A top official with the U.S. Treasury Department says the Trump administration is currently reviewing whether to keep or rescind Obama-era guidance that provides a process for banks to serve the marijuana industry without running afoul of federal regulators.
“We are reviewing the guidance in light of the attorney general’s recent decision to revoke a Justice Department memorandum on this issue,” Sigal Mandelker, the department’s deputy secretary, said at a Senate hearing on Wednesday.
However, she added that the Treasury guidance “remains in place,” at least for now. “We’re taking a look at it in light of the Justice Department’s announcement.”
Earlier this month, U.S. Attorney General Sessions rescinded a 2013 memo that has generally allowed states to implement their own cannabis laws without federal interference.
Mandelker was responding to questions from Sen. Bob Menendez (D-NJ) about a separate guidance memo issued by the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) in 2014 that laid out a process for how banks can open accounts for marijuana businesses and avoid triggering federal enforcement actions.
Medical marijuana dispensaries help many chronically ill NJans, including veterans, and provide a non-opioid alternative for those who badly need it. That's why I pressed Trump Admin. officials to keep in place guidance for banks who want to serve marijuana-related businesses. pic.twitter.com/notbqpFvSD
— Senator Bob Menendez (@SenatorMenendez) January 18, 2018
The policy, which requires financial institutions to regularly file reports on their cannabis customers, was intended to provide clarity and assurances to banks, but many have remained reluctant to work with marijuana businesses because of overarching federal prohibition laws.
Nonetheless, documents released by FinCEN last month showed that the number of banks willing to work with the marijuana industry has steadily grown over time, though those figures were collected prior to Sessions’s move to revoke the previous Justice Department guidance.
Reuters reported last week that FinCEN was not consulted in advance about Sessions’s decision.
On Wednesday, a bipartisan group of 31 House members sent a letter asking the agency not to rescind the cannabis banking guidance.
“FinCEN’s stated priorities have allowed such businesses to conduct commerce more safely through financial institutions which reduces the use of all cash, improves public safety, and reduces fraud,” the lawmakers wrote. “Leaving your guidance unchanged will continue to encourage small companies to make investments by freeing up access to capital. It will also further provide for well regulation and oversight through suspicious activity reports. Rescinding this guidance would inject uncertainty in the financial markets.”
A bipartisan group of 15 senators followed up with their own letter on Thursday.
.@SenJeffMerkley & I led a bipartisan effort, urging Financial Crimes Enforcement Network to keep guidelines in place enabling financial institutions to provide banking services for legitimate cannabis businesses in states that have legalized marijuana. https://t.co/N49vKZZ8f3
— Sen. Lisa Murkowski (@lisamurkowski) January 18, 2018
“Attempts to disrupt this market are dangerous and imprudent,” they wrote. “We see the removal of protections on financial institutions, which are operating in accordance with state laws, as a poor alternative to creating meaningful policy through the political process.”
In a separate letter, Menendez and Sen. Cory Booker, a fellow New Jersey Democrat, wrote that “without access to the banking sector, [marijuana] businesses will face serious challenges paying their employees, conducting transactions with vendors, and meeting state tax obligations.”
A growing bipartisan group of members of Congress has sought a legislative solution to the cannabis businesses’ banking access problems. House and Senate bills to provide permanent clarity to the banking industry about working with marijuana businesses have earned increasing cosponsor numbers, but haven’t been scheduled for hearings or votes.
In 2014, the House voted 231 to 192 in favor of an amendment to prevent federal authorities from punishing banks for servicing the legal marijuana industry. But the language was not included in the final version of annual appropriations legislation that year and was not enacted into law. Congressional Republican leaders have since prevented similar measures from even being considered for attachment to subsequent spending bills.
In November, the chair of the House Financial Services Committee used a procedural ruling to block a vote on a cannabis banking amendment offered to a bill on stress testing for financial institutions.
New York And Connecticut Governors Talk Marijuana Legalization On Fishing Trip
The governors of New York and Connecticut went fishing and talked about marijuana legalization on Tuesday.
The conversation comes after lawmakers in both states were unable to pass legalization legislation before their respective sessions’ ends this year, despite having the support of New York Gov. Andrew Cuomo (D) and Connecticut Gov. Ned Lamont (D).
“We talked about policy issues like the marijuana issue, which is obviously also relevant to contiguous states,” Cuomo said at a press conference following the fishing trip. “What Connecticut does on marijuana is relevant to New York, what New York does is relevant to Connecticut so we talked about that and a lot of issues. So we had fun.”
Watch Cuomo’s marijuana comments at about 5:00 into the video below:
Cuomo had described legalization as a top legislative priority for 2019 and included it in his state budget proposal. But after months of negotiations with lawmakers, the plan fell through, due in part to disagreements about how to allocate tax revenue and whether to allow individual jurisdictions to opt out of allowing cannabis businesses.
The governor did sign legislation in July that expands the state’s marijuana decriminalization policy and provides a pathway for expungements of past marijuana convictions.
Over in Connecticut, Lamont campaigned on legalization during his election bid last year and described it as one of his administration’s “priorities” after he took office. But as with neighboring New York, the legislature failed to advance a legalization bill beside multiple successful committee votes and hearings throughout the year.
The specifics of what the governors talked about during their fishing expedition on Lake Ontario aren’t clear, but both are presumably gearing up for another round of legislative efforts marijuana over the coming year and could take lessons from each other as reform talks continue.
Another East Coast state, New Jersey, has also struggled to move legalization legislation forward, with lawmakers saying that the issue should be taken up by voters in 2020 rather than pushed through the legislature, though there has been discussion lately about another try at moving a bill before year’s end. Gov. Phil Murphy (D) did sign a decriminalization and expungements bill in May, however.
Photo courtesy of CBS 6.
GOP Congressman Will Meet Attorney General To Discuss Expanding Marijuana Research
Rep. Matt Gaetz (R-FL) said on Monday that he will soon be speaking with the U.S. attorney general about expanding marijuana research.
The congressman, a close ally of President Trump, is a vocal proponent of medical cannabis and has argued that the federal drug scheduling system is hampering research into the plant’s therapeutic potential.
“I will be meeting with Attorney General Bill Barr in the coming weeks to discuss the Department of Justice’s approach to unlocking more research grants so that we can have American innovation applied to our health care in a way that can get people off of some of these devastating opioids and painkillers, and on to a more natural product,” he said following a radio town hall event.
Even under the framework of prohibition, the Justice Department is able to promote research by, for example, approving additional marijuana manufacturers—something the Drug Enforcement Administration (DEA) said it would do three years ago.
Barr has voiced support for expanding the number of federally authorized cannabis manufacturers.
“I think we’re going to move forward on it,” the attorney general said in April. “I think it’s very important to get those additional suppliers.”
Earlier this year, Gaetz joined congressional colleagues in leading a letter addressed to Barr and the head of DEA expressing frustration that the Justice Department has declined to take action despite its pledges. The lawmakers implored DEA to “do whatever you can to speed up and improve the research application process.”
Gaetz also introduced legislation that would force DEA to approve additional facilities to produce research-grade cannabis. A version filed last year cleared the Judiciary Committee in a voice vote, and he reintroduced the bill in January but it has not yet been acted upon.
Listen to Gaetz’s new cannabis comments, about 1:20 into the audio below:
DEA is facing two lawsuits regarding its approach to marijuana, including one that concerns the lack of diversity of research-grade cannabis since only one manufacture is currently authorized. The agency was ordered to respond to the suit by August 28.
Separately, a group of patients and advocates sued DEA over marijuana’s Schedule I status under the Controlled Substances Act, with a federal court directing the agency to “promptly” consider reclassifying cannabis.
Gaetz also spoke about the need to more broadly reform cannabis laws during the Monday remarks.
“The federal government listing marijuana as a Schedule I drug impairs financial transactions, it impairs research and it stops us from being able to unlock cures for some of America’s most vulnerable people,” the congressman said, adding that he’s a cosponsor of legislation that would deschedule marijuana that was introduced by Judiciary Chairman Jerry Nadler (D-NY).
Gaetz, who is also a member of the Judiciary Committee, said he is requesting that the panel hold a hearing on cannabis legislation. That’d mark the second such meeting after a Judiciary subcommittee convened last month to discuss paths to ending federal prohibition.
The congressman’s staff wasn’t able to provide Marijuana Moment with additional details regarding the meeting with Barr.
Photo courtesy of Meredith Geddings.
Elizabeth Warren’s Criminal Justice Plan Involves Legalizing Marijuana And Safe Injection Sites
Legalizing marijuana, granting clemency to people convicted of drug offenses and investing in harm reduction programs such as safe injection sites are part of a criminal justice reform plan that Sen. Elizabeth Warren (D-MA) released on Tuesday.
The 2020 Democratic presidential candidate stressed that the war on drugs has been carried out in a racially discriminatory manner, writing that it’s unfair that “a kid with an ounce of pot can get thrown in jail, while a bank executive who launders money for a drug cartel can get a bonus. It’s long past time for us to reform our system.”
“This failure [of the drug war] has been particularly harmful for communities of color, and we need a new approach,” she said. “It starts with legalizing marijuana and erasing past convictions, and then eliminating the remaining disparity between crack and powder cocaine sentencing.”
What’s more, the drug war “has criminalized addiction, ripped apart families—and largely failed to curb drug use” when a more effective system would treat addiction as a public health issue.
Next, we have to rethink what we choose to criminalize. That starts with repealing the 1994 crime bill—the bulk of which needs to go—and legalizing marijuana. Overcriminalization has filled prisons and devastated communities—and it's time for it to end.
— Elizabeth Warren (@ewarren) August 20, 2019
That includes diverting people who’ve been convicted of non-violent drug offenses to treatment programs and providing evidence-based resources for people suffering from addiction. For example, Warren’s plan calls for safe injection sites where people can use illicit drugs under the supervision of medical professionals who can help prevent fatal overdoses and get people into treatment. She also said needle exchange programs and expanding access to buprenorphine would reduce the opioid crisis.
“Instead of locking up people for nonviolent marijuana crimes, I’ve proposed putting pharmaceutical executives on the hook to report suspicious orders for controlled substances that damage the lives of millions.”
She also called for the abolition of certain mandatory minimum sentences and said that “people who struggle with addiction should not be incarcerated because of their disease.”
“Mass incarceration has not reduced addiction rates or overdose deaths, because substance abuse disorder is a public health problem — and it’s long past time to treat it that way,” the plan says. “We know that diversion programs are both more humane and a better investment than incarceration — for every dollar we invest in treatment programs, we can save $12 in future crime and health care costs.”
“And rather than incarcerating individuals with substance abuse disorders, we should expand options that divert them into programs that provide real treatment.”
Like Sens. Bernie Sanders (I-VT), Cory Booker (D-NJ) and South Bend, Indiana Mayor Pete Buttigieg, Warren’s criminal justice reform proposal also mentions executive actions she could unilaterally take.
Specifically, she wrote that the Justice Department should not hold authority to make clemency recommendations and it should instead be left up to an independent clemency board so that those eligible for a pardons and commutations are more quickly identified.
The president can grant clemency and pardons herself. I'll empower a clemency board to make recommendations directly to the White House, identifying broad classes of potentially-deserving individuals for review, such as those serving mandatory minimums that should be abolished.
— Elizabeth Warren (@ewarren) August 20, 2019
“I’ll direct the board to identify broad classes of potentially-deserving individuals for review, including those who would have benefited from retroactivity under the First Step Act, individuals who are jailed under outdated or discriminatory drug laws, or those serving mandatory minimums that should be abolished,” she said.
The plan’s unveiling comes two days after Sanders released his criminal justice reform proposal, which also called for marijuana legalization and the implementation of harm reduction policies such as safe consumption facilities.
Buttigieg’s plan stands out from his fellow Democratic candidates in at least one regard: the mayor said drug possession should broadly be decriminalized.
Warren also released a separate plan for Indian tribes last week that involves protecting tribal cannabis programs from federal intervention.
Photo courtesy of Edward Kimmel.