A Delaware House committee approved a bill to legalize marijuana for adult use in the state on Wednesday.
The legislation would allow people aged 21 and older to possess, consume and purchase certain amounts of cannabis. It also contains a number of social equity provisions, including expungements for individuals with prior possession convictions.
The House Revenue & Finance Committee signed off on the bill in a 8 to 3 vote. It now heads to the full chamber for consideration.
“Both the public and elected officials are recognizing that cannabis prohibition is a failed policy and that was reflected in the committee’s approval of HB 110 today,” Olivia Naugle, legislative coordinator with the Marijuana Policy Project (MPP), told Marijuana Moment. “We hope the full House will now follow the committee’s lead and vote to replace prohibition with sensible regulation.”
A majority of lawmakers in the state’s House voted in favor of a separate legalization bill last year but, because it dealt with taxes and fees, it required votes from 60 percent of the chamber and fell short of that supermajority threshold for passage.
If the current legislation is ultimately approved and signed into law, legalization will see a gradual rollout. A state marijuana commissioner will be responsible for issuing licenses and regulating cannabis businesses. Initially, only 15 retailers will receive licenses; three years after the effective date, additional retailer licenses could be approved if there’s sufficient demand.
The commissioner will also issue licenses for five testing facilities, 50 cultivation sites and 30 product manufacturers. Applicants will be scored based on several factors, including their diversity objectives, environmental sustainability plans and what kinds of benefits they will offer employees.
Existing medical cannabis dispensaries will also have a licensing advantage. Home cultivation would not be allowed under the bill.
Prospective marijuana businesses would have to pay a $5,000 application fee. There would also be a biennial $10,000 licensing renewal fee for retailers, testing facilities and product manufacturers. A month after the effective date, an 11-month transition period will occur, with cannabis sales taxed at 25 percent. Once the transition is over, sales would be taxed at 15 percent.
Revenue from those taxes would cover the costs of regulating the program and then the legislature would be tasked with allocating any additional revenue to programs it deems fit.
In written testimony submitted to the committee, the former chief of staff to then-Colorado Gov. John Hickenlooper (D) said that he voted against his state’s adult use legalization measure in 2012—but that he now feels that was a mistake.
“Most of our elected officials and community leaders were convinced it would lead to increased teen marijuana use, destroy our economy, and hamper the tourism industry, and I shared some of their concerns,” Douglas Friednash wrote. “I’ve now had six-and-a-half years to see the effects firsthand. And, I can can tell you none of this has come true, and my opinion has changed.”
“I urge Delaware, and other states, to follow the lead of Colorado and nine other states and replace cannabis prohibition with thoughtful regulation,” he said.
Naugle, of MPP, also testified before the panel, arguing that the legalization legislation would free up law enforcement resources, disrupt the illicit market and generate significant revenue for Delaware.
A fiscal note for the bill estimated that annual costs associated with the program would be about $1.3 million, in addition to the one-time implementation cost projection of $444,000. Those costs would be offset by revenue gained through fees and taxes, however, with the legislation projected to bring in anywhere between $9.4 million to $23.6 million each year.
The Law Enforcement Action Partnership also voiced support for the reform move. Judge Gordon McAllister, a speaker for the advocacy group, said in a press release that a “cornerstone of our democracy is acknowledging that we can always do better,” which is what the legislation does.
“We must change laws to fit the needs and best interests of our communities,” he said.
The favorable committee vote follows the passage last week of a marijuana legalization bill in Illinois, which is now being transmitted to the desk of pro-reform Gov. J.B. Pritzker’s (D). In Delaware, Gov. John Carney (D) remains skeptical about regulating cannabis sales, though, meaning the legislation may still face obstacles if the full House and Senate approve it.
But Wednesday’s development also stands in contrast to legislative happenings in New York and New Jersey, where legalization bills have stalled. Leading lawmakers in New Jersey said that the issue will be placed on the 2020 ballot, leaving it up to voters instead. In New York, just days remain in the legislative session, with advocates pushing hard to get a pending legalization proposal a vote before time runs out.
Photo courtesy of WeedPornDaily.
Trade Associations And Civil Rights Groups Send Mixed Messages On Marijuana Banking To Senate
A coalition of trade associations sent a letter to Senate Banking Committee leadership on Thursday, urging a vote on legislation to protect financial institutions that service state-legal marijuana businesses.
But those senators are also feeling pressure from leading civil rights groups like the ACLU and Human Rights Watch, which sent an earlier letter insisting that they not allow cannabis banking to detract from more comprehensive reform that addresses social equity.
The organizations involved in the latest letter—including the American Bankers Association and Credit Union National Association—said that advancing the Secure and Fair Enforcement (SAFE) Banking Act or similar legislation is pivotal to ensuring that stakeholders receive needed clarity and are shielded from being penalized by federal regulators.
The letter, addressed to Banking Chair Mike Crapo (R-ID) and Ranking Member Sherrod Brown (D-OH), emphasized the bipartisan nature of the House passage of the bill in September and the growing movement at the state level to legalize cannabis for medical or recreational purposes.
“Our organizations support an initial legislative step that allows the legal cannabis industry into the banking system,” the groups, which also include the Council of Insurance Agents and Brokers, International Council of Shopping Centers and National Association of REALTORS, wrote. “Ultimately, protecting law-abiding financial institutions and ancillary businesses from their currently untenable position and addressing increasing public safety concerns.”
As more states reform their marijuana laws, however, “distribution, sale, possession, research, transaction, housing, employment, and a broader landscape of cannabis is becoming increasingly problematic” for stakeholders under federal prohibition.
“Ultimately, this creates more legal and security concerns that impact the operations and safety of businesses and consumers,” they said. “Finally, the lack of an available safe harbor for cannabis will continue to challenge the full adoption and deployment of the legal hemp and CBD products market in the U.S. due to the inextricable link between hemp and cannabis.”
“To resolve this, we urge the Committee to vote on the SAFE Banking Act or similar measures. Such measures are meant to create a safe harbor for depository institutions that provide a financial product or service to businesses in a state permitting the use of cannabis. A safe harbor will enable law enforcement and states to effectively monitor and regulate businesses while simultaneously bringing billions into the regulated banking sector.”
12 groups including ABA just wrote @MikeCrapo @SenSherrodBrown @senatemajldr @SenSchumer urging a vote on the #SAFEBanking Act. It's time to end the legal limbo over banking cannabis in the growing number of states where it's legal. Read the letter: https://t.co/1529vIHawq
— American Bankers Association (@ABABankers) December 12, 2019
The letter, also signed by Americans for Prosperity and R Street, recognizes that creating a federal regulatory scheme for marijuana will take time but says that the SAFE Banking Act represents “a critical first step to ensure that legal cannabis marketplaces are safe, legal, and transparent.”
Crapo has said that he’s interested in holding a vote on resolving the cannabis banking issue in his panel before the year’s end, but so far nothing has been scheduled. The chairman told Marijuana Moment in earlier interviews that there are several changes to the House-passed bill that he’d like to see but that he’s worried impeachment proceedings against the president will interfere with plans to hold a vote.
All that said, pressure from civil rights advocacy groups could complicate congressional efforts to get the banking bill approved. In October, several organizations including the ACLU, Drug Policy Alliance, Human Rights Watch and Center for American Progress sent a letter to Senate leadership, as well as Crapo and Brown, demanding that “marijuana legislation considered in the Senate include provisions that will guarantee equity in the industry.”
The letter, which doesn’t appear to have been previously reported and was obtained by Marijuana Moment, states that while the coalition agrees the SAFE Banking Act “is an incremental step toward rolling back the federal prohibition of marijuana, it fails to help communities that have been historically and disproportionately devastated by United States’ punitive drug laws.”
“As the Senate Committee on Banking, Housing, and Urban Affairs considers similar legislation, we insist that the legislation include provisions that ensure equity in the marijuana industry by creating opportunities for individuals who have been prohibited from this growing business either by legal or financial means,” the letter, which was also signed by the Immigrant Legal Resource Center, Leadership Conference on Civil and Human Rights and National Association of Social Workers, states.
“Indeed, this Congress has shown it understands the economic impact of legalization. But while progress on the business side of legalization is promising, it is not sufficient. Federal marijuana legislation must be comprehensive and lead with equity, addressing past and current harms to communities of color and low-income communities who bore the brunt of the failed war on drugs. We demand that any marijuana reform or legalization bill considered by the Senate] include robust provisions addressing equity. More than simply adding equity provisions to bills that address industry concerns, we need comprehensive reform that deschedules marijuana and addresses the inequities and harms continually inflicted by the failed war on drugs.”
In other words, the groups are insisting on broad reform prior to a vote on a bill viewed as largely beneficial to the cannabis industry—similar to a request they made of House members prior to the legislation’s passage in the chamber.
Read the marijuana banking letters from the trade associations and civil rights groups below:
GOP Congressman Knocks His Party For Failing To Pass Marijuana Reform
A Republican congressman says that whichever party is responsible for passing federal marijuana reform will “instantly” shoot up in the polls, while lamenting the fact that the GOP failed to do so when they controlled the House.
Rep. Thomas Massie (R-KY), a vocal advocate for hemp, was asked by Fox Business host Kennedy on Wednesday whether cannabis should be rescheduled under federal law.
“Absolutely,” he said. “The first party that does this—and I don’t understand why either party won’t do it—is going instantly gain 10 points in the general poll on which party versus the other.”
“We should have done it when we were in the majority,” he added. “The liberals should be asking Pelosi why she hasn’t put it on the floor yet.”
The House Judiciary Committee approved legislation last month to end federal marijuana prohibition, but it hasn’t yet been scheduled for floor action.
Massie made similar points during an interview with Marijuana Moment earlier this year, stating that if Republicans had advanced states’ rights-focused marijuana legislation, “I think we might still be in the majority.”
Of course, while Massie has supported legislation to allow states to set their own cannabis policies without federal intervention, as well as other more modest reform measures such as protecting banks that service marijuana businesses, he’s so far declined to cosponsor any bills that seek to deschedule cannabis.
The congressman has also expressed interest in changing federal gun control laws to allow cannabis consumers to purchase firearms.
Though it’s not clear exactly how much of a boost either party would get by passing a marijuana reform bill, a Pew poll released last month does show that there’s majority support for legalization among those who lean Republican (55 percent) as well those who lean Democratic (78 percent).
Photo courtesy of YouTube/Rep. Massie.
State Department Warns Travelers About Flying With Cannabis Oil Internationally
The U.S. State Department is warning international holiday travelers that while hemp-derived CBD might be legal in the U.S., it can land you in trouble if you take it certain places abroad.
“Make sure your gift isn’t a fa la la la la la la la la fail,” the department said in a tweet on Thursday. “Bringing along gifts like drones, CBD oils, and firearms can land you in trouble in foreign countries. Research what is and isn’t allowed before you travel.”
(Marijuana Moment’s editor provides some content to Forbes via a temporary exclusive publishing license arrangement.)
Photo courtesy of Flickr/DHS.