The Federal Bureau of Investigation (FBI) is actively seeking tips on public corruption related to the marijuana industry, it announced on Thursday.
“States require licenses to grow and sell the drug—opening the possibility for public officials to become susceptible to bribes in exchange for those licenses,” FBI Public Affairs Specialist Mollie Halpern said on a short podcast the bureau released. “The corruption is more prevalent in western states where the licensing is decentralized—meaning the level of corruption can span from the highest to the lowest level of public officials.”
It is not known if any specific incident or ongoing investigation prompted the cannabis-focused episode of the FBI This Week podcast, though the bureau argued that as legalization spreads, “states should expect the corruption problem to increase.”
In March, the Los Angeles Times published an article looking at several instances of alleged public corruption related to cannabis licensing in California. Such incidents include the case of a mayor pro tem who was charged with taking a bribe to fast-track approval for a marijuana business and a congressional staffer who was found guilty of accepting cash from an undercover FBI agent after pledging to defend a cannabis dispensary from being closed by local officials.
“We’ve seen in some states the price go as high as $500,000 for a license to sell marijuana. So, we see people willing to pay large amounts of money to get in to the industry,” Supervisory Special Agent Regino Chavez said in the podcast.
NORML Executive Director Erik Altieri said he agrees that federal law enforcement has a role to play in stopping bad actors in the cannabis industry.
“As awkward as it feels to sort of side with the FBI, it is imperative that states ensure the licensing for cannabis businesses is an open and fair process,” he said. “NORML believes that we need to lower barriers to entry in the emerging legal marijuana market so it allows for small consumer oriented businesses to thrive and provides support for equity programs that would let those who were most targeted by, and suffered under, our decades long failed war on marijuana to benefit from its now legal status.”
“Cronyism, corruption, and corporate takeovers are not unavoidable side effects of legalizing marijuana and they should be rooted out immediately,” he said.
Morgan Fox, media relations director for the National Cannabis Industry Association, said that while the FBI’s call for tips “strikes me as a fishing trip” because marijuana-related public corruption doesn’t appear to be an especially prevalent problem, he agreed with NORML’s Altieri that regulatory changes are needed.
“An easy way to avoid corruption becoming an issue is to get rid of arbitrary license caps and lower the barriers of entry for the industry,” Fox said. “Not only would this make it easier for small businesses and people from marginalized communities to enter the industry, but it stops licenses from being treated as limited commodities that are so valuable that people may be willing to obtain them through unethical means.”
“Competition belongs in the market, not in the license application process,” he said.
As an increasing number of states change their marijuana legislation, the #FBI is seeing a public corruption threat emerge in the expanding cannabis industry. https://t.co/LNqEpJcjcT pic.twitter.com/reMhDZstAk
— FBI Pittsburgh (@FBIPittsburgh) August 16, 2019
The just-over-one-minute segment ends with a plea for listeners who “suspect a dispensary is operating with an illegally obtained license, or suspect public corruption in the marijuana industry” to contact their local FBI field office.
Congressional Bill Requires Legal Marijuana States To Consider Impaired Driving Policies
Democratic leadership in a House committee introduced a bill on Wednesday that includes a provision requiring legal marijuana states—and only those states—to consider ways to promote education about the dangers of cannabis-impaired driving while curbing such behavior.
The chairman of the House Transportation and Infrastructure Committee filed the legislation, which is also being cosponsored by several chairs of subcommittees under the panel. While the main thrust of the INVEST in America Act is aimed at promoting the completion of various long-term infrastructure projects, it also features language concerning cannabis policy.
Under the bill, a section of current law requiring that states establish highway safety programs would be amended to add a section stipulating that states “which have legalized medicinal or recreational marijuana shall consider programs in addition to the programs…to educate drivers on the risks associated with marijuana-impaired driving and to reduce injuries and deaths resulting from individuals driving motor vehicles while impaired by marijuana.”
Reform advocates support measures to reduce impaired driving, but there may be some who take issue with the provision given the implication that legalizing marijuana increases the risk of people driving while impaired. Research isn’t settled on that subject.
A congressional research body said in a report last year that concerns expressed by lawmakers that cannabis legalization will make the roads more dangerous might not be totally founded. In fact, the experts tasked by the House and Senate with looking into the issue found that evidence about cannabis’s ability to impair driving is currently inconclusive.
Beside that contention, the legislation seems to neglect to take into account that cannabis-impaired driving isn’t exclusive to legal states and that public education could be beneficial across all states regardless of their individual marijuana policies.
“It is somewhat absurd to draw a differentiation between states when it comes to the current legal status, because it is entirely feasible that every state will be legalized by the end of this decade,” NORML Political Director Justin Strekal told Marijuana Moment. “And regardless, I have heard rumors that some Texans consume cannabis despite its prohibited status.”
Transportation Committee Chairman Peter DeFazio (D-OR) said in a press release that the overall bill “is our opportunity to replace the outdated systems of the past with smarter, safer, more resilient infrastructure that fits the economy of the future, creates millions of jobs, supports American manufacturing, and restores U.S. competitiveness.”
Subcommittee on Highways and Transit Chairwoman Eleanor Holmes Norton (D-DC) and Subcommittee on Railroads, Pipelines and Hazardous Materials Chairman Dan Lipinski (D-IL) are also sponsoring the legislation, which is scheduled for a full committee vote on June 17.
U.S. Virgin Islands Governor Touts Legal Marijuana’s Economic Potential At Revenue Meeting
The governor of the U.S. Virgin Islands (USVI) on Tuesday again stressed the need to legalize marijuana in order to generate tax revenue for the territory’s fiscal recovery from the coronavirus pandemic.
Gov. Albert Bryan Jr. (D), who unveiled a revised legalization bill last month and pushed legislators to promptly take it up, discussed the projected economic impact of the policy change at a revenue conference.
During the virtual meeting, he pulled up a spreadsheet that breaks down estimates for annual cannabis sales from residents and tourists, as well as potential revenue from taxes and fees.
Cruise passengers and non-resident hotel guests will make approximately $43 million in annual marijuana purchases, the estimate from an independent firm states. Residents, meanwhile, are projected to spend about $38 million on cannabis each year.
“This doesn’t include what we would call the second and third turns in the economy in term of products being bought like lamps and fertilizer, jobs being created, dispensary jobs. None of that,” the governor said.
Watch the governor discuss marijuana legalization’s economic impact, starting around 3:10:35 into the video below:
In terms of revenue, the territory can expect to take in about $11 million annually from tourists, who will be taxed at 25 percent for marijuana products. Residents, who will be taxed at a much lower rate, will contribute about $3 million in taxes. All told, the territory is estimated to generate nearly $18 million in cannabis sales tax revenue per year.
Additionally, the analysis projects that USVI will receive $12.1 million from licensing fees and a cultivation tax. Point of sale permits for cruises and hotels will bring in another $3.6 million.
It all adds up to “a $33 million deposit in our treasury due to cannabis sales,” Bryan said, characterizing the projections as conservative estimates.
The governor said he wanted to highlight these figures to conference attendees “to show you quickly what this could mean to the territory should we have this enacted and we go to work.”
“Of course, it’s going to take some work to get this done,” he said. “But we need to get this measure done as quickly as possible in order to start impacting our economy in a very positive way.”
Bryan has previously said that beyond helping to offset some of the financial damage that COVID-19 outbreak has created, establishing a legal cannabis market would provide funding for the territory’s retirement system for government employees.
After he first proposed the policy change and directed the legislature to take up the issue in a special session late last year, several legislators voiced opposition to specifics of the proposal.
Some questioned the notion that tax revenue from cannabis sales could make up for the significant deficits running within the retirement program, while others argued that the legislation as drafted did not adequately address social equity. Another issue that arose concerned licensing, with lawmakers worried that small businesses on the island would be left out.
The governor’s revised marijuana legalization bill, which has been transmitted to the Senate for action, would ban home cultivation for recreational consumers, allow cultivation for medical cannabis patients, increase the number of members of the government’s Cannabis Advisory Board and limit non-residents to purchasing up to seven grams of flower per day while residents could buy up to an ounce.
There would be no tax on cannabis sales for medical patients, a 7.5 percent tax for residents and a 25 percent tax for non-residents.
In order to own a marijuana business, an individual must have been a resident of USVI for at least 10 years. For micro-cultivator business, the threshold is five years of residency.
A special “cannabis fund” would be established under the proposed legislation, with 20 percent of marijuana tax revenue being allocated to fund the Office of Cannabis Regulations, a cannabis testing program, job training, substance misuse treatment and grant programs for business incubation and micro-lending.
The bill also provides for automatic expungements for prior marijuana possession convictions, encourages research into the benefits of cannabis and recognizes the rights of individuals who wish to use or grow the plant for religious purposes.
The U.S. Department of Agriculture approved USVI’s hemp plan last month.
Photo courtesy of Philip Steffan.
Virginia Governor Says Marijuana Decriminalization Partly Addresses Racial Inequity Inspiring Mass Protests
The governor of Virginia said on Tuesday that the passage of marijuana decriminalization legislation this year represents an example of how his state has addressed racial inequities that are inspiring mass protests over recent police killings of black Americans.
In a speech, Gov. Ralph Northam (D) said that while he cannot personally attest to the pain that the black community is grappling with, there are steps lawmakers can take to reform policies that disproportionately harm minorities. That includes removing the threat of jail time for cannabis possession—an offense more likely to be enforced against black people despite comparable rates of use among white people.
“Through 400 years of American history—starting with the enslavement of Africans, through Jim Crow, massive resistance and now mass incarceration—black oppression has always existed in this country, just in different forms,” he said. “I cannot know how it feels to be an African American person right now or what you are going through. I cannot know the depth of your pain. But what I can do is stand with you and I can support you, and together we’re going to turn this pain into action.”
That action has meant “reforming criminal justice,” he said. “It meant decriminalizing marijuana.”
The governor, who faced severe scrutiny last year after he admitted he was in a yearbook photo showing people wearing blackface and dressed as KKK members, also cited expanding access to Medicaid and increasing the threshold for felony larceny as examples of ways the state has addressed racial inequality during his administration.
Northam signed a marijuana decriminalization bill last month and it goes into effect on July 1. Under the legislation, possessing up to one ounce of cannabis will be punishable by a $25 fine with no threat of jail time and no criminal record. Current Virginia law makes simple possession punishable by a maximum $500 fine, up to 30 days in jail and a criminal record.
Later in the Tuesday press conference, Shirley Ginwright, a member of the Virginia African American Advisory Board that Northam established, thanked him specifically for approving the cannabis decriminalization bill.
“So many of our students and our young black men and women were getting caught up in the criminal justice system because of marijuana, something that wasn’t killing them,” she said.
The governor isn’t alone in connecting the outrage over police killings of black Americans such as George Floyd and Breonna Taylor to cannabis prohibition enforcement. Sen. Cory Booker (D-NJ) also recently said racial disparities in marijuana criminalization is an example of a systemic injustice that underlies the frustration of minority communities.
Last week, 12 House members introduced a resolution condemning police brutality and specifically noting the racial injustices of the war on drugs.
The measure came one week after 44 members of the House sent a letter to the Justice Department, calling for an independent investigation into a fatal police shooting of Taylor in a botched drug raid.
Berner, a rapper who owns a marijuana dispensary that was looted in Los Angeles over the weekend, also seemed to echo Booker’s sentiment, stating that the damage to his shop to looting pales in comparison to the underlying racial injustices that prompted the protests.