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Cuomo Encourages Banks To Work With Medical Marijuana And Hemp Businesses

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Banks in New York should feel free to open accounts for medical marijuana and hemp business without fear of being punished by state regulators, Gov. Andrew Cuomo’s administration said on Tuesday.

Despite the fact that a growing number of states are moving to allow medical cannabis or recreational marijuana, its use, production and sales remain illegal under federal law. And that means that many banks refrain from serving related businesses out of fear of running afoul of federal money laundering and drug laws.

“These limitations create unique burdens for legal marijuana businesses,” the New York Department of Financial Services said in a new guidance document. “For example, companies pay employees with envelopes of cash, carry bags containing thousands of dollars to purchase money orders, and some pay taxes in cash. It also has been reported that some businesses have opened bank accounts through holding companies or use of personal bank accounts.”

“Forcing medical marijuana and industrial hemp businesses to operate solely with cash creates a public safety issue, as cash intensive businesses and their suppliers, employees and customers become targets for criminals. Large amounts of cash distributed outside the regulated banking system is unacceptable and creates risks to the companies, and their employees and business partners. Further, large scale cash operations impede tracking funds for tax and anti-money laundering purposes. None of this is necessary.”

“Positions taken by the federal government are only exacerbating these problems, rather than remedying them. New York must act.”

In the new document, state regulators say that the state “will not impose any regulatory action on any New York State chartered bank or credit union solely for establishing a banking relationship with a medical marijuana-related business that operates a compliant business in New York, as long as the New York State chartered bank or credit union complies with the requirements of” Obama-era Justice and Treasury Department memos intended to discourage federal interference in state cannabis laws.

Similar guidance is provided in the memo for banks working with hemp businesses that operate in accordance with relevant state and federal laws.

The move by New York officials is likely to be welcomed by the cannabis industry and financial services providers, but it is unclear whether it will actually encourage additional banks to work with marijuana businesses. That’s because Cuomo’s administration has no power to amend federal law, which remains unchanged, for now.

“The ability to establish a banking relationship is a challenge that legal industries face unlike no other,” Cuomo, a Democrat, said in a press release. “As the federal government continues to sow discord surrounding the medical marijuana and industrial hemp businesses, New York has made significant progress in creating a supportive economic development and regulatory landscape for these companies.”

U.S. House and Senate committees last month rejected amendments to allow banks to serve cannabis businesses without being punished by federal regulators.

The new 10-page guidance document says several times that the state “encourages” banks to begin working with medical marijuana and hemp businesses.

Federal data shows that a growing number of financial institutions are working with marijuana growers, processors and retailers despite federal uncertainty.

The move comes as Cuomo’s health department prepares to release a report endorsing broader legalization of marijuana, something that governor once vigorously opposed but now seems more open to in light of a primary challenge from anti-prohibition advocate Cynthia Nixon.

The state Democratic Party called for marijuana legalization at its convention in May.

Top New York Health Official Embraces Marijuana Legalization

Photo courtesy of Zack Seward.

If you value staying updated on cannabis news, please start a monthly Patreon pledge to support Marijuana Moment!

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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Google Execs Told Marijuana Jokes To Lighten The Mood After Trump’s Election, Leaked Video Shows

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Shortly after the 2016 presidential election, Google executives spoke at an all-hands meeting about the political ramifications of Donald Trump’s victory and fielded questions from employees about the path moving forward.

And to lighten the mood, they also cracked a few jokes about marijuana, which had just been fully legalized in California, the home of Google’s headquarters.

“Let’s face it, most people here are pretty upset and pretty sad because of the election,” Google co-founder Sergey Brin said at the beginning of the meeting. “But there’s another group—a small group—that we should also think about who are very excited about the legalization of pot.” 

Employees are heard applauding and laughing in the video, which was leaked to Breitbart by an anonymous source. (The video cannot currently be embedded, but it appears at the top of the page linked above).

“I was asking if we could serve joints outside on the patio, but apparently these things take a little while to take effect,” Brin continued. “It was a huge, huge disappointment.”

“I’ve been bemoaning that all week, I’ll be honest with you.” 

Of course, the meeting took on a more serious tone as executives discussed the policy implications of the incoming Trump administration and the role of Google in the modern political landscape. But the meeting didn’t wrap without one final nod to the passage of Proposition 64 in California.

Asked to weigh in on speculation that economist Jefferey Eisenach would be named as the chairman of the Federal Communications Commission, Google’s chief legal officer Kent Walker brushed it off with his own marijuana joke. 

“Anybody who thinks they know of the likely members of the Trump administration is taking premature advantage of Sergey’s favorite California proposition,” Walker said. “Nobody knows.”

Just as a matter of housekeeping, California’s adult-use marijuana law went into effect immediately after the proposition’s passage. So technically speaking, anyone 21 or older who would have consumed cannabis after the election wouldn’t be taking “premature advantage” of the law.

Perhaps to that end, Brin closed the post-election event by telling Googlers that “there’s food and drink on the patio,” but warned them to “be careful of the cookies.”

New Book: Obama Considered Decriminalizing Marijuana, But Then Trump Won

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Workers In These Industries Are Most Likely To Consume Marijuana

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It’s become increasingly clear that there’s no single “type” of marijuana consumer. But research has identified certain cultural trends, including a new study that examines the prevalence of cannabis consumption among workers in different industries.

The study, published this month in the International Review of Psychiatry, demonstrates that cannabis use is represented in a wide range of employment backgrounds—and some of the industries where using cannabis is most common might come as a surprise.

Let’s start with the numbers. Here’s a list of industries where workers use the most and least cannabis, which the researchers compiled based on 2013 and 2014 National Survey on Drug Use and Health data. The survey asks respondents whether they’ve used marijuana at least once in the past year.

Industry % marijuana use
Food Services 50.55
Education/Health 46.55
Construction/Mining 41.70
Retail 39.15
Professional 38.76
Manufacturing 21.68
Finance 15.70
Transportation 8.23
Wholesale 7.31
Public Administration 3.86
Agriculture 2.93

Note: Not all industries are represented in this list, which is limited by the data submitted by NSDUH respondents. Also, the study does distinguish different “job categories,” but not within each specific industry.

The point of the study wasn’t simply to show what kind of workers are using marijuana, but also for what purposes. If a survey respondent reported using cannabis in the past year, their use was then categorized as either medical, recreational or mixed (i.e. some of their cannabis consumption was recommended by a doctor, but not all of it).

You can see that breakdown in the table below, but in general, the study reveals a diversity of use types among different industries. People in construction tend to be mixed-use consumers, for instance, and people in food services tend to skew recreational. It’s difficult to explain these sub-trends without more data, however.

Via International Review of Psychiatry.

That said, the researchers were especially interested in cannabis use among construction and mining employees.

“One key difference between the user groups is the higher percentage of medical cannabis users in the construction and mining industries,” they wrote. “This is likely due to the higher injury rates in these industries: construction and mining work require physical stamina, often involve irregular schedules, and expose workers to weather, dangerous tools, and equipment.”

The study notes that there’s conflicting research about marijuana use in these industries, with some arguing that frequent use can result in increased workplace injuries and others contending that the therapeutic use of cannabis “addresses pain and other health problems… that often result from work-related injuries.”

That latter point is also consistent with a study released last month showing “evidence that legalizing medical marijuana improved workplace safety.”

Workplace Deaths Drop After States Legalize Medical Marijuana

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Federal Court Rules In Favor Of Worker Rejected For Medical Marijuana Use

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A Connecticut woman’s rights under that state’s medical marijuana law were violated when a company refused to hire her on the basis of her legal cannabis use, and a lawsuit seeking damages against her would-be employer may proceed, a federal judge ruled.

In 2016, Katelin Noffsinger filed suit against Bride Brook Health and Rehabilitation Center, a federal contractor, after a job offer was rescinded following a positive test for cannabis on a pre-employment drug test.

Noffsinger had accepted a management-level position with the firm, which then scheduled a drug test. Prior to the test, Noffsinger informed Bride Brook that she was a qualified cannabis patient under Connecticut’s Palliative Use of Marijuana Act, and used the drug—namely, synthetic marijuana pills, consumed in the evening—to treat post-traumatic stress disorder following a 2012 car crash.

After learning of Noffsinger’s patient status, Bride Brook officials debated over email the best way to inform her that she could not be hired because of her marijuana use.

After the positive drug test and the subsequent rejection, Noffsinger filed an employment-discrimination lawsuit in state court. The case was elevated to federal court after Bride Brook used federal drug laws—including federal cannabis prohibition—to justify their actions.

Unlike some other states including California, Connecticut’s medical-marijuana law, passed in 2012, offers specific employment protections for cannabis patients.

Employers don’t have to accommodate cannabis use during work hours or employees who are intoxicated in the workplace, but any off-hours marijuana use by a certified patient following state law is protected.

In court filings, Bride Brook argued that the federal Drug-Free Workplace Act preempted such protections.

Because Bride Brook was a federal contractor, it was required to perform such drug tests—and had the firm still hired Noffsinger after the positive drug test, it would have been “defrauding” the federal government, the firm argued.

In a ruling issued last week, U.S. District Court Judge Jeffrey Alker Meyer disagreed.

While Meyer rejected Noffsinger’s requests for summary judgment and attorney’s fees, his ruling means that Noffsinger can now seek monetary damages in a jury trial.

The federal Drug Free Workplace Act requires only that employers make a “good faith effort” to maintain a drug-free workplace, Meyer ruled.

Such efforts include posting warnings about drug use and setting an office policy.

A “zero-tolerance” policy that includes actively testing and then rejecting protected applicants on the basis of a test go above and beyond that threshold, Meyer wrote.

A previous ruling in Noffsinger’s case, also by Meyer, was the first instance in which a federal judge ruled that the federal Controlled Substances Act does not preempt state medical-marijuana laws that provide employment protections.

Other classes of workers, including workers in “safety-sensitive” positions and employees of the federal government, may have to wait for similar protections.

Employers In Medical Marijuana States Can Still Drug Test Employees, Federal Judge Rules

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