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Federal Small Business Administration Pressed On Supporting Marijuana Industry

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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.

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.

GOP Congressman Exposes Flaws In VA Marijuana Research Projects

Photo courtesy of Brian Shamblen.

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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Montana Marijuana Opponents File New Lawsuit To Overturn Legalization Vote

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Montana voters overwhelmingly approved a pair of marijuana legalization ballot measures on Tuesday—but opponents are now attempting to invalidate the will of residents, filing a new lawsuit that argues the main reform measure that passed is unconstitutional.

The plaintiffs argue that the voter-approved statutory proposal unlawfully appropriates funds, violating a portion of the state Constitution that prohibits such activity from being included in a citizen initiative. The state Supreme Court declined to take the case last month, but it did not rule on the merits. Instead, it said the filers failed to establish the urgency needed to skip the lower court adjudication process.

They left the door open to pursuing the case in district and appeals court, however, and the plaintiffs went through with the option, as they previously told Marijuana Moment they would.

The legalization measure will establish a cannabis market for adult consumers, the suit states, “with resulting revenues to be earmarked and credited to specified programs and agencies for specified uses.”

Because it contains those provisions, the proposal “is an appropriation of money by initiative in violation of state statute,” the suit, filed on Wednesday, states. Attorneys representing the plaintiffs asked the court to deem the initiative “unconstitutional,” “void in its entirety” and “unenforceable.”

Under the proposal, half of the public revenue generated from marijuana sales will go toward environmental conservation programs—a provision that earned the campaign key endorsements in September. The measure will also send funds toward veteran services, drug treatment, health care and local governments, with the rest flowing to the general fund.

Last month, a state lawmaker announced plans to request that a bill be introduced to repeal the legalization measure, but he set aside those plans this week following the strong vote in favor of the policy change. As of Friday afternoon’s vote tallying, the initiative is ahead by a 57-43 percent margin.

“The only branch of government in this state dumb enough to overturn citizens’ initiative is the [state] Supreme Court, which has done it repeatedly,” the lawmaker, Rep. Derek Skees (R), said on Wednesday.

Montana was one of five states that legalized marijuana in some form this week, along with Arizona, New Jersey, Mississippi and South Dakota.

Nationwide, voters passed every single major cannabis and drug policy ballot measure across the country this election, including decriminalization of psychedelic plants and fungi in Washington, DC and decriminalization of all drugs in Oregon, as well as a separate measure in that state to legalize psilocybin therapy.

Beyond the statutory measure to establish a legal cannabis market, Montanans also passed a constitutional amendment stipulating that only adults 21 and older can participate in the program. That initiative was not challenged in the opponents’ lawsuit.

Read the latest legal challenge against the Montana marijuana legalization initiative below:

Montana Marijuana Lawsuit by Marijuana Moment

Connecticut Governor Says Legalizing Marijuana Would Prevent COVID Spread By Reducing Travel To New Jersey

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Connecticut Governor Says Legalizing Marijuana Would Prevent COVID Spread By Reducing Travel To New Jersey

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The governor of Connecticut says that legalizing marijuana in his state will bolster public health amid the coronavirus pandemic by preventing cannabis tourism to surrounding states as they pursue and enact the policy change.

In an interview with Yahoo Finance on Thursday, Gov. Ned Lamont (D) said that officials have “got to think regionally when it comes to how we deal with the pandemic—and I think we have to think regionally when it comes to marijuana as well.”

“Right now I’m surrounded by states—you mentioned New Jersey, Massachusetts—where marijuana is already legal, and I don’t need a lot of people driving back and forth across the border,” he said. “We’re trying to keep people close to home as best we can right now, and I think legalizing marijuana and doing that safely, making sure that no poison is laced in there, I think it’s one way to keep people closer to home.”

New Jersey voters approved a referendum to legalize cannabis during Tuesday’s election, but it should be noted that marijuana possession, use and sales remain prohibited there until lawmakers approve enabling legislation for the program. Gov. Phil Murphy (D) announced on Friday the appointment of two top regulators for the cannabis system.

Asked by Yahoo whether he felt legalization could “boost” the state’s revenue amid the health crisis, Lamont didn’t directly respond, but he recognized bipartisan support for the reform move, as evidenced by the passage of legalization in traditionally red states on Election Day.

Beyond New Jersey, “even South Dakota voted to legalize marijuana,” the governor said, “as well as 15 other states where it’s legal right now. There’s a fair amount of history there.” (A combined 15 states, plus Washington, D.C., have legalized marijuana for adult use, though implementation is still pending in those states that voted in favor of the reform on Tuesday.)

Lamont said in a separate appearance on Thursday that the passage of cannabis legalization in New Jersey—in addition to ongoing marijuana reform efforts throughout the Northeast—underscores the need for his state to enact the policy change in a regionally coordinated manner.

Democrats increased their majority in Connecticut’s state legislature in this week’s elections, boosting the chances that legalization can get done in 2021. The governor said legalization and other policy issues are “on the table” and that the reform could bring in needed tax revenue.

He also discussed the regional implications of cannabis reform efforts is surrounding states. Taking a lesson from coordinated public safety safety policies between states amid the COVID-19 outbreak, Lamont said “my thinking is sort of similar when it comes to marijuana.”

“If we do something, we do it on a regional basis,” he said. “New Jersey has done this, Massachusetts is already legal, Rhode Island is looking at it, New York is looking at it—so I’ll be talking with my fellow governors about what, if anything, we want to do on a regional basis and then talking with the legislature as well.”

Prior to the pandemic, Lamont and the governors of New Jersey, New York and Pennsylvania met to discuss how best to implement cannabis legalization to promote public safety. Last year, they agreed to a set of principles for regulated marijuana markets.

New Jersey Governor Appoints Top Marijuana Regulator Following Legalization Vote

Photo courtesy of Kimberly Lawson.

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Minnesota Marijuana Parties May Have Helped Republicans Win Key Races, Hurting Legalization’s Chances

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Paradoxically, the two cannabis parties’ success may wind up hurting the cause of legal marijuana. By siphoning votes from the DFL and helping Republicans, legal marijuana is less likely to pass, as the Senate GOP killed a legalization bill in committee in 2019.

By Max Nesterak, Minnesota Reformer

Marijuana legalization candidates may have played a decisive role in key races in Minnesota, potentially propelling U.S. Rep. Jim Hagedorn to reelection and helping Republicans maintain control of the state Senate.

Although the Democratic-Farmer-Labor Party may end up eking out victories once more absentee ballots are counted, party officials insist the state’s two marijuana parties acted as a drag on their effort to gain control of the Legislature in one of the most pivotal elections in recent memory.

Paradoxically, the two cannabis parties’ success may wind up hurting the cause of legal marijuana. By siphoning votes from the DFL and helping Republicans, legal marijuana is less likely to pass, as the Senate GOP killed a legalization bill in committee in 2019.

The issue performed well across the country in Tuesday’s election, with four more states passing referendums legalizing marijuana—New Jersey, Arizona, Montana and South Dakota—bringing the total to 15.

The pot parties’ strong performance in Minnesota, however, had the opposite effect, helping ensure the defeat of the legalization movement in the state for at least another election cycle. Unlike other states, ballot initiatives in Minnesota must be approved by the Legislature. The GOP-controlled Senate has staunchly opposed such an effort.

The head of the Legal Marijuana Now Party Tim Davis knows this.

“Republicans are the biggest problem in Minnesota,” Davis said. “The Republicans are the only thing that has stopped it. And they will stop it again.”

The DFL needed to flip two state senate seats and they would have taken control and been able to introduce legislation to legalize marijuana.

A marijuana candidate seems to have affected at least one state senate race, with Gene Dornink edging out Sen. Dan Sparks, DFL-Austin, by just over 1,500 votes. Legal Marijuana Now candidate Tyler Becvar won over 2,500 votes. Becvar posted a video for his putative opponent Dornink on his Facebook page in May, according to a screenshot obtained by the Reformer. His Facebook page was also filled with support for President Donald Trump and attacks on Democrats.

Aric Putnam, the DFL challenger to Sen. Jerry Relph, R-St. Cloud, looks to have won his race despite the marijuana candidate pulling down over 3,000 votes. Putnam is currently ahead by less than 300 votes, but that gap is likely to widen as more absentee ballots are counted.

Putnam says he supports legalizing marijuana. Activists with NORML, a marijuana legalization group, held an event in Putnam’s district to register voters and tell them not to vote for Legal Marijuana Candidate Jaden Partlow.

“They were just as disturbed as I was to see an issue they care about weaponized for partisan gain,” Putnam said.

Relph was unavailable for comment.

The Legal Marijuana Now candidate scored above 5% in the U.S. Senate race, which is one the thresholds for securing major party status for another two general elections, which would mean getting on the ballot without onerous signature gathering. Both pot parties will have major party status in 2022.

In the 1st Congressional District, cannabis candidate Bill Rood won 21,000 votes, well above the margin of victory for U.S. Rep. Jim Hagedorn over Dan Feehan.

While Democrats decry them as spoilers, Davis, the Legal Marijana Now Party chair, balks at the suggestion that the marijuana parties shouldn’t run candidates even if it would help their cause. He said Democrats are “sore losers” and expressed his devotion to third party politics even if it backfires.

“Most of the people in America accept the duopoly. They accept the (expletive) they’re living in as the best pile of (expletive) they can get,” Davis said. “And when somebody tries to change it, they think somebody’s thrown a wrench into the sprocket of what’s working 
 the system’s not working.”

Where Davis saw a place to take a stand against the system, Republicans saw an opening.

As the Reformer reported in June, several marijuana party candidates across the state have ties to the GOP.

Robyn Smith admitted she was recruited by a Republican to run for state senate against Sen. Justin Eichorn, R-Grand Rapids, and DFL challenger Rita Albrecht. Smith won 6% of the vote, but that race turned out to be far less competitive than expected with Eichorn winning reelection by a healthy margin.

Weeks won nearly 6% of the vote—more than the margin between Craig and Republican opponent Tyler Kistner—despite his death a month and a half earlier, which embroiled the race in a flurry of lawsuits. Since both marijuana parties earned major party status in 2018, Weeks’ death triggered a special election, which was then overturned by a federal judge.

In a voicemail leaked to the Star Tribune, Weeks is heard telling a friend he was recruited by Republicans to siphon votes away from Craig in her tough reelection bid against Kistner. Craig won her seat in 2018 from Jason Lewis after losing to him in 2016.

“They want me to run as a third-party, liberal candidate, which I’m down. I can play the liberal, you know that,” Weeks said in the message.

That people would take advantage of the legalization movement’s popularity was a foreseeable yet unavoidable outcome of the marijuana parties’ electoral successes, driven by the popular desire to legalize marijuana.

“We always said, ‘What if we get to be a major party status—then this is something we have to worry about,” said Marty Super, outgoing chair of Legal Marijuana Now Party, in an interview with the Reformer earlier this year.

Minnesota DFL Chair Ken Martin said he doesn’t blame the marijuana parties for not having the power to screen out interlopers and instead blasted Republicans for what he called a highly unethical and potentially illegal strategy.

“If you can’t win fair and square on the merits of your own ideas and the strength of your own candidates then you don’t deserve the majority.” Martin said.

Davis, the current Legal Marijuana Now Party chair, says the DFL are responsible for their own losses.

“The Democrats do not have faith in their candidates enough to beat a Republican if we are involved. But that is their problem, not ours,” Davis said.

Martin said there’s more to the DFL’s disappointing night than just the marijuana parties, but he called Davis’ response a “bull(expletive) answer.”

This story was first published by The Minnesota Reformer.

Every Single Marijuana And Drug Policy Ballot Measure Passing On Election Day Bolsters Federal Reform Push

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