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Congressional Funding Bill Protects Cannabis Banking And Lets DC Legalize Marijuana Sales

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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.

Organizations representing state National Association of State Treasurers, the National Association of Attorneys General and all 50 state banking associations have endorsed the proposal.

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.”

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.

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.

This piece was first published by Forbes.

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 15-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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Civil Rights Groups Urge Congress To Delay Marijuana Banking Vote

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A coalition of organizations including the American Civil Liberties Union, Human Rights Watch and Drug Policy Alliance is urging congressional Democratic leaders to delay a planned vote on a marijuana banking bill next week until more far-reaching legislation ending federal cannabis prohibition advances first.

“We are concerned that if the House approves this bill, it will undermine broader and more inclusive efforts to reform our country’s marijuana laws,” the groups wrote to House Speaker Nancy Pelosi (D-CA) and House Majority Leader Steny Hoyer (D-MD) in a letter on Tuesday.

Hoyer’s office confirmed to Marijuana Moment last week that the House planned to vote on the cannabis financial services legislation by the end of the month.

“The Congress has a unique opportunity to address the myriad injustices created by this nation’s marijuana laws. For decades, people of color have suffered under harsh and racially-biased marijuana laws,” the groups, which also include Center for American Progress, Leadership Conference on Civil and Human Rights and JustLeadershipUSA, wrote. “The banking bill does not address marijuana reform holistically. Instead, it narrowly addresses the issues of banking and improved access to financial services, measures that would benefit the marijuana industry, not communities who have felt the brunt of prohibition.”

The letter is the most public sign yet of a dispute that has been brewing among advocates in the marijuana policy reform movement, with some seeing a successful vote on banking legislation as demonstrating momentum for broader reform and others expressing concern that the financial services proposal primarily helps the industry and could take the wind out of the sails of a full-scale push to end prohibition.

Advocates who want broader reform have focused on a bill that House Judiciary Committee Chairman Jerrold Nadler (D-NY) filed this summer that would remove cannabis from the Controlled Substances Act and invest money into programs aimed at repairing the harms of the war on drugs, which has been waged in a racially disproportionate manner.

“Individuals and communities who are still suffering from the destabilizing collateral consequences of prohibition need reform and should not be second in line behind the industry,” Queen Adesuyi, policy coordinator for Drug Policy Alliance, told Marijuana Moment. “We need to ensure that the sequencing of federal marijuana bills, especially under House Democratic Leadership, is well thought out and done in a way that centers the millions directly impacted by overenforcement. We want to avoid the banking bill becoming Congress’ only bite at the apple for cannabis reform this session.”

Nadler’s bill, the Marijuana Opportunity Reinvestment and Expungement (MORE) Act, has been referred by House leadership to eight committees, none of which—including his own—have scheduled a vote on it. The financial services legislation—the Secure and Fair Enforcement (SAFE) Banking Act—cleared a committee with a bipartisan vote in March and has been waiting on the House calendar for floor action for months.

“It’s a difference in tactics, not desired outcomes,” NORML Political Director Justin Strekal, who supports going forward with the banking vote next week, told Marijuana Moment. “It’s our hope that the SAFE Banking vote demonstrates which members of Congress are willing to recognize the successes of state level reforms as we continue to move the MORE Act through the committee process.”

Morgan Fox, media relations director for the National Cannabis Industry Association, took a similar view.

“The SAFE Banking Act is a necessary reform that would represent a major step toward more sensible cannabis laws, and it’s looking increasingly likely that it can actually pass soon,” he said. “We have an opportunity to end policies that actively endanger people, hurt small businesses, and stymie equitable participation in the cannabis industry. Banking reform is certainly not the end of the road, and the industry is committed to working in support of far more comprehensive reforms that more fully address the harms caused by prohibition. Passage of this legislation will only add momentum to those efforts.”

But the groups signing the new letter disagree.

“Marijuana legislation must first address the equity and criminal justice reform consequences of prohibition,” they wrote to Pelosi and Hoyer.

“To be clear, we recognize the challenges facing marijuana businesses that lack access to financial services. However, we believe it is a mistake to move this issue forward while many of the other consequences of marijuana prohibition remain unresolved,” they wrote in urging the House not to vote on cannabis financial services legislation next week. “The banking bill does not solve the underlying problems of marijuana prohibition – namely, that many people of color have been saddled with criminal records for a substance that is now legal in many states, and that communities have been shut out of the emerging and booming marijuana industry.”

Meanwhile, on the other side of Capitol, Senate Banking Committee Chairman Mike Crapo (R-ID) said last week that he plans a vote on the marijuana banking bill in his panel by the end of the year. That chamber’s version of the legislation got its 33rd senator signed on this week, meaning that it now has the proactive support of a third of the body’s membership.

Because House leaders plan to bring the marijuana banking bill to the floor under a procedure known as suspension of the rules, which requires a two-thirds majority to pass, any Democratic votes lost as a result of the groups’ opposition could jeopardize the legislation. The SAFE Banking Act currently has 207 lawmakers signed on, whereas 290 votes are needed to approve a bill under suspension.

“Since the start of the 116th Congress, we have expressed concern to House Leadership, the House Financial Services Committee, and member offices, that if the banking bill moved to the Floor before broader reform, it would jeopardize comprehensive marijuana reform,” the concerned groups wrote in their letter. “Therefore, we have pushed for a conversation among advocates, Committee leadership, and House Leadership to formulate a plan for moving marijuana legislation in a way that is comprehensive and does not result in carve-outs for the industry and leave behind impacted communities.”

“We ask that you delay any vote on the banking bill until agreement has been reached around broader marijuana reform,” they said.

Read the full letter urging a delay on the marijuana banking vote below:

Groups Oppose Marijuana Ban… by Marijuana Moment on Scribd

This story has been updated to include comment from Drug Policy Alliance and National Cannabis Industry Association.

Mitch McConnell Tells FDA To Clear A Path For CBD Products Though Spending Bill Directive

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Bernie Sanders Asks Campaign Rally Audience To Share Stories About Marijuana Arrests

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Sen. Bernie Sanders (I-VT) asked an audience in South Carolina to share stories about marijuana possession convictions and then argued that those anecdotes help to demonstrate the case for national legalization.

During a campaign stop in the early primary state on Sunday, the 2020 Democratic presidential candidate asked people to raise their hands if they knew someone who’d been arrested for possessing cannabis. There was no shortage of hands raised.

“Holy God, whoa. That’s a lot of people,” Sanders said before asking for volunteers to go into detail.

“I got caught with about a joint and they took my license for a year and I lost my job,” an audience member said. “Ended up losing my house, and it went worse from there.”

“Wow, this is for smoking a joint?” Sanders asked.

“Yeah, I had a little—like a dime bag in my car,” the person said.

Another person in attendance who appeared in the campaign video Sanders released on Tuesday said that she visited a guilty plea court and witnessed “three different men get put in at least two years of prison just for anywhere from two grams to eight grams of marijuana found on them.”

“That’s why all over this country states are doing the right thing and either decriminalizing or legalizing the possession of marijuana,” Sanders said to applause.

Since becoming the first major party presidential candidate to call for cannabis legalization in 2015, Sanders has continued to place an emphasis on the need for marijuana reform, with a focus on the racial injustices of prohibition.

Last month, he released a criminal justice reform plan that included proposals to legalize cannabis federally and also provide for safe injection sites to curb opioid overdoses.

But while Sanders has been a leading voice in the drug policy reform movement, he’s said twice in recent weeks that he’s not ready to embrace decriminalizing possession of drugs beside marijuana.

Joe Biden Says Marijuana Should Remain Illegal As A Misdemeanor At Democratic Debate

Photo courtesy of Lorie Shaull.

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New York Gov. Cuomo Hints Marijuana Smoking Ban Could Be Part Of Next Legalization Push

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New York Gov. Andrew Cuomo (D) seemed to suggest that he might want a ban on smoking marijuana included in legalization legislation when lawmakers take up the issue again next year.

During an interview with MSNBC on Sunday, the governor was asked whether the spike in apparent vaping-related lung injuries and deaths, which experts attribute to altered nicotine and cannabis oils primarily purchased on the illicit market, has made him reconsider pursuing legalization in the state.

“No,” he said, adding that his administration is “not in favor of smoking marijuana” and that there are “ways to get THC without smoking marijuana.”

“People are vaping THC, yes that is true,” Cuomo said. “We think that from a public health point of view, that is not something that we recommend and we think it’s dangerous—smoking of any kind.”

“You can legalize marijuana and sell THC in compounds that do not require you to smoke the marijuana, and we do not support smoking of marijuana,” he said. “There are compounds that have the THC, which is a compound in marijuana, that you don’t smoke.”

It’s not entirely clear if Cuomo plans to ask for a smoking ban the next time a legalization bill emerges or if he was simply outlining an administrative position advising against smoking. A spokesperson for his office did not respond to Marijuana Moment’s request for comment by the time of publication.

But while there was no ban on marijuana smoking included in legalization legislation that he worked to pass earlier this year, it wouldn’t be entirely out of character given that he pushed for such a restriction as part of New York’s medical cannabis program in legislation enacted in 2014.

The logic behind that policy, according to Cuomo, was that it would prevent people from abusing the program. If he moved to incorporate a ban for adult-use legalization, however, it would presumably be a public health decision.

That could create problems when lawmakers return to the negotiating table. In California, flower and concentrates represent about 70 percent of the marijuana market, meaning any attempt to ban smokeable cannabis will likely be met with pushback from consumers, industry stakeholders and civil liberties-minded reform advocates.

Industry players seemed to have influence when Cuomo included a ban on home cultivation for personal use in his prior legalization proposal—something a major medical cannabis association recommended in a policy statement submitted to the governor.

For the time being, however, there don’t seem to be tangible plans to include a smoking ban in future cannabis legislation and it could be that the governor simply ends up pushing for public education campaigns discouraging the activity rather than keeping it illegal.

Cuomo has made clear that legalization would again be an administrative priority after negotiations failed to produce a passable bill last session.

In July, he signed legislation broadening New York’s decriminalization law and creating a pathway for expungements for individuals with prior cannabis convictions.

Former White House Drug Czar Offers Marijuana Legalization Advice To Mexico

Photo courtesy of MSNBC.

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.
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