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.
Top Trump Campaign Spokesman: Marijuana Must Be ‘Kept Illegal’
Asked in a new interview about President Trump’s position on changing federal marijuana laws, a top reelection campaign aide said the administration’s policy is that cannabis and other currently illegal drugs should remain illegal.
“I think what the president is looking at is looking at this from a standpoint of a parent of a young person to make sure that we keep our kids away from drugs,” Marc Lotter, director of strategic communications for the Trump 2020 effort, said in an interview with Las Vegas CBS affiliate KLAS-TV.
(Marijuana Moment’s editor provides some content to Forbes via a temporary exclusive publishing license arrangement.)
Photo courtesy of Gage Skidmore.
Virginia Marijuana Decriminalization Gets Closer To Governor’s Desk With New Amendments
One week after bills to decriminalize marijuana in Virginia were passed by both the House and Senate, they advanced again on Wednesday in committee votes, where they were revised in an effort to ease the path to the governor’s desk.
The goal was to make the language of the bills identical, with lawmakers hoping to streamline the process by avoiding sending differing pieces of decriminalization legislation to a bicameral conference committee to resolve differences.
The House of Delegates and Senate were under pressure to approve their respective versions of decriminalization ahead of a crossover deadline last week. After clearing floor votes in their respective chambers, the Senate-passed bill was sent to the House Court of Justice Committee, while the House’s legislation was referred to the Senate Judiciary Committee.
Those panels amended the bills and advanced them on Wednesday, with senators voting 10-4 to advance the revised legislation and delegates voting 8-5. However, the Senate panel also struck a part of the text of a compromise substitute version concerning a record clearing provision while the House committee accepted the substitute as offered.
That means it will be up to the Finance Committees to resolve the remaining differences if lawmakers hope to skip the conference step prior to full floor votes in both chambers.
Regardless of the unexpected complication, advocates said the new committee actions represent a positive development.
“Fortunately, the patrons were able to reach a consensus and move the bills forward,” Jenn Michelle Pedini, executive director of Virginia NORML, told Marijuana Moment. “Virginians have waited long enough for this important step, one that will dramatically reduce both marijuana arrests and the collateral consequences that follow such charges.”
The legislation as amended would make possession of up to one ounce a civil penalty punishable by a $25 fine without the threat of jail time. Currently, simple possession is punishable by a maximum $500 fine and up to 30 days in jail.
A provision that would have allowed courts to sentence individuals to up to five hours of community service in lieu of the civil penalty was removed with the latest revisions. The bill also stipulates that juveniles found in possession of cannabis will be treated as delinquent, rather than go through a less punitive process for a “child in need of service.”
Language providing a means to seal prior records for marijuana convictions was successfully reinserted into the House Courts of Justice Committee-passed bill after it was previously removed and placed in a separate expungement bill. That latter legislation is stalled, so lawmakers put it back into the decriminalization measure via the substitute to ensure its enactment.
The Senate Judiciary moved to delete that section, however, creating complications for avoiding a conference committee.
Meanwhile, the House Rules Committee voted in favor of a separate Senate-passed resolution on Wednesday that calls for the establishment of a joint commission to “study and make recommendations for how Virginia should go about legalizing and regulating the growth, sale, and possession of marijuana by July 1, 2022, and address the impacts of marijuana prohibition.” That vote was 12-5.
That’s a significant step, as the legislature is generally reluctant to enact bold reform without first conducting a study on the issue.
While Gov. Ralph Northam (D) is in favor of decriminalization, including a call for the policy change in his State of the Commonwealth address last month, he’s yet to embrace adult-use legalization. That said, Attorney General Mark Herring (D), who is running to replace the term-limited governor in 2021, said he’s optimistic that Northam will come around on the issue.
Herring organized a cannabis summit late last year to hear from officials representing states that have already legalized marijuana. That’s one tool he said the governor could use as he considers broader reform.
Also on Wednesday, the House Courts of Justice Criminal Subcommittee advanced another Senate-passed bill to formally legalize possession of CBD and THC-A medial cannabis preparations that are recommended by a doctor, an expansion of the current policy simply offers patients arrested with it an affirmative defense in court.
For now, Virginia seems to be on the path to become the 27th state to decriminalize marijuana, and the first to do so in 2020. Last year, three states—New Mexico, Hawaii and North Dakota—also approved the policy change.
Alabama Lawmakers Approve Medical Marijuana Legalization Bill
An Alabama Senate committee approved a bill on Wednesday that would legalize medical marijuana in the state.
The legislation would allow patients with qualifying conditions to purchase cannabis products from licensed dispensaries. It would be a limited system, however, prohibiting patients from smoking or vaping marijuana.
The Senate Judiciary Committee cleared the bill in a 8-1 vote, with one abstention. The next stop for the legislation will be the Senate floor.
The proposal would establish the Alabama Medical Cannabis Commission, which would be responsible for overseeing a patient registry database, issuing medical cannabis cards and approving licenses for marijuana dispensaries, cultivators, transporters and testing facilities.
This vote comes two months after a panel created by the legislature, the Medical Cannabis Study Commission, issued a recommendation that Alabama implement a medical cannabis program.
The full Senate approved a medical cannabis legalization bill last year, but it was diluted in the House to only provide for the establishment of the study commission. Sen. Tim Melson (R) sponsored both versions of the legislation and served as chairman of the review panel.
The current bill has been revised from the earlier version. For example, this one does not require patients to exhaust traditional treatment options before they can access medical cannabis.
The committee also approved a series of amendments by voice vote, including several technical changes to the bill. Another one would shield physicians from liability for recommending medical cannabis. One would clarify that employees are ineligible for workers’ compensation for accidents caused by being intoxicated by medical cannabis, which is the same standard as other drugs.
Watch the Alabama Senate Judiciary Committee debate and vote on medical cannabis below:
Members also agreed to an amendment creating a restriction on who can be on the cannabis commission.
While it’s not clear how the House would approach the bill if it advances to the chamber this year, the speaker said this week that he’s “in a wait and see mode” and commended Melson for his work on the measure. The state’s attorney general, meanwhile, sent a letter to lawmakers expressing opposition to the reform move.
Under the measure, patients suffering from 15 conditions would qualify for the program. Those include anxiety, cancer, epilepsy and post-traumatic stress disorder. Patients would be able to purchase up to a 70-day supply at a time, and there would be a cap of 32 dispensaries allowed in the state.
Prior to the vote, committee heard from a series of proponents and opponents, including parents who shared anecdotes about the therapeutic benefits of cannabis for their children. Interest in the reform move was so strong that an overflow crowd has to be moved to a separate hearing room.
“Sometimes people are not able to empathize with others who have gone through something. I guarantee you if one of relatives, members of the legislature, went through something like the testimonies that we’ve heard today, they would want it,” Sen. Vivian Figures (D) said. “But they would probably have the means to fly somewhere and get it.”
One thing we're watching on Goat Hill today is the medical marijuana bill. Alabama is one of only 17 states where medical cannabis remains illegal. https://t.co/V8CK8nm6mm
— Alabama Democrats (@aldemocrats) February 19, 2020
There would be a number of restrictions under the bill when it comes to advertising. It would also require seed-to-sale tracking for marijuana products, set packaging and labeling requirements and impose criminal background checks for licensed facility employees.
A nine percent tax would be levied on “gross proceeds of the sales of medical cannabis” sold at a retail medical cannabis dispensary. Part of those funds would go toward creating a new Consortium for Medical Cannabis Research, which would provide grants to study the plant.
Last year, the Senate Judiciary Committee also approved a bill to decriminalize marijuana.
Photo courtesy of Philip Steffan.