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Eleven Senators Push To Let Marijuana Businesses Access Federal Loan Programs

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Eleven senators sent a letter to leadership in a key committee asking that they add a provision allowing marijuana businesses to access federal loan services in an upcoming annual spending bill.

In the letter, led by Sen. Jacky Rosen (D-NV), the lawmakers told the Appropriations Committee that it should “include report language prohibiting the Small Business Administration (SBA) from denying loan applications” to cannabis firms as part of the fiscal year 2021 spending bill for Financial Services and General Government and Related Agencies.

“Over the last decade, there has been a clear shift in public opinion toward supporting the legalization of cannabis in the United States,” the letter, which was shared with Marijuana Moment, states.

While the number of legal marijuana states continues to grow, and those jurisdictions continue to collect millions of dollars in tax revenue, SBA policy prohibits participation in their programs by companies that directly or indirectly “aid the use, growth, enhancement, or other development of cannabis” by providing marijuana products or services.

“Consequently, small businesses in states with some form of legal cannabis must choose between remaining eligible for SBA loan programs, or doing business with a rapidly-growing and legal industry,” the senators wrote. “The SBA’s loan programs provide financial assistance in the form of loans and loan guarantees to small businesses who cannot easily access capital, which disproportionally impacts minority entrepreneurs.”

SBA services that marijuana companies should be eligible for include the Loan Guarantee Program, Disaster Assistance Program and Microloan Program, the group said.

The letter also notes that “most banks are reluctant to serve cannabis businesses due to conflicts with federal law, meaning that these businesses often are forced to operate using purely cash, creating an unsafe operation.”

“SBA loans would be especially helpful to cannabis small businesses because they would fill gaps left by the private sector. Access to these SBA loan programs could ensure that small businesses—especially those led by our minority, women, and veteran entrepreneurs—can raise money for their ventures and support job creation. We strongly support ensuring that SBA loan programs are made available to all cannabis small businesses.”

Sens. Ron Wyden (D-OR), Tammy Duckworth (D-IL), Michael Bennet (D-CO), Kirsten Gillibrand (D-NY), Bernie Sanders (I-VT), Ed Markey (D-MA), Cory Booker (D-NJ), Bob Menendez (D-NJ), Jeff Merkley (D-OR) and Kamala Harris (D-CA) joined Rosen in signing the letter.

“In this time of crisis and unprecedented federal support for the economy, Congress should not allow all of the small and midsize cannabis businesses to be excluded by the SBA,” Justin Strekal, political director of NORML, told Marijuana Moment. “Be it in the appropriations package or the next round of stimulus, this is a common sense solution will help protect jobs in 33 states and provide much needed support to Main Street small businesses.”

In recent days, advocates have stepped up the push to include provisions for marijuana businesses in an upcoming fourth round of coronavirus relief legislation.

Rosen has paid close attention to the SBA restrictions for cannabis companies. She raised the issue during a hearing with an SBA official last year, pressing him about whether the agency has looked into the unique challenges that small businesses in the marijuana industry faces under the current policy.

SBA did confirm last week that cannabis companies do not qualify for disaster relief loans amid the coronavirus pandemic. At the same time, the agency has touted its work in support of hemp businesses following that crop’s legalization through the 2018 Farm Bill.

It remains to be seen whether any lawmakers will take up the industry’s call to insert language providing for marijuana industry relief in the next COVID-related stimulus bill.

A coalition of marijuana industry trade groups—including the National Cannabis Industry Association, National Cannabis Roundtable, Minority Cannabis Business Association and Cannabis Trade Federation—signed a joint letter last month, urging congressional leaders to lift restrictions and allow cannabis businesses to obtain the same relief as any other legitimate market.

Read the senators’ letter on federal aid for marijuana businesses below: 

FY2021 FSGG SBA Loan Progra… by Marijuana Moment on Scribd

Photo courtesy of Philip Steffan.

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Nine Members Of Congress Tell DEA To Revise Proposed Hemp Rule On THC Content

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Nine members of Congress sent a letter to the Drug Enforcement Administration (DEA) on Tuesday, urging the agency to revise its proposed hemp regulations.

DEA released an interim final rule (IFR) for the crop in August, and it said the regulations were simply meant to comply with the 2018 Farm Bill that legalized hemp and its derivatives. But stakeholders and advocates have expressed serious concerns about certain proposals, arguing that they could put processors at risk of violating federal law and hamper the industry’s growth.

Reps. David Joyce (R-OH) and Denver Riggleman (R-VA) led the letter and pointed specifically to a provision of DEA’s IFR that could impact processing hemp extracts. The agency stipulated that “any such material that contains greater than 0.3% of Δ9-THC on a dry weight basis remains controlled in schedule I.”

That’s problematic, the lawmakers said, because in many cases the process of extracting cannabinoids from hemp temporarily causes THC levels to increase beyond that threshold. And so while Congress intended to legalize those extracts, businesses that produce the materials could find themselves inadvertently breaking the law.

“Our offices have received countless calls from constituents involved in the hemp industry who are extremely fearful that simply following the provisions of the Farm Bill will result in criminal liability under the IFR,” the lawmakers’ letter states. “The IFR will likely have the effect of inhibiting these nascent state hemp programs thereby harming those American companies and workers who chose to pursue careers in the hemp industry and made significant investments to effectuate those aspirations.”

Therefore, the lawmakers are “requesting a resolution to this issue as quickly as possible,” adding that “DEA must revise the IFR to eliminate the ambiguities set forth above and provide peace of mind to all Americans who have chosen to pursue a career in the hemp industry.”

Reps. Rodney Davis (R-IL), Morgan Griffith (R-VA), Glenn Grothman (R-WI), Don Young (R-AK), Anthony Gonzalez (R-OH), Earl Blumenauer (D-OR) and Matt Gaetz (R-FL) also signed the letter.

A public comment period on DEA’s proposed rules closed on Tuesday. It saw more than 3,300 submissions, many of which focused on issues with the “work in progress” hemp THC issue.

“This IFR’s criminalizes work in progress hemp extract, a fundamental component of any consumer hemp/CBD product, and will negatively impact the hemp/CBD industry at a time when financial pressure is already high,” one commenter wrote. “Hemp and subsequent extracts are not controlled substances.”

Another issue identified by more than 1,000 commenters concerns delta-8 THC. The most widely known cannabinoid is delta-9 THC, the main component responsible for creating an intoxicating effect, but delta-8 THC from hemp is also psychoactive and is an object of growing interest within the market.

Because DEA’s proposed regulations state that all “synthetically derived tetrahydrocannabinols remain schedule I controlled substances,” some feel that would directly impact the burgeoning cannabinoid, as its converted from CBD through the use of a catalyst—and that could be interpreted as a synthetic production process.

In any case, it’s not clear whether DEA deliberately crafted either of these rules with the intent of criminalizing certain hemp producers—but stakeholders and advocates aren’t taking any chances.

The U.S. Department of Agriculture (USDA) has faced separate criticism over its own proposed hemp rules, though it has been more proactive in addressing them. Following significant pushback from the industry over certain regulations it views as excessively restrictive, the agency reopened a public comment period, which also closed this month.

USDA is also planning to distribute a national survey to gain insights from thousands of hemp businesses that could inform its approach to regulating the market.

Read the congressional coalition’s letter to DEA on its hemp rule below: 

DEA IFR Letter by Marijuana Moment

State And Local Marijuana Regulators Demand Congress Prioritize Federal Legalization Bill

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Pennsylvania House Votes To Protect Medical Marijuana Patients From DUI Charges

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The Pennsylvania House of Representatives approved an amendment on Tuesday that would protect medical marijuana patients from being penalized under the state’s DUI laws for using their legal medicine.

The proposal cleared the chamber as an amendment to a broader piece of legislation concerning motor vehicle policies. It passed in a 109-93 vote.

As it stands, registered medical cannabis patients can be convicted of driving under the influence of a controlled substance if THC metabolites are detected in their blood. That’s despite the fact that marijuana can remain present in the body well after someone is considered impaired.

The House-approved amendment, which is now attached to a bill previously passed by the Senate, exempts “marijuana used lawfully in accordance with” the state’s medical cannabis law from DUI statutes.

“I think that you can ask any veteran or anybody that’s using medical cannabis right now, if they took the prescription on Monday, [on] Wednesday, they’re not high,” Rep. Ed Gainey (D) said in a floor speech before the vote. “And if they got pulled over, they darned shouldn’t be charged for being intoxicated or under the influence of medical marijuana.”

“I think we’re putting an undue burden on the people of Pennsylvania if we’re saying this is what we want to do after we fought so hard to pass medical marijuana and we know what it’s done to help the people of Pennsylvania,” he said.

The amendment is similar in intent to separate standalone legislation introduced by Sen. Camera Bartolotta (R) in June to end the “zero tolerance” DUI policy for medical marijuana.

While Pennsylvania legalized medical cannabis in 2016, with the first dispensaries opening two years later, the law has not caught up as it concerns impaired driving. A person can test positive for THC for weeks after last consuming marijuana, rendering traditional roadside tests incapable of determining active impairment.

Several legal cannabis states have enacted per se THC limits in blood, similar to blood alcohol requirements. However, evidence isn’t clear on the relationship between THC concentrations in blood and impairment.

A study published last year, for example, concluded that those who drive at the legal THC limit—which is typically between two to five nanograms of THC per milliliter of blood—were not statistically more likely to be involved in an accident compared to people who haven’t used marijuana.

Separately, the Congressional Research Service in 2019 determined that while “marijuana consumption can affect a person’s response times and motor performance… studies of the impact of marijuana consumption on a driver’s risk of being involved in a crash have produced conflicting results, with some studies finding little or no increased risk of a crash from marijuana usage.”

The modest cannabis DUI reform approved by the Pennsylvania House comes amid repeated calls from the state’s leaders to more broadly legalize marijuana for adult use.

Last week, Gov. Tom Wolf (D) in a speech stressed that marijuana reform could generate tax revenue to support the state’s economic recovery from the coronavirus pandemic and that ending criminalization is necessary for social justice.

That marked the third time in three months that the governor has held events focused on making the case for legalization. Last month, he took a dig at the Republican-controlled legislature for failing to act on reform in the previous session. And in August, he suggested that the state itself could potentially control marijuana sales rather than just license private retailers as other legalized jurisdictions have done.

Lt. Gov. John Fetterman (D), a longstanding legalization advocate, has been similarly vocal about his position. In speeches and on social media, the official has expressed frustration that Pennsylvania has yet to enact the policy change, especially as neighboring like New Jersey are moving in that direction.

He said last month that farmers in his state can grow better marijuana than people in New Jersey—and that’s one reason why Pennsylvania should expeditiously legalize cannabis before voters next door in the Garden State enact the policy change this November.

Fetterman also recently hosted a virtual forum where he got advice on how to effectively implement a cannabis system from the lieutenant governors of Illinois and Michigan, which have enacted legalization.

While Wolf initially opposed adult-use legalization, he came out in support of the reform last year after Fetterman led a statewide listening tour last year to solicit public input on the issue.

Shortly after the governor announced that he was embracing the policy change, a lawmaker filed a bill to legalize marijuana through a state-run model.

A majority of Senate Democrats sent Wolf a letter in July arguing that legislators should pursue the policy change in order to generate revenue to make up for losses resulting from the COVID-19 pandemic.

State And Local Marijuana Regulators Demand Congress Prioritize Federal Legalization Bill

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Montana Supreme Court Rejects Challenge To Marijuana Legalization Initiative

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The Montana Supreme Court on Wednesday rejected a lawsuit seeking to invalidate a marijuana legalization initiative that will appear on the state’s November ballot.

With weeks before the election, opponents asked the court to quash the measure, arguing that because it involves appropriating funds, it violates state statute on citizen initiatives.

The court didn’t weigh in on the merits of the challenge; rather, it said the petitioners with the campaign Wrong for Montana (WFM) failed to demonstrate “urgency or emergency factors” that would justify moving the case into its jurisdiction instead of going through trial and appeals courts first.

It left the door open for the opponents to take its challenge through the traditional process. Brian Thompson, the attorney representing the plaintiffs, told Marijuana Moment that they now intend to file the suit in district court “soon,” but he wasn’t able to provide an exact timeline.

“We express no opinion on the merits of WFM’s constitutional challenge, nor to its right to pursue this challenge in district court,” the justices wrote. “However, WFM’s claim does not present an appropriate basis on which to invoke this Court’s original jurisdiction. Even if it did, WFM has wholly failed to establish that urgency or emergency factors make litigation in the trial courts and the normal appeal process inadequate.”

Dave Lewis, policy advisor to the pro-legalization New Approach Montana, said in a press release that this “was an easy decision for the Montana Supreme Court.”

“At best, this lawsuit was a frivolous longshot,” he said. “At worst, it was an intentional effort to create confusion right before the election.”

The measure in question would establish that adult-use marijuana system. The lawsuit did not target a separate, complementary initiative that would specify that only those 21 and older could participate in the legal market.

It is the case that state statute says citizens “may enact laws by initiative on all matters except appropriations of money and local or special laws” and that the initiative does allocate cannabis tax revenue to certain programs. But prior measures that have appeared on the state’s ballot have done so as well.

Under the proposal, half of the public revenue generated from marijuana sales would go toward environmental conservation programs—a provision that earned the campaign key endorsements last month.

The initiative is already on the ballot and voting has started, so presumably if the court had sided with the plaintiffs, the votes simply wouldn’t have been counted or implementation would have been prevented. It is also possible that a court could rule that monies raised by legal cannabis sales under the initiative would simply into the state’s general fund instead of toward the specific programs delineated in its current text.

“We’re receiving strong support from voters across the state,” Lewis, who is a former Republican state senator and former budget director for three Montana governors, said. “Instead of making a coherent argument against the initiatives, our opponents tried to deprive Montanans of their constitutional right to a citizen initiative process.”

“Our opponents are desperately throwing everything at the wall in the hope that something sticks,” he added. “They’re resorting to fear tactics and misinformation because they know that a majority of Montana voters are ready to vote yes on legalizing, regulating, and taxing marijuana for adults 21 and over.”

In neighboring Nebraska, the state Supreme Court did rule last month that a measure to legalize medical cannabis that had qualified for the November ballot could not proceed because it violated the state’s single-subject rule for ballot initiatives.

Recent polling indicates that Montana voters are positioned to approve the legalization proposal. Forty-nine percent of respondents in a survey released last week said they support the policy change, with 39 percent opposed and 10 percent remaining undecided.

This story has been updated to include comment from Thompson.

Read the Montana Supreme Court’s ruling on the marijuana challenge and the original lawsuit below:

Montana Marijuana Lawsuit by Marijuana Moment

Colorado Governor Tells Texas Not To Legalize Marijuana So His Own State Can Get More Tourists

Photo elements courtesy of rawpixel and Philip Steffan.

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