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Federal Reserve Bank Presidents Call For Marijuana Banking Clarity

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Three Federal Reserve Bank presidents united in a call on Wednesday for clarity on rules for providing financial services to the marijuana industry.

During a panel at the American Bankers Association summit, the federal executives were asked about how financial institutions are expected to manage conflicting state and federal cannabis laws. All three stressed the need for a resolution to how the growing gap between state and federal marijuana laws has created difficulties for bankers and cannabis businesses alike.

“For better or for worse, we’re responsible to follow federal law, and so we would very much like to have clarification on this,” Tom Barkin, CEO of the Federal Reserve Bank of Richmond, said. “Whatever legislative answer gets us to clarity would be our preferred outcome.”

Esther George, who runs the Federal Reserve Bank of Kansas City, added that “the reality on the ground is there are businesses that are considered state-legal around this substance, and the money that is generated from that again, is a challenge for the banks.”

Choosing to service a marijuana business is “not an easy judgement for the banks to make,” she said. “They deem what’s the level of risk—how do I apprise for that, how do I manage that? I think that it is particularly challenging for them, so I look forward to that resolution that provides more clarity to the bankers.”

What advice would George offer financial institutions interested in accepting cannabis business accounts?

“Do your homework,” she said. “This is a case where you have to know your customer and you have to weigh the risk of what you’re worried about could happen around this.”

“We have to get reconciliation across federal and state law ultimately to make this work. In the meantime, you’re going to have some of these challenging situations.”

Raphael Bostic, CEO of the Federal Reserve Bank of Atlanta, put the situation into starker terms. Existing federal cannabis laws put banks “in an impossible situation because we don’t actually have a vote at either level but are asked to sort of navigate in this middle space,” he said.

“There’s not really a clear thing for us to say—we can’t give anyone 100 percent certainty in terms of how this is going to turn out,” he said. “I do hope that we get some legislative clarity sooner rather than later. I would love some resolution, one way or the other, as soon as we possibly can because this is only become more prominent.”

Watch video of the Federal Reserve Bank officials discussing marijuana, around 49:00 into the video below:

The branch presidents echoed what other top federal financial officials have said in recent months. Treasury Secretary Steven Mnuchin told senators that “this issue needs to be resolved one way or another because there are conflicts in so many regulations and rules and everything else” during a hearing last month.

Another Treasury official similarly told lawmakers that “this is really something I think that Congress needs to look at because nothing that we do can or does change what is prohibited under federal law.”

A resolution might be on the horizon after the House Financial Services Committee approved legislation that would shield banks that service cannabis businesses from being penalized by financial regulators. That bill is now awaiting scheduling for a full House floor vote.

U.S. Senators Push Federal Bank Regulators To Clarify Rules For Hemp Businesses

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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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Andrew Yang Wants To Legalize Psychedelic Mushrooms For Military Veterans

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Andrew Yang says he wants to legalize psilocybin mushrooms for military veterans to help them combat mental health conditions such as post-traumatic stress disorder (PTSD).

During a town hall event at an Iowa college on Thursday, the 2020 Democratic presidential candidate was asked whether he would take initiative and allow veterans to access medical marijuana if elected. Yang replied he “will be so excited to be that commander-in-chief” that he would not only end federal cannabis prohibition but would go one step further by legalizing the psychedelic fungus for veterans as well.

“We need to get marijuana off of the Controlled Substances Act and legalize it at the federal level, make it freely available,” he said. “I say this because I’ve talked to hundreds of veterans and other Americans who benefit from marijuana as a pain relief treatment, and it’s much less deadly than the opiates that many, many people are using for the same conditions.”

“I’ve talked to veterans who’ve also benefited from psilocybin mushrooms,” he added. “They said it was the only thing that actually has helped combat their PTSD. I’m for legalizing psilocybin mushrooms for veterans as well. Pretty much if it’s going to help a veteran, we should make it easier, not harder, for them to get access to it.”

Yang’s drug policy reform platform is unique in that respect. While the majority of Democratic candidates support marijuana legalization, he’s pushed unique proposals such as decriminalizing possession of opioids and making psilocybin mushrooms “more freely available” for therapeutic purposes. The candidate also wants to invest federal funds in safe injection facilities where individuals can use prohibited drugs in a medically supervised environment and receive help getting into treatment.

He hasn’t gone so far as embracing the decriminalization of all drugs, as former South Bend, Indiana Mayor Pete Buttigieg has, however.

That said, Yang did signal that he’s open to legalizing and regulating “certain drugs” beyond cannabis, which he argued would disrupt international drug cartels. Rep. Tulsi Gabbard (D-HI) recently said she backs “legalizing and regulating” currently illegal controlled substances to protect public safety and combat the illicit market.

At the Iowa town hall, Yang went on to say that he’s particularly interested in legalizing marijuana, and he again pledged to “pardon everyone who’s in jail for a non-violent marijuana-related offense because they shouldn’t be in jail for something that’s frankly legal in other parts of the country.”

“And I would pardon them all on April 20, 2021, high-five them on the way out of jail and be like, ‘things got a lot better in the last year,'” he said, referencing the unofficial cannabis holiday 4/20.

Tom Steyer Calls For Marijuana Legalization And Opioid Decriminalization

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Tom Steyer Calls For Marijuana Legalization And Opioid Decriminalization

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Billionaire philanthropist Tom Steyer is calling for the legalization of marijuana and decriminalization of opioid possession.

In a criminal justice reform plan released on Thursday, the 2020 Democratic presidential candidate laid out a vision for ending the drug war, which he said has contributed to mass incarceration and is enforced in a racially disproportionate manner.

“Tom believes we must end the failed War on Drugs. Based on the flawed idea that incarceration is the answer to addiction, federal and state elected officials passed severe sentencing laws that encouraged incarceration for low-level drug offenses,” the plan states. “Unfortunately, communities of color were and continue to be disproportionately affected and targeted by these laws, even when other ethnicities were committing the same drug crimes at the same rates.”

There are six proposals in the drug war section, including legalizing cannabis and expunging prior marijuana convictions, ending mandatory minimum sentences and empowering judges to use more discretion in non-violent drug cases, diverting people convicted of drug offenses to treatment or drug court, ending the sentencing disparity between crack and powder cocaine, sealing the records of certain drug convictions and decriminalizing opioids while investing $75 billion in treatment programs and holding pharmaceutical companies accountable.

Steyer specifically endorsed House Judiciary Committee Chairman Jerrold Nadler’s (D-NY) Marijuana Opportunity Reinvestment and Expungement (MORE) Act, which would deschedule cannabis, expunge prior convictions and set aside tax revenue to support communities most impacted by the drug war.

“Policing marijuana use has led to too many unfair incarcerations and predominantly impacted communities of color,” the plan says. It also criticizes then-Attorney General Jeff Sessions’s 2018 move on “repealing leniency given to states for marijuana laws.”

“A Steyer Administration will also open equitable pathways to banking for marijuana businesses,” it continues. “The federal government—including the Federal Deposit Insurance Corporation—should not be a barrier to marijuana businesses receiving support from their local banks.”

“Incarceration is not the answer to addiction, and low-level drug offenses should not carry a severe sentence. Tom will legalize marijuana, let states pass their own policies, expunge past records, and direct the federal government to open banking services to the marijuana industry. Tom’s administration will end the disparity between crack and cocaine sentences, decriminalize opioid possession, and invest $75 billion to address the opioid crisis.”

The opioid decriminalization proposal is similar to that of entrepreneur Andrew Yang, another 2020 candidate who said removing criminal penalties for possessing the substance is necessary in order to help get people into treatment and curb the opioid crisis. Former South Bend, Indiana Mayor Pete Buttigieg and Rep. Tulsi Gabbard (D-HI) have gone further, calling for the decriminalization of all drug possession and, in Gabbard’s case, also the legalization and regulation of illicit drugs.

“Tom supports decriminalizing small amounts of opioid possession for personal use at the federal level,” the plan states. “He will address the opioid crisis through $75 billion in new funding over ten years to resource state and local treatment programs, hold big pharmaceutical corporations and their executives accountable, and strongly enforce laws that end the illicit distribution and sale of opioids.”

This is a notable development for Steyer, who hasn’t discussed drug policy reform as much as many other candidates in the race and whose views on decriminalization of substances beyond marijuana were previously unknown.

Last year, Steyer said he supported creating a national referendum process so that Americans can made decisions about a wide range of policy issues, including cannabis legalization.

He also previously discussed his support for ending marijuana prohibition and providing the industry with access to banking, saying that he and his wife wanted to provide financial services to minority- and women-owned cannabis firms through their community bank, but federal prohibition means the business would be put at risk if they did that.

Steyer’s new plan also calls for juvenile justice reform, ending cash bail, banning facial recognition technology in policing, demilitarizing law enforcement, improving prison conditions and eliminating the death penalty, among other reforms.

Wisconsin Governor Blasts Lawmakers For Not Legalizing Medical Marijuana Despite Public Support

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Austin City Council Approves Measure To End Most Marijuana Arrests

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The decision to back away from pursuing criminal charges against people with small amounts of pot comes after state lawmakers last year legalized hemp in a way that threw marijuana prosecution into chaos.

By , The Texas Tribune

The Austin City Council approved a resolution Thursday that will largely end arrests and fines for low-level marijuana possession. This comes after Texas’ legalization of hemp last June threw marijuana prosecution into chaos since the plants look and smell identical.

The resolution directing Austin police not to spend city resources on newly necessary lab tests to distinguish marijuana from now-legal hemp passed unanimously with nine votes. Council member Jimmy Flannigan and Mayor Steve Adler were absent. Debate on the measure lasted just under an hour and a half. Of about 20 people who spoke on the resolution, only Austin Police Association President Ken Casaday was against it.

The council’s resolution states that it stems directly from Texas’ new law legalizing hemp. Last summer, following a federal hemp bill, state lawmakers approved a measure to create an agricultural industry for the crop in Texas. But the law also complicated marijuana prosecutions by narrowing the legal definition of the drug from cannabis to cannabis that contains more than 0.3% THC, the psychoactive ingredient in the plant.

All of a sudden, some district attorneys were dropping hundreds of low-level pot possession cases and not accepting new ones, arguing they couldn’t tell without lab testing if something was marijuana anymore. New misdemeanor marijuana cases filed by Texas prosecutors have dropped by more than half. And numerous Texas prosecutors, including those in Austin’s Travis County, require police to submit lab reports on a substance’s THC concentration before they will pursue misdemeanor marijuana charges. They argue circumstantial evidence like smell can no longer be used to authoritatively say something is marijuana.

Part of what prompted the Austin resolution — which prohibits spending city funds on such testing except in felony cases — is that public state labs are still working on establishing a way to test for that THC concentration. Right now they can only tell if something is cannabis. For some counties and cities, that has meant putting more money into shipping seized cannabis to private labs that can tell if it’s hemp or marijuana.

Even in places where police don’t have or aren’t spending funds on such testing and new cases aren’t being accepted by prosecutors, people are still being cited or arrested. They are sometimes taken to jail but then released with no charges being pursued. Austin police said this month that they still arrest or cite people who are suspected of possessing marijuana.

This resolution changes that, directing the city to get as close as possible to eliminating enforcement action for low-level cannabis possession.

The measure prohibits spending city funds on testing in low-level possession cases, and it directs police not to arrest or cite people in such cases — unless there is a safety concern — if they know the district attorney will automatically reject the charges or testing won’t be approved. It clarifies that lab testing can be used for suspected felonies or when the cannabis is not for personal use, like trafficking cases. A revised version also specifies that the measure will not affect toxicology testing.

This article originally appeared in The Texas Tribune.

The Texas Tribune is a nonprofit, nonpartisan media organization that informs Texans — and engages with them — about public policy, politics, government and statewide issues.

Texas Marijuana Prosecutions Have Dropped By More Than Half Following Hemp’s Legalization

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