Top Connecticut lawmakers announced on Friday that they have finally reached a deal on a bill to legalize marijuana, and they’re now circulating the finalized language among members ahead of votes that are expected soon.
Following weeks of talks with Gov. Ned Lamont’s (D) office, House Majority Leader Jason Rojas (D) said negotiators now have a “pencils down” agreement. But lawmakers will need to move quickly if they hope to pass the legislation ahead of Wednesday’s end of session deadline.
“Now we can actually go to people and say this is the final product,” House Speaker Matt Ritter (D) said.
“We’re done negotiating and taking all the wonderful ideas that people have wanted to contribute to this piece of legislation,” Rojas added.
But while the lawmakers gave some detail about the basic components of the proposal, the text is still not publicly available.
Watch the House leaders discuss the marijuana legalization deal, around 14:40 and 21:40 into the video below:
The main changes that have been worked into the legislation have been “strengthening our attempts to ensure that this new marketplace is really open to as broad a spectrum of individuals who want to enter that marketplace than just having large corporate or over-capitalized interest dominating the market,” Rojas said.
Ritter emphasized that the bill will need to move “quickly” to the Senate floor, and that needs to happen before Wednesday in order to avoid having opponents kill the measure by running out the clock.
Asked about the prospects of garnering bipartisan support, the majority leader said Republicans “live up to libertarian values that I think some of them hold, yes, but we’ll see.”
“It’s an almost 300-page document—one of the most complicated pieces of legislation I’ve ever been involved with, we’re standing up an entirely new market,” he said. “And certainly there’s been a lot of interest from multiple parties within the legislature, within the administration, lots of advocates out there.”
He added that legislative staff worked with the governor’s team until 2:30 AM on Friday morning to get the deal done.
But pressed on details about the proposal that were reported by CT Post earlier this week, Rojas declined to confirm the accuracy of the article, though he did give some details, including that recreational sales would be expected to start by May 2022.
“I think it’s like any major piece of legislation. There are going to be people who are happy with it, there will be people who are less than happy with it. You take the good with the bad,” he said. “A lot of compromises have been made, we all know that—a lot of tension and a lot of emotion went into this legislation this year. I think, overall, people are going to see an adult-use cannabis bill that is perhaps the best in the country.”
But in order to meet that high standard, advocates are looking for especially strong equity components to right the wrongs of prohibition. And the early details that have surfaced are not satisfying those activists.
Specifically, they’re taking issue with a proposal to make it so those who qualify as equity business applicants would have to partner up with existing medical cannabis firms in the state to learn the trade.
In order to obtain an adult-use license, the state’s four current medical cannabis cultivators could pay a $2 million fee or a reduced payment if they enter into such equity partnerships.
Equity businesses would be defined as those that are owned by people who grew up or live in certain zip codes and who have annual income of less than $250,000. During negotiations, a proposal to give licensing priority to people who’ve faced drug convictions was reportedly abandoned.
All new cultivators would consist of equity applicants, and to obtain a license they would have to pay a $3 million fee—a steep sum, the outlet reported. Existing marijuana companies that enter into partnerships with equity applicants would need to either put $500,000 into an equity fund or devote five percent of floor space and potentially five percent of profits to the partners.
Advocates say the requirement that upstart equity businesses would need to work with—and share profits with—existing big cannabis companies is a non-starter.
Here are some additional details about the forthcoming cannabis compromise legislation, according to CT Post:
- Growing up to six plants for personal use would be decriminalized initially and “could become fully legal within three years,” according to the report. Rojas indicated on Thursday, however, that medical marijuana patients would be able to lawfully grow their own medicine.
- The number of dispensaries is not specified in the bill and would be determined by market forces. New licenses would be awarded by lottery, and it’s not clear when sales would begin.
- The state’s general sales tax of 6.35 percent would apply to cannabis, and additional excise taxes of about double that amount would also be added, with 80 percent of revenue from the latter going to a social equity fund and 20 percent being allocated for mental health and addiction services.
- Testing labs would collect marijuana samples directly from cultivation facilities instead of allowing growers to choose samples to send in for testing.
- Marijuana businesses would need to operate under “project labor agreements” to pay union-scale wages. They would also have to sign agreements with labor organizations under which workers would agree to binding arbitration for dispute resolution and would not have the right to go on strike.
The bill text is not yet publicly available, however, and so the final details remain to be seen.
After circulating the proposal among members, the plan is to first take the legislation up in the Senate, where the compromise language is expected to be incorporated into a legalization bill backed by the governor that’s moved through two committees.
The measure may face pushback from progressive Democrats who has signaled that they feel legislative leaders and the governor are moving too quickly and sidestepping important social equity considerations.
Rep. Anne Hughes (D), cochair of the Progressive Caucus, told Marijuana Moment on Tuesday that “we want to do it right,” and that may mean tackling the reform in a special session—an option opposed by leadership and the governor.
Ritter said last week that he feels there’s a 57-43 chance that the legislation is approved, whereas he previously gave it a 50-50 chance. But it’s uncertain whether he feels those odds have changed given the time restraints and pushback from Democratic members.
Meanwhile, the governor said recently that he and legislative leaders are having “good, strong negotiations,” and there’s “broad agreement” on policies concerning public health and safety. There’s “growing agreement” with respect to using marijuana tax revenue to reinvest in communities disproportionately harmed by prohibition.
If a legalization measure isn’t enacted this year, Lamont said last month that the issue could ultimately go before voters.
“Marijuana is sort of interesting to me. When it goes to a vote of the people through some sort of a referendum, it passes overwhelmingly. When it goes through a legislature and a lot of telephone calls are made, it’s slim or doesn’t pass,” the governor said. “We’re trying to do it through the legislature. Folks are elected to make a decision, and we’ll see where it goes. If it doesn’t, we’ll probably end up in a referendum.”
Ritter similarly said last year that if the legislature isn’t able to pass a legalization bill, he will move to put a question on the state’s 2022 ballot that would leave the matter to voters.
According to recent polling, if legalization did go before voters, it would pass.
Sixty-four percent of residents in the state favor legalizing cannabis for adult use, a survey from Sacred Heart University that was released last week found.
A competing legalization measure from Rep. Robyn Porter (D), which is favored by many legalization advocates for its focus on social equity, was approved in the Labor and Public Employees Committee in March.
Lamont, who convened an informal work group in recent months to make recommendations on the policy change, initially described his legalization plan as a “comprehensive framework for the cultivation, manufacture, sale, possession, use, and taxation of cannabis that prioritizes public health, public safety, and social justice.”
But while advocates have strongly criticized the governor’s plan as inadequate when it comes to equity provisions, Ritter said in March that “optimism abounds” as lawmakers work to merge proposals into a final legalization bill.
Rojas also said that “in principle, equity is important to both the administration and the legislature, and we’re going to work through those details.”
To that end, the majority leader said that working groups have been formed in the Democratic caucuses of the legislature to go through the governor’s proposal and the committee-approved reform bill.
In February, a Lamont administration official stressed during a hearing in the House Judiciary Committee that Lamont’s proposal it is “not a final bill,” and they want activists “at the table” to further inform the legislation.
The legislature has considered legalization proposals on several occasions in recent years, including a bill that Democrats introduced last year on the governor’s behalf. Those bills stalled, however.
Lamont reiterated his support for legalizing marijuana during his annual State of the State address in January, stating that he would be working with the legislature to advance the reform this session.
The governor has compared the need for regional coordination on marijuana policy to the coronavirus response, stating that officials have “got to think regionally when it comes to how we deal with the pandemic—and I think we have to think regionally when it comes to marijuana, as well.”
He also said that legalization in Connecticut could potentially reduce the spread of COVID-19 by limiting out-of-state trips to purchase legal cannabis in neighboring states such as Massachusetts and New Jersey.
Photo courtesy of Mike Latimer.
Top IRS Official Says Marijuana Banking Reform Would Help Feds ‘Get Paid’
The Internal Revenue Service (IRS) would like to get paid—and it’d help if the marijuana industry had access to banks like companies in other legal markets, an official with the federal department said. She also talked about unique issues related to federal tax deductions for cannabis businesses.
At an event hosted by UCLA’s Annual Tax Controversy Institute on Thursday, IRS’s Cassidy Collins talked about the “special type of collection challenge” that the agency faces when it comes to working with cannabis businesses while the product remains federally illegal.
While IRS isn’t taking a stand on federal marijuana policy, Collins said that the status quo leaves many cannabis businesses operating on a cash-only basis, creating complications for the agency, in part by making it harder for banks to “pay us.”
“The reason why [the marijuana industry is] cash intensive is twofold,” she said. “Number one, a lot of customers don’t want a paper trail showing that they’re buying marijuana, and number two, the hesitancy of banks to allow marijuana businesses to even bank with them.”
Of course, the reason why many financial institutions remain hesitant to take on cannabis companies as clients is because the plant is a strictly controlled substance under federal law.
“There’s been a number of legislative bills that have been introduced—and I am definitely not expressing any opinion personally or on behalf of the IRS about any pending or proposed legislation,” Collins, who is a senior counsel in the IRS Office of Chief Counsel, said. “But it is interesting to note that, if the law changed so that the marijuana businesses could have banks, that would make the IRS’s job to collect [taxes] a lot easier. As part of collection, we want the money. That’s our end goal there.”
A major part of what makes cannabis businesses unique is that they don’t qualify for traditional tax credits under an IRS code known as 280E. That policy “prohibits them from claiming deductions for business expenses because they’re technically being involved in drug trafficking,” Collins explained at the event, from which small excerpts of her comments were reported by Bloomberg.
There are some options available to lessen the burden on marijuana firms, however. At the end of the day, “IRS will work with marijuana companies because, again, we want to get paid,” Collins said.
One of the ways the agency works with marijuana business operators is to have them visit designated IRS “tax assistance centers” that accept cash payments in excess of $50,000. But the official warned businesses to “be prepared to be there for a little while” as the center checks—and double checks—the amount of cash being submitted.
“Revenue officers will assist the marijuana companies in paying us,” she said.
IRS officials could also help cannabis firms by having officials accompany them “to the bank in order to try to help the taxpayer secure a cashier’s payment to pay the IRS, as well as using money orders,” she said, adding that “our revenue officers are are wanting to work with the marijuana companies to help assist them to pay us.”
“When the revenue officers are there in person with the taxpayer, that could potentially help increase the likelihood that the bank will cooperate and help the taxpayer transition into a cashier’s check,” she continued. “And that has been a trend since this first became legal [at the state level], that more and more banks are allowing cannabis companies to bank with them.”
In a report published earlier this year, congressional researchers examined tax policies and restrictions for the marijuana industry—and how those could change if any number of federal reform bills are enacted.
IRS, for its part, said last month that it expects the cannabis market to continue to grow, and it offered some tips to businesses on staying compliant with taxes while the plant remains federally prohibited.
As it stands, banks and credit unions are operating under 2014 guidance from the Financial Crimes Enforcement Network (FinCEN) that lays out reporting requirements for those that choose to service the marijuana industry.
Leaders in both chambers of Congress are working on legalization bills to end federal marijuana prohibition. But stakeholders are hopeful that, in the interim, legislators will enact modest marijuana banking reform. Legislation to protect financial institutions from being penalized for working with cannabis businesses passed the House for the fifth time last month.
Rodney Hood, a board member of the National Credit Union Administration, wrote in a Marijuana Moment op-ed this month that legalization is an inevitability—and it makes the most sense for government agencies to get ahead of the policy change to resolve banking complications.
IRS separately hosted a forum in August dedicated to tax policy for marijuana businesses and cryptocurrency.
Earlier this year, IRS Commissioner Charles Rettig told Congress that the agency would “prefer” for state-legal marijuana businesses to be able to pay taxes electronically, as the current largely cash-based system under federal cannabis prohibition is onerous and presents risks to workers.
Former Treasury Secretary Steven Mnuchin said in 2019 that he’d like to see Congress approve legislation resolving the cannabis banking issue and he pointed to the fact that IRS has had to build “cash rooms” to deposit taxes from those businesses as an example of the problem.
IRS released updated guidance on tax policy for the marijuana industry last year, including instructions on how cannabis businesses that don’t have access to bank accounts can pay their tax bills using large amounts of cash.
The update appears to be responsive to a Treasury Department internal watchdog report that was released earlier in the year. The department’s inspector general for tax administration had criticized IRS for failing to adequately advise taxpayers in the marijuana industry about compliance with federal tax laws. And it directed the agency to “develop and publicize guidance specific to the marijuana industry.”
Luxembourg Set To Become First European Country To Legalize Marijuana Following Government Recommendation
Luxembourg is poised to become the first European country to legalize marijuana, with key government agencies putting forward a plan to allow the possession and cultivation of cannabis for personal use.
The ministers of justice and homeland security on Friday unveiled the proposal, which will still require a vote in the Parliament but is expected to pass. It’s part of a broader package of reform measures the agencies are recommending.
Under the marijuana measure, adults 18 and older could grow up to four plants. However, under the non-commercial model that is being proposed, possessing more than three grams in public would still be a civil offense, carrying a fine of €25-500 ($29-581). Currently, the maximum fine for possession is €2,500 ($2,908).
In terms of access, adults would be able to buy and trade cannabis seeds for their home garden.
Justice Minister Sam Tamson said the government felt it “had to act” and characterized the home cultivation policy change as a first step, The Guardian reported.
👉🏻élaboration du projet de loi usage privé du #cannabis : jusqu’à 4 plantes à domicile & décorrectionnalisation <3g
👉🏻renforcement de la prévention & de l’accompagnement
👉🏻⬆️des moyens de la police
👉🏻élaboration d’un projet de production/vente #Luxembourg pic.twitter.com/8yre0Udt8J
— Sam Tanson (@SamTanson) October 22, 2021
“The idea is that a consumer is not in an illegal situation if he consumes cannabis and that we don’t support the whole illegal chain from production to transportation to selling where there is a lot of misery attached,” he said. “We want to do everything we can to get more and more away from the illegal black market.”
While limited in scope, the reform would make Luxembourg the first country in Europe to legalize the production and possession of marijuana for recreational use. Cannabis has been widely decriminalized in certain countries in the continent, but it has remained criminalized by statute.
Government sources in Luxembourg told The Guardian that plans are in the works to develop a program where the state regulates the production and distribution of marijuana. Tamson said they are working to resolve “international constraints” before taking that step, however, referring to United Nations treaty obligations that multiple U.S. states and other countries like Canada and Uruguay have openly flouted.
The measures include:
🟢 Regulation of cannabis use and cultivation: adults will be able to legally cultivate up to four cannabis plants for their own use, provided the cultivation is happening at their place of residence.
— European Greens (@europeangreens) October 22, 2021
For now, the country is focusing on legalization within a home setting. Parliament is expected to vote on the proposal in early 2022, and the ruling parties are friendly to the reform.
This has been a long time coming, as a coalition of major parties of Luxembourg agreed in 2018 to enact legislation allowing “the exemption from punishment or even legalization” of cannabis.
Meanwhile in the U.S., congressional lawmakers are working to advance legalization legislation. A key House committee recently approved a bill to end marijuana prohibition, and Senate leadership is finalizing a separate reform proposal.
In Mexico, a top Senator said this week that lawmakers could advance legislation to regulate marijuana in the coming weeks. The Supreme Court has already ruled that adults cannot be criminalized over possession or cultivation, but there’s currently no program in place to provide access.
Photo courtesy of Mike Latimer.
New Bipartisan Marijuana Research Bill In Congress Would Let Scientists Study Dispensary Products
A bipartisan group of federal lawmakers introduced a bill on Thursday to remove barriers to conducting research on marijuana, including by allowing scientists to access cannabis from state-legal dispensaries.
The Medical Marijuana Research Act, filed by the unlikely duo of pro-legalization Rep. Earl Blumenauer (D-OR) and prohibitionist Rep. Andy Harris (R-MD), would streamline the process for researchers to apply and get approved to study cannabis and set clear deadlines on federal agencies to act on their applications.
“Congress is hopelessly behind the American people on cannabis, and the quality of our research shows why that is an urgent problem,” Blumenauer told Marijuana Moment. “Despite the fact that 99 percent of Americans live in a state that has legalized some form of cannabis, federal law is still hamstringing researchers’ ability to study the full range of health benefits offered by cannabis, and to learn more about the products readily available to consumers.”
“It’s outrageous that we are outsourcing leadership in that research to Israel, the United Kingdom, Canada, and others. It’s time to change the system,” he said.
Late last year, the House approved an identical version of the cannabis science legislation. Days later, the Senate passed a similar bill but nothing ended up getting to the president’s desk by the end of the last Congress. Earlier this year, a bipartisan group of senators refiled their marijuana research measure for the current 117th Congress.
Meanwhile, lawmakers are also advancing a separate strategy to open up dispensary cannabis to researchers. Large-scale infrastructure legislation that has passed both chambers in differing forms and which is pending final action contains provisions aimed at allowing researchers to study the actual marijuana that consumers are purchasing from state-legal businesses instead of having to use only government-grown cannabis.
The new bill filed this week by Blumenauer and Harris, along with six other original cosponsors, would also make it easier for scientists to modify their research protocols without having to seek federal approval.
Marijuana Moment is already tracking more than 1,200 cannabis, psychedelics and drug policy bills in state legislatures and Congress this year. Patreon supporters pledging at least $25/month get access to our interactive maps, charts and hearing calendar so they don’t miss any developments.
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It would additionally mandate that the Drug Enforcement Administration (DEA) license more growers and make it so there would be no limit on the number of additional entities that can be registered to cultivate marijuana for research purposes. It would also require the U.S. Department of Health and Human Services (HHS) to submit a report to Congress within five years after enactment to overview the results of federal cannabis studies and recommend whether they warrant marijuana’s rescheduling under federal law.
“The cannabis laws in this country are broken, including our laws that govern cannabis research,” Blumenauer said in remarks in the Congressional Record. “Because cannabis is a Schedule I substance, researchers must jump through hoops and comply with onerous requirements just to do basic research on the medical potential of the plant.”
The new legislation will “both streamline the often-duplicative licensure process for researchers seeking to conduct cannabis research and facilitate access to an increased supply of higher quality medical grade cannabis for research purposes,” he said, adding that expanded studies will help make sure “Americans have adequate access to potentially transformative medicines and treatments.”
For half a century, researchers have only been able to study marijuana grown at a single federally approved facility at the University of Mississippi, but they have complained that it is difficult to obtain the product and that it is of low quality. Indeed, one study showed that the government cannabis is more similar to hemp than to the marijuana that consumers actually use in the real world.
There’s been bipartisan agreement that DEA has inhibited cannabis research by being slow to follow through on approving additional marijuana manufacturers beyond the Mississippi operation, despite earlier pledges to do so.
In May, the agency finally said it was ready to begin licensing new cannabis cultivators. Last week, DEA proposed a large increase in the amount of marijuana—and psychedelics such as psilocybin, LSD, MDMA and mescaline—that it wants produced in the U.S. for research purposes next year.
Under the new House bill, the agency would be forced to start approving additional cultivation applications for study purposes within one year of the legislation’s enactment.
HHS and the attorney general would be required under the bill to create a process for marijuana manufacturers and distributors to supply researchers with cannabis from dispensaries. They would have one year after enactment to develop that procedure, and would have to start meeting to work on it within 60 days of the bill’s passage.
In general, the legislation would also establish a simplified registration process for researchers interested in studying cannabis, in part by reducing approval wait times, minimizing costly security requirements and eliminating additional layers of protocol review.
Read the full text of the new marijuana research bill below: