It passed without opposition on a voice vote and is now be attached to the House version of a large-scale spending bill, but it remains to be seen how the Senate will set funding levels for the agency in its own version of the funding legislation.
“I offer this amendment because ending the war on drugs has to mean changing our priorities in order to keep all communities safe and healthy,” Ocasio-Cortez said. “The best way we do that is by offering people the help and support they need before arrest and criminalization should be considered in the first place.”
She added that the DEA is still receiving $2.36 billion in funding, which is $90 million higher than was appropriated for the last fiscal year. It’s also about $78 million higher than President Trump requested in his budget.
Rep. Jose Serrano (D-NY), the chairman of an appropriations subcommittee that handles Justice Department funding, rose in support of the amendment, stating that opioids “are a serious threat to the health and wellbeing of our communities, and we must do everything we can to combat this epidemic.”
Michael Collins, director of national affairs for the Drug Policy Alliance, told Marijuana Moment that the successful vote “should send a message to the DEA—it’s not business as usual anymore.”
“We want to end the drug war and we will fight for it. We will drain you dollar-by-dollar, cent-by-cent, if that’s what it takes,” he said.
Rep. Robert Aderholt (R-AL) claimed time designated for the opposition on the floor but said he supports the amendment. The congressman did note, however, that funding for opioid abuse prevention grants has increased by 360 percent since 2017 and that “we want to work with both sides to make sure we have the appropriate funds necessary to make sure we fight this opioid addiction that has taken over so many parts of the country.”
In closing, Ocasio-Cortez said “just as the epidemic is exploding so should our commitment to address this problem.”
“We have overfunded one agency and we should move that to make sure that we are getting people the care they need,” she said.
Dan Riffle, senior counsel and policy advisor in Ocasio-Cortez’s office told Marijuana Moment that the amendment is “a good start, but it’s not enough.”
“Every dollar we waste trying and failing to reduce supply is a dollar that should be spent on treatment and demand reduction,” he said.
This is the second drug policy amendment the freshman congresswoman has introduced that’s been brought to the House floor. However, her earlier proposal, which was meant to lift barriers to research for psychedelic substances such as psilocybin and MDMA, was rejected when it came up for a vote as part of separate appropriations legislation last week.
The FDA amendment, introduced by Rep. Jerry McNerney (D-CA), was approved as part of an en bloc voice vote combining other relatively noncontroversial measures and it did not receive debate on the floor. The measure aims to resolve a problem that the FDA has repeatedly raised since hemp and its derivatives were federally legalized under the 2018 Farm Bill.
Because CBD exists as an FDA-approved drug and has never been allowed in the food supply before, the agency’s former commissioner said Congress may have to pass separate legislation to provide for its lawful marketing.
The amendment’s description directs FDA to “undertake a process to make lawful a safe level for conventional foods and dietary supplements containing cannabidiol (CBD) so long as the products are compliant with all other FDA rules and regulations.”
Two other drug policy amendments were debated in the chamber on Wednesday. A measure that would block the Justice Department from using its funds to intervene in state marijuana laws was approved on a voice vote but still needs to pass in a recorded vote; another that extends similar protections to tribal cannabis programs passed without a request for a recorded vote.
This story was updated to include comment from Riffle.
Photo courtesy of Philip Steffan.