Connecticut lawmakers took a full day’s worth of public testimony on Friday about Gov. Ned Lamont’s (D) plan to legalize and regulate marijuana for adults. The legislation has drawn harsh criticism from social equity advocates since its unveiling earlier this month as part of the governor’s budget, and the bill’s supporters said at Friday’s hearing that they’re open to making changes to address those concerns.
“This is not a final bill,” Lamont’s chief of staff, Paul Mounds, told equity advocates during his testimony to the legislature’s Judiciary Committee. “We want to sit at the table. We want you at the table.”
Before Friday’s official legislative hearing, a group of reform advocates critical of the governor’s proposal held a press conference to bring attention to what they say are shortcomings of the bill’s licensing, equity and criminal justice provisions. Among them, they argue the governor’s plan, SB 888, would give an overwhelming advantage to businesses in the state’s existing medical marijuana system by allowing them early control of the legal adult-use industry. That would likely make it hard for smaller applicants or Black and brown people trying to enter the new market as business owners rather than as employees.
One speaker at the press conference, Rep. Anne Hughes (D), said she would be willing to vote against the governor’s bill if it doesn’t end up including a stronger emphasis on equity.
“If we put equity applicants at the back of the line,” Hughes said, “I don’t think we can ever repair that. I don’t think we can catch up.”
Critics of the governor’s plan have drawn attention to a separate legalization bill, HB 6377, which includes additional equity measures, such as early registration for equity license applicants and funding for low-interest business loans.
Supporters of the governor’s bill struck a conciliatory tone at Friday’s hearing, denying that the two proposals are in conflict. “These bills aren’t competing,” said Jonathan Harris, a senior advisor to the governor. “They’re actually complementary.”
Jason Ortiz, a drug policy advocate and president of the Minority Cannabis Business Association who served as chair of the governor’s cannabis licensing working group last year, has been critical of Lamont’s proposal, arguing that the administration effectively ignored his suggestions for how to build an equitable industry. In a Facebook post on Thursday, he said the governor’s legalization plan “creates a white only market for an indefinite period of time.”
At Friday morning’s press conference, Ortiz said equity advocates would be happy to help strengthen Lamont’s proposal.
“We were available months ago and we’re available now. The governor just needs to pick up his phone and call Reps. [Robyn] Porter and her colleagues,” he told Marijuana Moment after the event, referring to backers of the separate legalization bill, HB 6377.
State Senate Majority Leader Bob Duff (D), meanwhile, has said the cannabis legalization bills need to be “pulled apart and put back together,” according to The Connecticut Examiner, adding that there’s still “a lot of work to be done.”
“We need to be start taking all of these different ideas and putting them together,” House Speaker Matt Ritter (D) told the Examiner, “so we can have an actual bill to rally the votes behind.
For her part, Porter, who chairs the Labor Committee, said during Friday’s hearing that she’s confident that HB 6377’s provisions will be considered in an eventual compromise bill.
As introduced by Lamont in his budget proposal earlier this month, SB 888 would allow adults 21 and older to possess up to 1.5 ounces of cannabis and purchase products from licensed stores, which would be scheduled to open in May 2022.
Homegrow would be forbidden under the plan, and some but not all marijuana-related convictions from before October 2015 would be automatically expunged. Fiscal estimates project the market could make the state more than $33 million in revenue in fiscal year 2023, growing to $97 million by 2026. Beginning in 2024, half of all state excise tax would be earmarked for municipal aid and equity spending.
Ortiz—whose criticisms were acknowledged by Lamont advisor Harris at Friday’s hearing—identified a number of criminal justices areas of the bill he said were “lacking” during his testimony to the panel, noting that SB 888 does not decriminalize home cultivation or expunge an array of cannabis convictions, including for possession of more than for ounces of cannabis.
“At the core of equity is decarceration, getting folks out of prison; decriminalization, making sure we’re not putting more people in prison; and expungement, making sure the records of whatever interaction they have don’t follow them,” he said. “SB 888 acknowledges the need for all of those, but then doesn’t actually do it in policy.”
Fascinating to watch what's unfolding in Connecticut between the cannabis bill that represents equity (HB 6377) and the cannabis bill that represents a whole lot of lip service and nothing else (SB 888, hearing now). Follow @therealcurect to stay updated and show support. https://t.co/UB6AxrC8wv
— Shaleen Title (@shaleentitle) February 26, 2021
Friday’s hearing—the first to consider the governor’s legalization proposal—drew extensive written and oral testimony. Among those who submitted statements ahead of the hearing were a number of state officials expressing their support for legalization, which is expected to bring tens of millions of dollars in state revenue.
“S.B. 888 will help create jobs, foster an emerging and growing industry in our state, and help support the state and local tax base—all areas that are critical as our state emerges from the pandemic,” wrote David Lehman, commissioner of the state Department of Economic and Community Development and a senior economic advisor to the governor.
Officials also said the policy change would align Connecticut with other nearby states, ensure limits on advertising and products designed to appeal to children, protect the rights of employers to prohibit cannabis use and support social justice.
“Legalizing cannabis means taking meaningful strides to address our state’s criminalization of cannabis to date and the disproportionate impact this has had on communities of color,” said Marc Pelka, undersecretary for criminal justice policy and planning at the Office of Policy and Management.
Commissioner of Consumer Protection Michelle Seagull and others noted that nearby sources of legal, regulated cannabis are increasingly available to state residents. “Massachusetts, Maine, and Vermont already have some form of a market for adult-use cannabis,” she wrote, “bills were just signed into law by New Jersey’s Governor, and New York and Rhode Island are poised to legalize adult-use this year. We cannot ignore or avoid this fact.”
That was a sentiment echoed by Department of Emergency Services and Public Protection Commissioner James Rovella, who pointed out that surrounding states are enacting legalization and that “cannabis is already among us and law enforcement is dealing with it and expending resources on it.”
Department of Banking Commissioner Jorge L. Perez similarly said the governor’s proposal “recognizes that the trend nationally and in nearby states is to legalize the adult use of recreational cannabis” and that it regulates marijuana in way that “prioritizes public health, public safety, and social justice.”
Department of Mental Health and Addiction Services Commissioner Miriam Delphin-Rittmon said she appreciates that the bill “protects public health by providing adult access to safe products and preventing advertising and retail locations that would appeal to children.”
Others who submitted testimony in support include Department of Revenue Services Commissioner Mark D. Boughton, Department of Labor Commissioner Kurt Westby and Department of Motor Vehicles Commissioner Sibongile Magubane.
Some in law enforcement and health care submitted testimony against the legalization plan.
“The rush towards legalization of recreational marijuana ignores how profit-driven corporations hooked generations of Americans on cigarettes and opioids, killing millions and straining public resources,” said the Connecticut State Medical Society. “Connecticut has an obligation to protect the health and welfare of its citizens and rushing to legalize a potentially unsafe drug abdicates this responsibility.”
The state Police Chiefs Association, meanwhile, said it opposes the bill primarily because no qualified roadside test exists to detect cannabis-impaired driving. “While the presence of a police officer trained in Advanced Roadside Impairment Driving Enforcement (ARIDE) or the presence of a Drug Recognition Expert (DRE) may potentially assist in the evaluation of a motorist,” the group said, “there is presently no legal device in which to test such operators. The DRE evaluation mentioned in this [bill] is a process which occurs after the arrest is made.”
The governor’s own written testimony ahead of Friday’s hearing underscored the drug war’s failure. “The war on cannabis did little to protect public health and safety, and instead caused significant injustices for many residents, especially people in black and brown communities,” Lamont wrote.
“One thing on which most of us agree is that social equity must be included in any adult-use market we create. While there is significant consensus around that goal, there are many different approaches as to how to best accomplish it,” he added. “This hearing is the continuation of this critical conversation.”
Despite disagreement over policy details, many expect legalization to happen Connecticut’s near future. Ritter, the speaker, said in November that legalization in the state is “inevitable.” He added later that month that “I think it’s got a 50–50 chance of passing [in 2021], and I think you should have a vote regardless.”
Should this year’s effort fail, Ritter said he will move to put a constitutional question on the state’s 2022 ballot that would leave the matter to voters. A poll released last year found that nearly two-thirds of voters (63.4 percent) either “strongly” or “somewhat” supported recreational legalization.
Photo courtesy of Rick Proctor
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: