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Federal Reserve Bank Examines Marijuana Industry’s Growth

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The Federal Reserve Bank Of Kansas City recently issued a report looking at Colorado’s marijuana market, ultimately concluding that the cannabis industry is primed to continue to grow as public support for legalization increases, although perhaps not quite at the rate seen in the early years of the policy change’s implementation.

The central bank district had analysts examine various aspects of Colorado’s legal system over the past six years, including employment rates, taxes, business licenses and sales data. In their report, the authors identify “signs of maturation” as the market has stabilized over time.

Overall, the analysis—published in the reserve’s Rocky Mountain Economist late last month—observes that while the industry boomed in the initial years after the state legalized marijuana for adult use, there’s been a leveling off when it comes to sales, licenses and jobs in the state’s cannabis market.

Via Kansas City Fed.

Tax revenue has continued to rise, helping to fund public service programs and the state’s general fund, but the Fed report’s authors write that experts don’t anticipate the rate of that growth can be sustained in the long-term if sales continue to steady.

Via Kansas City Fed.

The federal bank also explored the “potential costs of marijuana legalization,” determining that after an initial spike, rates of youth consumption have “recently dropped below pre-legalization levels.” Cannabis-related crimes have also dropped off “due largely to a significant drop in marijuana possession offenses,” the report states. However, it finds that “there still are signs” of the illicit market operating in the state.

“It is important to continue to highlight that Colorado’s legalization of marijuana, as well as that of other states as mentioned earlier in this article, conflicts with federal law,” the authors write. “This continues to create challenges for marijuana businesses, including access to the payment and banking systems.”

That point about banking complications is especially relevant. While members of Congress may have diverging views on cannabis reform in general, there’s a growing, bipartisan consensus that the lack of access to financial services for state-legal marijuana businesses creates an untenable situation.

The head of the Kansas City Federal Reserve Bank discussed the issue during an American Bankers Association summit last year, stating that the country must “get reconciliation across federal and state law ultimately to make this work” and “in the meantime, you’re going to have some of these challenging situations.”

A bipartisan bill to achieve that reconciliation was approved by a wide margin in the House in September. However, while the chair of the Senate Banking Committee has expressed interest in taking the legislation up in his chamber, he recently proposed changes that advocates view as unworkable, such as making financial services available only to marijuana businesses that sell cannabis products with a maximum THC concentration of two percent.

In the new report’s conclusion, the authors write that while “Colorado’s marijuana industry continues to expand, economic indicators in this sector are showing early signs of nearing a longer-term equilibrium.”

“Though there still is room for growth, demonstrated by a spike in recreational marijuana sales during the summer months of 2019, the industry is unlikely to see rapid expansion in employment and business formation comparable to the growth during the first few years after legalization,” the report states. “That said, there are factors that may influence the pace of industry growth in Colorado, such as changes in marijuana legislation at the state and federal levels.”

“While it is unclear if marijuana ever will be legalized at the federal level, a 2019 survey released by Pew Research Center showed that an estimated two-thirds of adults in the United States support the legalization of marijuana, up from just one-third of adults at the turn of the century,” it continues. “This change in public perception represents a growing acceptance of the industry despite its potential costs.”

Federal Marijuana Reform Will Get Another Congressional Hearing Next Week

Photo courtesy of Mike Latimer.

Marijuana Moment is made possible with support from readers. If you rely on our cannabis advocacy journalism to stay informed, please consider a monthly Patreon pledge.

Kyle Jaeger is Marijuana Moment's Los Angeles-based associate editor. His work has also appeared in High Times, VICE and attn.

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Top Trump Campaign Spokesman: Marijuana Must Be ‘Kept Illegal’

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Asked in a new interview about President Trump’s position on changing federal marijuana laws, a top reelection campaign aide said the administration’s policy is that cannabis and other currently illegal drugs should remain illegal.

“I think what the president is looking at is looking at this from a standpoint of a parent of a young person to make sure that we keep our kids away from drugs,” Marc Lotter, director of strategic communications for the Trump 2020 effort, said in an interview with Las Vegas CBS affiliate KLAS-TV.

Please visit Forbes to read the rest of this piece.

(Marijuana Moment’s editor provides some content to Forbes via a temporary exclusive publishing license arrangement.)

Photo courtesy of Gage Skidmore.

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Virginia Marijuana Decriminalization Gets Closer To Governor’s Desk With New Amendments

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One week after bills to decriminalize marijuana in Virginia were passed by both the House and Senate, they advanced again on Wednesday in committee votes, where they were revised in an effort to ease the path to the governor’s desk.

The goal was to make the language of the bills identical, with lawmakers hoping to streamline the process by avoiding sending differing pieces of decriminalization legislation to a bicameral conference committee to resolve differences.

The House of Delegates and Senate were under pressure to approve their respective versions of decriminalization ahead of a crossover deadline last week. After clearing floor votes in their respective chambers, the Senate-passed bill was sent to the House Court of Justice Committee, while the House’s legislation was referred to the Senate Judiciary Committee.

Those panels amended the bills and advanced them on Wednesday, with senators voting 10-4 to advance the revised legislation and delegates voting 8-5. However, the Senate panel also struck a part of the text of a compromise substitute version concerning a record clearing provision while the House committee accepted the substitute as offered.

That means it will be up to the Finance Committees to resolve the remaining differences if lawmakers hope to skip the conference step prior to full floor votes in both chambers.

Regardless of the unexpected complication, advocates said the new committee actions represent a positive development.

“Fortunately, the patrons were able to reach a consensus and move the bills forward,” Jenn Michelle Pedini, executive director of Virginia NORML, told Marijuana Moment. “Virginians have waited long enough for this important step, one that will dramatically reduce both marijuana arrests and the collateral consequences that follow such charges.”

The legislation as amended would make possession of up to one ounce a civil penalty punishable by a $25 fine without the threat of jail time. Currently, simple possession is punishable by a maximum $500 fine and up to 30 days in jail.

A provision that would have allowed courts to sentence individuals to up to five hours of community service in lieu of the civil penalty was removed with the latest revisions. The bill also stipulates that juveniles found in possession of cannabis will be treated as delinquent, rather than go through a less punitive process for a “child in need of service.”

Language providing a means to seal prior records for marijuana convictions was successfully reinserted into the House Courts of Justice Committee-passed bill after it was previously removed and placed in a separate expungement bill. That latter legislation is stalled, so lawmakers put it back into the decriminalization measure via the substitute to ensure its enactment.

The Senate Judiciary moved to delete that section, however, creating complications for avoiding a conference committee.

Meanwhile, the House Rules Committee voted in favor of a separate Senate-passed resolution on Wednesday that calls for the establishment of a joint commission to “study and make recommendations for how Virginia should go about legalizing and regulating the growth, sale, and possession of marijuana by July 1, 2022, and address the impacts of marijuana prohibition.” That vote was 12-5.

That’s a significant step, as the legislature is generally reluctant to enact bold reform without first conducting a study on the issue.

While Gov. Ralph Northam (D) is in favor of decriminalization, including a call for the policy change in his State of the Commonwealth address last month, he’s yet to embrace adult-use legalization. That said, Attorney General Mark Herring (D), who is running to replace the term-limited governor in 2021, said he’s optimistic that Northam will come around on the issue.

Herring organized a cannabis summit late last year to hear from officials representing states that have already legalized marijuana. That’s one tool he said the governor could use as he considers broader reform.

For now, Virginia seems to be on the path to become the 27th state to decriminalize marijuana, and the first to do so in 2020. Last year, three states—New MexicoHawaii and North Dakota—also approved the policy change.

Alabama Lawmakers Approve Medical Marijuana Legalization Bill

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Alabama Lawmakers Approve Medical Marijuana Legalization Bill

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An Alabama Senate committee approved a bill on Wednesday that would legalize medical marijuana in the state.

The legislation would allow patients with qualifying conditions to purchase cannabis products from licensed dispensaries. It would be a limited system, however, prohibiting patients from smoking or vaping marijuana.

The Senate Judiciary Committee cleared the bill in a 8-1 vote, with one abstention. The next stop for the legislation will be the Senate floor.

The proposal would establish the Alabama Medical Cannabis Commission, which would be responsible for overseeing a patient registry database, issuing medical cannabis cards and approving licenses for marijuana dispensaries, cultivators, transporters and testing facilities.

This vote comes two months after a panel created by the legislature, the Medical Cannabis Study Commission, issued a recommendation that Alabama implement a medical cannabis program.

The full Senate approved a medical cannabis legalization bill last year, but it was diluted in the House to only provide for the establishment of the study commission. Sen. Tim Melson (R) sponsored both versions of the legislation and served as chairman of the review panel.

The current bill has been revised from the earlier version. For example, this one does not require patients to exhaust traditional treatment options before they can access medical cannabis.

The committee also approved a series of amendments by voice vote, including several technical changes to the bill. Another one would shield physicians from liability for recommending medical cannabis. One would clarify that employees are ineligible for workers’ compensation for accidents caused by being intoxicated by medical cannabis, which is the same standard as other drugs.

Watch the Alabama Senate Judiciary Committee debate and vote on medical cannabis below:

Members also agreed to an amendment creating a restriction on who can be on the cannabis commission.

While it’s not clear how the House would approach the bill if it advances to the chamber this year, the speaker said this week that he’s “in a wait and see mode” and commended Melson for his work on the measure. The state’s attorney general, meanwhile, sent a letter to lawmakers expressing opposition to the reform move.

Under the measure, patients suffering from 15 conditions would qualify for the program. Those include anxiety, cancer, epilepsy and post-traumatic stress disorder. Patients would be able to purchase up to a 70-day supply at a time, and there would be a cap of 32 dispensaries allowed in the state.

Prior to the vote, committee heard from a series of proponents and opponents, including parents who shared anecdotes about the therapeutic benefits of cannabis for their children. Interest in the reform move was so strong that an overflow crowd has to be moved to a separate hearing room.

“Sometimes people are not able to empathize with others who have gone through something. I guarantee you if one of relatives, members of the legislature, went through something like the testimonies that we’ve heard today, they would want it,” Sen. Vivian Figures (D) said. “But they would probably have the means to fly somewhere and get it.”

There would be a number of restrictions under the bill when it comes to advertising. It would also require seed-to-sale tracking for marijuana products, set packaging and labeling requirements and impose criminal background checks for licensed facility employees.

A nine percent tax would be levied on “gross proceeds of the sales of medical cannabis” sold at a retail medical cannabis dispensary. Part of those funds would go toward creating a new Consortium for Medical Cannabis Research, which would provide grants to study the plant.

Last year, the Senate Judiciary Committee also approved a bill to decriminalize marijuana.

Kentucky Lawmakers Approve Medical Marijuana Bill In Committee Vote

Photo courtesy of Philip Steffan.

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