Denver made history on Tuesday after voters approved a ballot measure to decriminalize psilocybin mushrooms. But shortly after the final count was released, reform advocates were hit with a New York Times op-ed signed by an unexpected critic telling them to slow their roll.
Despite being written by Michael Pollan, who authored a popular book debunking myths about psychedelics and defending their therapeutic potential, the opinion piece triggered pushback over its suggestion that “ballot initiatives may not be the smartest way” to change psilocybin laws and that advocates should wait for federal approval before legalizing the substance for medical purposes.
“Debate is always a good thing, but I worry that we’re not quite ready for this one,” Pollan wrote of campaigns in California and Oregon that are seeking to get psilocybin reform on the states’ 2020 ballots.
Kevin Matthews, campaign director of Decriminalize Denver, the group behind the city’s successful decriminalization initiative, told Marijuana Moment that he generally respected Pollan and appreciated the cautionary tale his piece offered against flippant consumption of the powerful substance—but he disagreed with the author’s stance on the ballot initiative process and with feedback from the research community opposing voter-led reform.
“Ballot initiatives are a good way to do this because I think sometimes the researchers forget about the average person out there who is currently using,” Matthews said. “There is this underground that exists—and Michael Pollan utilized that underground that exists [for his book].”
“If there’s enough support for the ballot initiative process to make sense, then I think people should go for it.”
Pollan’s argument boils down to this: he personally supports decriminalization—after all, as he noted, he’s illegally used and propagated psilocybin—but he argued that more research is needed on the substance’s “immense power and potential risk” and “consequences of unrestricted use” before activists start broadly changing laws concerning the substance.
It’s a line of messaging that drug policy reform advocates have heard time and again with respect to cannabis from lawmakers who reject legalization because they feel existing research is insufficient.
“We still have a lot to learn about the immense power and potential risk of these molecules, not to mention the consequences of unrestricted use,” Pollan wrote. “It would be a shame if the public is pushed to make premature decisions about psychedelics before the researchers have completed their work.”
The thing about that argument is that researchers have already uncovered evidence that psilocybin can be useful in the treatment of various mental health conditions such as post-traumatic stress disorder, addiction and depression.
Pollan understands those scientific findings well, but his op-ed shifts from lifting up the medical potential of the ingredient to urging caution against acting on those findings through ballot initiatives until researchers are satisfied.
“The more research we need should not impact whether or not we decriminalize it,” Matthews countered. “The more research we need is exploring its anti-addictive potential. One thing I hear is, ‘What are the long term impacts of use?’ We probably need more research there. But there’s no reason for people to go to jail for this if they’re not causing harm to others or themselves.”
The reality is that people across the U.S. are currently being criminalized for use and personal production of psilocybin mushrooms—a situation that can only be alleviated by voter-led ballot measures as long as lawmakers refuse to touch the issue.
After his piece generated considerable pushback on Twitter, Pollan clarified in a tweet that “this piece supports decriminalization, just not legalization now.” That message seemed to have been lost in translation, though, which is understandable given the author’s reference to campaigns that are simply seeking to decriminalize psilocybin before advocating against ballot initiatives.
If Pollan’s op-ed were published prior to the Denver vote, it is easy to imagine a situation where some number of the 1,979 voters who comprised the narrow margin between ‘yes’ and ‘no’ changed their minds because they read an essay from one of the nation’s foremost psychedelic advocates telling them that ballot measures “may not be the smartest way” to advance the issue.
Reading will reveal that this piece supports decriminalization, just not legalization now. Opinion | Michael Pollan: Not So Fast on Psychedelic Mushrooms – The New York Times https://t.co/vukBw2q2w8
— Michael Pollan (@michaelpollan) May 10, 2019
That aside, more careful consideration of broader legalization is an area where Pollan and Matthews agree. After all, voter confusion about whether the Denver measure would allow people to purchase so-called “magic mushrooms” in shops—it does not—likely led some to vote against Initiative 301.
“I think the focus needs to be decriminalization. We should not be talking about necessarily a regulated medical model right now,” Matthews said. “I think decriminalization is the right first step because we need to make sure that people’s individual rights are protected, and really the only way to do that is by decriminalizing and making sure people are not receiving any kind of fines for possession.”
But while Pollan is urging caution, insisting that voters should wait for something akin to Food and Drug Administration approval before moving ahead on broad psilocybin reform, Matthews is striving to ensure that the Denver measure is quickly and effectively implemented, and to further spread awareness about the benefits of psilocybin through educational outreach.
When the first round of votes came out on Tuesday at 7:00 PM MT, showing the initiative behind by about 10 points, the “air got sucked out of the room like a space capsule getting a hole punched in it” at the main campaign watch party, Matthews said. But throughout the night, the gap narrowed. Victory became within reach.
When the final unofficially tally was finalized at approximately 4:20 PM MT the next day, Matthews said he “just started screaming and crying at the same time. Dogs started barking in the background.”
“What a trip,” he said, “no pun intended.”
But as the high of the success waned, Matthews recognized the momentous responsibility ahead of him, as one of the leaders of a historic campaign that will be looked at as activists attempt similar feats across the country. In spite of Pollan’s advice, Matthews has no intention of slowing down now.
Photo courtesy of Wikimedia/Workman.
Marijuana Banking Bill Would Save Federal Money, Congressional Budget Office Says
The federal government would save money if a bipartisan bill to give marijuana businesses access to banks is approved, according to a report released by the Congressional Budget Office (CBO) on Friday.
The legislation, which cleared the House Financial Services Committee in a bipartisan vote of 45 to 15 in March, would change federal law to protect financial institutions that service the cannabis industry from being penalized by regulators. That reform would set off a chain of events, beginning with a likely increase in the number of banks accepting deposits from those businesses, CBO reasoned.
Assuming the bill takes effect near the end of the 2019 fiscal year, the office estimates that starting in 2022, banks would see a $1.2 billion increase in deposits, and credit union deposits would grow by $200 million. By 2029, the amounts “would rise to $2.1 billion and $350 million, respectively.”
Because those deposits would have to be insured through the Federal Deposit Insurance Corporation (FDIC) and the National Credit Union Administration (NCUA), the CBO took into account the possibility that individual financial institutions will fail, and the estimated cost of resolving those failures is $5 million.
That said, those direct spending costs would be “offset by assessments levied on insured financial institutions,” which would amount to about $9 million.
“As a result, CBO estimates, H.R. 1595 would decrease net direct spending by $4 million over the 2019-2029 period,” the office reported.
Rep. Ed Perlmutter (D-CO), the bill’s chief sponsor, told Marijuana Moment that its enactment would have benefits beyond fiscal savings.
“Getting cash off our streets and making our communities safer will come at no cost to the federal government and actually save money while providing a much-needed long-term banking solution for legitimate marijuana businesses across the country,” he said.
“This CBO score should only increase the significant momentum in Congress behind passing the SAFE Banking Act,” Neal Levine, CEO of the Cannabis Trade Federation, told Marijuana Moment. “It is now apparent that we can help diminish a serious threat to public safety at no net cost to the federal government. We look forward to the bill passing through the House and hope the Senate will follow suit.”
There are some implementation costs to take into account, CBO says. The administrative costs are estimated to be $3 million. But the FDIC and NCUA are able to charge premiums on the financial institutions they regulate to cover much of those costs. The total net administrative costs would, therefore, be about $1 million.
The Federal Reserve would also have to spend funds to implement the bill, and that would reduce remittances to the Treasury Department. Those remittances are considered revenue, which is expected to decrease by about $1 million if the legislation is implemented.
Then there are costs related to other provisions of the bill. Financial regulators would have to update and issue new guidance, which would “cost less than $500,000 over the 2019-2024 period.”
The legislation also requires the Government Accountability Office to study barriers to entry in the marijuana industry and to financial services for minority- and women-owned cannabis businesses. The costs are estimated to be less than $500,000 annually from 2020 to 2024.
The CBO also estimated that enacting the legislation “would not increase on-budget deficits by more than $5 billion in any of the four consecutive 10-year periods beginning in 2030.”
The CBO outlined “several noteworthy areas of uncertainty” that could change the calculus.
1. New guidance from federal financial regulators could be more or less stringent than existing guidance implemented under the Obama administration, which could impact the amount of deposits banks and credit unions will receive.
2. Data on cannabis-related deposits is currently “limited,” as federal restrictions have forced marijuana businesses to operate on a largely cash basis. That means CBO’s estimates on the amount of deposits financial institutions will see could end up being “greater or smaller.”
3. If those estimates do end up being different, costs associated with the bank and credit union insurance funds “could be higher or lower depending on the amount of premium collections and capital deposits and on changes in the resolution costs for financial institutions.”
Sahar Ayinehsazian, an associate attorney at Vicente Sederberg LLP who specializes in cannabis banking, told Marijuana Moment that most of the figures lined up with her expectations. However, given that many marijuana businesses have gravitated toward credit unions rather than banks, she said the estimate increase in deposits to those financial institutions may well end up being larger.
“Looking at the chances of this legislation passing from an economic standpoint, I think [the CBO score is] good news,” she said.
Other advocates agreed that the CBO estimate should help efforts to advance the bill.
“For years, cannabis advocates have been preaching the net benefits SAFE Banking would have on consumers, patients, financial institutions, regulators and taxpayers. This CBO cost estimate confirms that,” Michael Correia, director of government relations for the National Cannabis Industry Association, told Marijuana Moment. “The increase of insured deposits, coming from the added certainty this legislation brings, far outweighs the minor administrative costs to implement this bill.”
The House marijuana banking bill currently has 184 cosponsors, and a companion Senate version has 30 lawmakers signed on. The committee of jurisdiction in the upper chamber has not yet set a hearing or a vote, but pressure is increasing.
Banking associations from all 50 states urged the Senate to take up the legislation earlier this week. Other organizations that have called for a resolution to the cannabis banking dilemma include the National Association of Attorneys General, which has endorsed the bill, and the National Association of State Treasurers, representing state treasurers and finance officials, which adopted a resolution last week in favor of the legislation’s passage.
Want 4 million more reasons why members of Congress should support the #SAFEBankingAct, which would allow cannabis businesses to access the banking system in the 33 states where it’s legal? @USCBO says the legislation will save taxpayers $4M over 10 years.
— American Bankers Association (@ABABankers) May 24, 2019
The new analysis is just the third time that the CBO, which is mandated to score bills that pass full committees, has issued a report on the economic impact of standalone cannabis legislation. The agency scored two marijuana research bills that cleared committees last year.
This story was updated to include comment from Perlmutter and Correia.
Federal Small Business Administration Pressed On Supporting Marijuana Industry
Sen. Jacky Rosen (D-NV) pressed a federal official responsible for advocating for small businesses on Wednesday about whether existing laws and regulations are preventing the growth of state-legal marijuana markets.
The line of questioning comes as members of Congress are preparing legislation aimed at removing barriers to small business assistance for cannabis industry participants.
The senator said at a hearing of the Senate Small Business and Entrepreneurship Committee that her state’s legal industry is attracting small businesses and entrepreneurs who are selling millions of dollars of product each month. She asked Major Clark, acting chief counsel of the office of advocacy at the Small Business Administration (SBA), about the unique barriers these companies face under federal prohibition.
“Senator, that’s a difficult question,” Clark replied. “We have not actually studied the issue of marijuana in that regard, and we have not because the federal government has not yet legalized it.”
“We do, in conversations with a lot of businesses, get inquires as to what they can do and how they can do it. But to actually do an analysis of it, we have not yet done that,” he said. “I’m sure that as soon as the federal government decides to legalize this substance, we will begin to study its impact and the ability to use it in a more economical context within the state.”
Watch the conversation about small business assistance for cannabis operators at 35:50 in the video below:
Rosen followed up to get Clark’s opinion about whether marijuana companies would benefit from some of the guidelines and resources the SBA offers to small businesses in other industries.
“These types of businesses can benefit from some of these types of things, but again, because this issue is an issue that has not reached the surface of being legalized, we have actually stayed away from trying to advise these businesses on these particular aspects,” he said.
Nevada’s cannabis industry cannot thrive without access to financial services. At yesterday’s @SmallBizCmte hearing, I asked what steps @SBAgov is taking to break down regulatory barriers for our nation’s legal marijuana businesses to ensure they can continue to grow. pic.twitter.com/lyfXGwpoRf
— Senator Jacky Rosen (@SenJackyRosen) May 24, 2019
Sen. James Lankford (R-OK), chair of the committee, weighed in on the issue after the Rosen’s time expired, saying that he recognizes the difficulty that federal agencies face when it comes to regulating a controlled substance.
“It is a unique challenge dealing with a Schedule I drug on the federal side and to also know that some states, including my own, have said that they want to allow it,” Lankford said, referring to the medical cannabis law that Oklahoma voters approved in 2018. “And the federal government and the [Food and Drug Administration] continues to study it and say there’s no medicinal gain from this product.”
“It’s a Schedule I drug. I get it,” he said. “The science, and whether it is SBA or whoever it is continues to be able to deal with that.”
While lawmakers push to get marijuana businesses access to federally authorized financial services, industry advocates say that SBA-specific reform legislation may be on the horizon.
The day after Rosen questioned the SBA official about cannabis policy, Khurshid Khoja, a board member for the National Cannabis Industry Association, said at a press conference on Capitol Hill that a bill was being drafted to “essentially get SBA services for cannabis businesses and for cannabis businesses from disproportionately impacted communities.”
Watch the SBA reform discussion at about 32:15 in the video below:
“The House Small Business Committee is looking into the issue and is interested in holding a hearing and drafting legislation this summer that addresses these issues,” a cannabis policy lobbyist who didn’t wish to be named in order to discuss plans that are in development, told Marijuana Moment separately.
Photo courtesy of Brian Shamblen.
GOP Congressman Exposes Flaws In VA Marijuana Research Projects
Rep. Matt Gaetz (R-FL) emphasized the importance conducting clinical trials on medical marijuana at the U.S. Department of Veterans Affairs (VA) on Tuesday, a topic on which he has often focused.
He also criticized the catch-22 of VA cannabis research, arguing that while the department is able to conduct clinical trials on marijuana, it doesn’t effectively publicize those studies, leaving veterans who might be interested in participating in the dark.
The congressman started by asking whether Mike Colston, director of mental health policy and oversight at the Department of Defense, felt that giving veterans access to medical cannabis could reduce suicides.
Colston said “there’s far more research to be done” and that there’s “insufficient evidence for or against that position.”
Gaetz cited research showing reductions in opioid use in states that have loosened cannabis laws, and he questioned whether “the current offramp for opioid addiction,” which typically involves prescribing long-term opioids that are less potent and less prone to abuse, “is a more effective offramp than medical cannabis.”
“I just think those are the three evidence-based therapies right now that meet the medical bar,” Colston said, referring to bupenehprine, methadone and naltrexone. “Obviously more research can change that.”
That prompted Gaetz to expand on VA policy as it pertains to medical cannabis. He asked for confirmation that the department’s doctors cannot currently recommend marijuana to veterans in states where it’s legal.
They can’t do that because “there’s a federal law against it right now,” Keita Franklin, national director of suicide prevention at the VA, claimed. (This has been a point of contention for legalization advocates, who argue that only the VA’s own internal administrative policies, and not an overarching federal law, blocks such recommendations.)
But VA officials can conduct clinical trials on marijuana, Franklin said.
“We have two ongoing research studies going on right now in this space,” she said. “I think we are open to research, yes.”
The congressman wanted to know if the VA publishes information about these studies and where to find it. The VA official wasn’t sure—and that was exactly Gaetz’s point.
“I don’t think anyone is clear, which is the source of my frustration because I think that there are a lot of these clinical trials that are seeking veterans,” he said. “The VA, due to a lack of clarity, won’t publicize that information or make it available, and then we’re unable to do the research that Captain Colston says is necessary to advance additional options for veterans trying to get off opioids and to stop them from killing themselves.”
Lawmakers have introduced legislation this session that would allow VA doctors to issue medical cannabis recommendations and require the department to conduct clinical trials on the plant’s potential therapeutic benefits for veterans, among other cannabis and veterans-related bills.
But if the VA is mandated to research the plant, Gaetz wants the department to better publicize the studies so that would-be participants actually know about them.
Photo courtesy of YouTube.