Never has it been more clear than during the current COVID-19 pandemic that marijuana has arrived at the forefront of mainstream American society.
In state after state, governors and public health officials are deeming cannabis businesses “essential” operations that can stay open amid coronavirus-related forced closures and stay-at-home mandates. People might not be able to go bowling or see a movie in theaters, but they can still stock up on marijuana.
It wasn’t long ago that anyone growing and selling marijuana faced the risk of being arrested, prosecuted and jailed. But now, in the era of expanding legalization, cannabis providers in many states are held up as vital members of the community who are providing a valuable service on par with picking up prescription drugs at a pharmacy or filling up your car at a gas station.
Advocacy groups have pushed governors and state officials to ensure that medical marijuana patients in particular can maintain access to the cannabis they need. But because many people who use marijuana for therapeutic purposes don’t necessarily jump through the hoops needed in order to become officially certified as patients, recreational businesses are also seen as crucial access points that need to stay open.
“Most of the American public and an increasing number of government leaders stopped buying into the demonization of cannabis years ago,” Karen O’Keefe, state policies director for the Marijuana Policy Project, said. “Now, not only have two-thirds of states recognized that medical cannabis should be legal—with 11 legalizing adult-use—many are recognizing that safe access to cannabis is essential.”
NORML Executive Director Erik Altieri said it is “encouraging to see our nation’s public policy in practice is finally catching up to where the vast majority of Americans have been for years.”
“The recognition by our government officials that cannabis is indeed not just here to stay, but an essential part of life for millions of Americans—particularly in the patient community—is a welcome move in the right direction,” he said. “It is also a move that could not have come at a better moment for those who still require access to maintain quality of life during these trying and troubled times.”
In some states, officials have enacted new temporary policies such as expanded delivery services or curbside pickup that make it easier for consumers to get their hands on marijuana while respecting social distancing measures. Others are allowing doctors to issue medical cannabis recommendations via telemedicine instead of requiring that they conduct in-person examinations.
Here’s a look at how states that are taking steps to maintain legal marijuana access during the COVID-19 outbreak:
Regulators deemed cannabis retail outlets to be essential businesses that can stay open amid a broader stay-at-home order. Localities, including Los Angeles County and San Francisco, have also said that certain cannabis businesses are essential providers that can continue operations.
Gov. Jared Polis (D) issued an executive order allowing marijuana businesses to provide curbside pickup services and letting doctors issue medical cannabis recommendations via telemedicine without in-person examinations. A subsequent order from the governor says that marijuana businesses are critical retail operations, but only for the sale of medical cannabis or curbside delivery. Regulators also issued emergency rules temporarily loosening requirements for fingerprinting of marijuana business owners, modification of premises and transfer of cannabis product samples for testing.
Regulators deemed medical cannabis businesses to be essential and thus exempt from a general mandate to suspend in-person operations.
The state surgeon general issued an order allowing physicians to issue medical cannabis recertifications to existing patients—but not new ones—via telemedicine.
Gov. J.B. Pritzker’s (D) stay-at-home order declares marijuana dispensaries and cultivation facilities to be essential businesses that can stay open. Dispensaries are also being allowed to do curbside sales of medical cannabis—but not recreational marijuana—products.
Medical cannabis growers, processors and dispensaries. are exempt from an order Gov. Larry Hogan (R) issued to close non-essential businesses. Regulators are also allowing dispensaries to deliver medical marijuana to patients in parking lots.
Gov. Charlie Baker (R) issued a stay-at-home order deeming medical cannabis businesses—but not recreational marijuana ones—to be essential and exempt from a general shutdown. Regulators also encouraged medical cannabis delivery services to promote and expand their offerings, and are allowing doctors to remotely recommend marijuana to patients through the use of telehealth waivers.
Marijuana businesses will be able to continue curbside sales and home deliveries but cannot perform in-person transactions in stores under a stay-at-home order issued by Gov. Gretchen Whitmer (D). Regulators previously sent a bulletin allowing curbside pickup and encouraging delivery services, and another bulletin extending the period of prequalification status for marijuana business license applicants that may experience building delays.
Regulators are allowing medical cannabis patients to do curbside pickup at dispensaries and are letting doctors issue recommendations via telemedicine.
Gov. Phil Murphy (D) exempted medical cannabis dispensaries from a stay-at-home order. Regulators moved to allow patients pick up medical marijuana at dispensaries’ curbsides and to reduce caregiver registration fees.
Regulators ruled that medical cannabis businesses are essential and can stay open. They also allowed curbside pickup services, extended expiring patient and caregiver cards for 90 days and suspended background checks for new industry employees.
The state Department of Health deemed that medical cannabis providers are essential businesses not subject to a general closure order. Those that are authorized to carry out home delivery are temporarily allowed to expand those services without written approval.
Gov. Mike DeWine’s (R) stay-at-home order exempts medical cannabis businesses from a broader business shutdown. The State Medical Board also moved to allow doctors to issue medical cannabis recommendations via telemedicine without meeting patients in person. Additionally, regulators are letting patients phone in orders ahead of their arrival at dispensaries to reduce time spent inside.
Regulators approved rules to allow curbside delivery of marijuana at licensed retail locations and to increase medical cannabis sales limits. They also moved to make it easier to obtain cannabis worker permits.
Regulators deemed medical cannabis providers as “life-sustaining” operations that are exempt from Gov. Tom Wolf’s (D) order to close businesses in general. They also took other steps, including allowing patients to have marijuana brought to their cars outside of dispensaries and letting caregivers make deliveries to an unlimited number of patients.
Gov. Jay Inslee’s (D) stay-at-home order exempts marijuana businesses as essential, allowing them to stay open. And regulators are allowing marijuana dispensaries to carry out curbside service for medical cannabis patients.
Despite the significant number of states deeming cannabis businesses to be essential and issuing rulings temporarily expanding their services, that is not the case in every legal marijuana market.
And despite the accommodations, many regulators are also directing businesses to implement social distancing measures such as limits on the number of customers who can enter a retail operation at a given time or guidance on physical space between those who are standing in line—changes that can slow down operations and reduce revenue.
Still, many industry leaders seems to understand the public health necessity of such moves, and cannabis law firm Vicente Sederberg LLP, for example, issued a set of suggested voluntary guidelines for marijuana businesses to consider.
For now, industry trackers have indicated that sales are strong as consumers stock up in preparation to hunker down at home for several weeks.
Nonetheless, the industry has called on Congress to give it equal access to disaster relief funds—a request necessitated by the fact that ongoing federal prohibition means that their operations are still illegal and not generally eligible for such aid.
Legalization opponents, meanwhile, are not pleased with moves by a growing number of states to keep cannabis stores in business despite the steps intended to foster social distancing at such locations.
“We have seen numerous reports of marijuana stores with long lines of people stocking up on the drug and have additionally seen states move to keep these stores open,” Kevin Sabet, president of prohibitionist organization Smart Approaches to Marijuana, said. “Quite frankly, this presents a unique harm to public health and safety. Across the country, states are doing everything in their power to limit the gathering of people in one location. Long lines outside of establishments engaged in the distribution of marijuana should be a tremendous cause for concern.”
When it comes to consumers, while advocates have cautioned them to consider refraining from smoking or vaping for the time being due to the risk of agitating lungs amid the respiratory effects of the novel coronavirus, they have also pointed out that there are other ways to use cannabis, such as edibles.
For now, the coronavirus pandemic has further highlighted the disconnect between federal and state policies: Under one set of laws cannabis is a banned drug, and under the other it’s a medicine deemed just as essential as any other.
(Marijuana Moment’s editor provides some content to Forbes via a temporary exclusive publishing license arrangement.)
Photo courtesy of Carlos Gracia.
Amazon Endorses GOP-Led Bill To Federally Legalize Marijuana
Amazon, the second largest private employer in the U.S., is backing a Republican-led bill to federally legalize, tax and regulate marijuana.
The company’s public policy division said on Tuesday that it is “pleased to endorse” the legislation from Rep. Nancy Mace (R-SC), who filed the States Reform Act in November as a middle-ground alternative to more scaled back GOP proposals and wide-ranging legalization bills that are being championed by Democrats.
We’re pleased to endorse @RepNancyMace's States Reform Act. Like so many in this country, we believe it’s time to reform the nation’s cannabis policy and Amazon is committed to helping lead the effort. https://t.co/g04Dn5KZq5
— Amazon Public Policy (@amazon_policy) January 25, 2022
“Like so many in this country, we believe it’s time to reform the nation’s cannabis policy and Amazon is committed to helping lead the effort,” the company, which previously expressed support for a separate, Democratic-led legalization bill, said.
Amazon has worked to adapt to changing marijuana policies internally as it’s backed congressional reform, enacting an employment policy change last year to end drug testing for cannabis for most workers, for example.
Months after making that change—and following the introduction of the States Reform Act—Mace met with Amazon and received the company’s endorsement, Forbes reported.
“They don’t want to sell it,” the freshman congresswoman said, adding that Amazon is primarily interested in backing the reform for hiring purposes instead of as a way to eventually sell cannabis. “It opens up the hiring pool by about 10 percent.”
— Rep. Nancy Mace (@RepNancyMace) January 25, 2022
Brian Huseman, Amazon’s vice president of public policy, said the bill “offers comprehensive reform that speaks to the emergence of a bipartisan consensus to end the federal prohibition of cannabis.”
Amazon’s drug testing decision was widely celebrated by reform advocates and industry stakeholders. Initially, the company only talked about ending the policy going forward. But it later disclosed that the policy change would also be retroactive, meaning former workers and applicants who were punished for testing positive for THC will have their employment eligibility restored.
The reason for the move away from marijuana testing was multifaceted, Amazon said at the time. The growing state-level legalization movement has made it “difficult to implement an equitable, consistent, and national pre-employment marijuana testing program,” data shows that drug testing “disproportionately impacts people of color and acts as a barrier to employment” and ending the requirement will widen the company’s applicant pool.
The GOP congresswoman’s bill already has the support of the influential, Koch-backed conservative group Americans for Prosperity.
The measure would end federal cannabis prohibition while taking specific steps to ensure that businesses in existing state markets can continue to operate unencumbered by changing federal rules.
Mace’s legislation has been characterized as an attempt to bridge a partisan divide on federal cannabis policy. It does that by incorporating certain equity provisions such as expungements for people with non-violent cannabis convictions and imposing an excise tax, revenue from which would support community reinvestment, law enforcement and Small Business Administration (SBA) activities.
Marijuana Moment first reported on an earlier draft version of the bill in November, and it quickly became apparent that industry stakeholders see an opportunity in the Republican-led effort.
The reason for that response largely comes down to the fact that there’s skepticism that Democratic-led legalization bills—including the Marijuana Opportunity, Reinvestment and Expungement (MORE) Act that Amazon has also endorsed—will be able to pass without GOP buy-in. While Democrats hold majorities in both chambers, in addition to controlling the White House, the margins for passage are slim.
The MORE Act did clear the House Judiciary Committee in September, and a previous version passed the full House during the last Congress. Senate leadership is preparing to file a separate legalization proposal after unveiling a draft version in July.
Photo courtesy of Max Pixel.
Massachusetts Marijuana Tax Revenue Now Exceeds Alcohol By Millions
Massachusetts is officially collecting more tax revenue from marijuana than alcohol, state data shows.
As of December 2021, the state took in $51.3 million from alcohol taxes and $74.2 million from cannabis at the halfway point of the fiscal year.
Overall, Massachusetts has seen $2.54 billion in adult-use marijuana purchases since the market came online in November 2018. Regulators first reported that the state achieved the $2 billion sales milestone in September.
The news about cannabis overtaking alcohol in terms of tax revenue, which WCVB-TV first reported, is a welcome development for advocates who have been arguing that the plant is less harmful than liquor and could be used as a substitute.
Illinois also saw cannabis taxes beat out booze for the first time last year, with the state collecting about $100 million more from adult-use marijuana than alcohol during 2021.
States that have legalized marijuana have collectively garnered more than $10 billion in cannabis tax revenue since the first licensed sales started in 2014, according to a report released by the Marijuana Policy Project (MPP) earlier this month.
And in those adult-use states, regulators are doing what they can to ensure that the tax dollars are effectively invested.
For example, Illinois is dedicating portions of tax revenue to mental health services, as well as local organizations “developing programs that benefit disadvantaged communities.” In July, state officials put $3.5 million in cannabis-generated funds toward efforts to reduce violence through street intervention programs.
California officials announced in June that they were awarding about $29 million in grants funded by marijuana tax revenue to 58 nonprofit organizations, with the intent of righting the wrongs of the war on drugs. The state collected about $817 million in adult-use marijuana tax revenue during the 2020-2021 fiscal year, state officials estimated last summer. That’s 55 percent more cannabis earnings for state coffers than was generated in the prior fiscal year.
Nearly $500 million of cannabis tax revenue in Colorado has supported the state’s public school system. That state brought in a record $423 million in marijuana tax dollars last year.
Banking Activity Increases In States That Legalize Marijuana, Study Finds
While marijuana businesses often struggle to find banks that are willing to take them on as clients due to risks caused by the ongoing federal prohibition of cannabis, a new study found that banking activity actually increases in states that legalize marijuana.
The research doesn’t make a direct connection between state-level marijuana reform and the increased activity, but it does strongly imply that there’s a relationship—even if the factors behind the trend aren’t exactly clear.
Researchers set out to investigate banking trends in states that have legalized cannabis, looking at bank regulatory filings with the Federal Deposit Insurance Corporation (FDIC) from 2011 to 2016. They found evidence that “banking activity (deposits and subsequent loans) increase considerably in legalizing states relative to non-legalizing states.”
That’s in spite of the fact that banks and credit unions run the risk of being penalized by federal regulators for working with businesses that deal with a federally controlled substance.
“While uncertainty can result in overly cautious behavior and hinder economic activity, we do not find evidence of this with cannabis laws and the banking industry,” the authors wrote in the new paper—titled, “THC and the FDIC: Implications of Cannabis Legalization for the Banking System.”
The study analyzed data from “150,566 bank-quarter observations from 6,932 unique banks located in 46 different states.” It found that deposits increased by an average range of 3.14-4.33 percent—and bank lending increased by 6.54-8.62 percent—post-legalization.
“Our results indicate that deposits and loans increased for banks after recreational cannabis legalization.”
Of course, it makes sense that legal states would see increased financial activity in the banking sector after opening a new market, even if only some banks choose to take the risk of working directly with cannabis businesses. The emerging marijuana industry also supports an array of ancillary firms and traditional companies that provide services to dispensaries and grow operations.
As of June 30, there were 706 financial institutions that had filed requisite reports saying they were actively serving cannabis clients. Thats up from 689 in the previous quarter but still down from a peak of 747 in late 2019.
But the question remains: why are some banks deciding to take on marijuana clients while others remain wary of federal repercussions?
The study authors—from the University of Arizona, Drexel University, San Diego State University and Scripps College—put forward two possibilities about why “the risk from regulatory uncertainty did not decrease banks’ willingness to accept deposits or make loans.”
The increase “may suggest that banks were either unconcerned about the potential risk associated with accepting cannabis related deposits or optimistic about the chances that regulations will adapt to the needs of legalizing states,” the paper reasons.
Confidence about working with a federally illegal industry may well have been bolstered in 2014 when the Financial Crimes Enforcement Network (FinCEN) under the Obama administration issued guidance to financial institutions on reporting requirements for cannabis-related businesses.
The second option, optimism about federal reform, also seems possible. It was around the time that the bipartisan Secure and Fair Enforcement (SAFE) Banking Act was first introduced that there was a notable spike in financial institutions reporting that they have marijuana business clients.
In the years since, that legislation has been approved in some form five times in the U.S. House of Representatives, but it’s continued to stall in the Senate. In general, banks reporting marijuana accounts has remained relatively stable since 2019.
“Although many have speculated about the increased legal risks to banks, there is a lack of evidence for instances where banks are criminally prosecuted or lose their federally insured status,” the study states. “If these negative repercussions rarely happen, it makes sense that banks would not respond to the legislative uncertainty.”
“As more state regulators issue statements in support of banks and credit unions serving the cannabis industry, the financial institutions can become more optimistic about the chances that regulations will adapt in their favor with time,” the authors wrote.
Despite optimism for future reform that certain lawmakers have expressed, it doesn’t necessarily take the sting out of the latest failed attempt to secure protections for banks that choose to work with state-legal cannabis businesses as part of a large-scale defense bill.
A pro-reform Republican senator recently slammed Democrats for failing to advance marijuana banking reform despite having a congressional majority and control of the presidency.
For what it’s worth, the secretary of the U.S. Treasury Department recently said that freeing up banks to work with state-legal marijuana businesses would “of course” make the Internal Revenue Service’s (IRS) job of collecting taxes easier.
With respect to the SAFE Banking Act, a bipartisan coalition of two dozen governors recently implored congressional leaders to finally enact marijuana banking reform through the large-scale defense legislation.
A group of small marijuana business owners also recently made the case that the incremental banking policy change could actually help support social equity efforts.
Rodney Hood, a board member of the National Credit Union Administration, wrote in a recent Marijuana Moment op-ed 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 now.