The Republican chair of the Senate Banking Committee said on Thursday that his panel will hold a vote on legislation allowing banks to service state-legal marijuana businesses this year.
Chairman Mike Crapo (R-ID) told Politico that while he doesn’t support ending federal cannabis prohibition, his committee will take up the industry’s banking issues, which was the subject of a hearing the panel held in July. Because marijuana remains federally illegal, many financial institutions remain wary of taking on cannabis business clients—forcing them to operate on a cash-only basis—and there’s a growing bipartisan call to resolve the problem.
Crapo doesn’t support cannabis legalization. But he says he’s been compelled to act bc cannabis businesses w/o bank access are forced to transact in cash and there are issues surrounding transactions with businesses like plumbers, hardware stores, etc that serve the industry
— Zachary Warmbrodt (@Zachary) September 12, 2019
“We’re working to try to get a bill ready,” the senator said. “I’m looking to see whether we can thread the needle.”
Legislation to provide financial services to marijuana businesses—the Secure and Fair Enforcement (SAFE) Banking Act—already exists and was approved by the House Financial Services Committee in March. That bill has 206 cosponsors, including 26 Republicans. The companion Senate bill has nearly a third of the chamber signed on.
It’s not clear what changes Crapo is hoping for, but there’s been talk of adding hemp-specific banking protections, or including language to prevent activities such as Operation Choke Point, an Obama-era policy that conservatives view as biased against certain industries such as gun manufacturers, in order to bolster the proposal’s GOP appeal.
This development comes as Congress returns from a summer recess. Cannabis reform advocates hoped that the Democratic-controlled House would put the SAFE Act to a vote before August, but that window passed.
There have been renewed rumors that House leadership is planning to schedule a vote on the SAFE Act soon, but some dispute has broken out among cannabis reform supporters about the notion of passing a bill seen as industry-focused prior to moving broader legislation to deschedule marijuana and repair the harms of past prohibition enforcement.
Many supporters of more far-reaching moves have zeroed in on a bill House Judiciary Committee Chairman Jerrold Nadler (D-NY) filed, but it’s unclear when that legislation would be able to see a markup by the panel, which for now is focused on issues such as gun reform and the prospect of impeachment proceedings.
If the Republican-controlled Senate were to pass marijuana banking legislation soon, it could increase political pressure on House majority Democrats to follow suit lest they be seen as lagging on an issue on which their party has increasingly sought to lead.
Don Murphy, federal policies director for the Marijuana Policy Project, told Marijuana Moment that polling in Crapo’s home state of Idaho—one of only three states that currently have no legal cannabis laws on the books—shows that voters in the state support cannabis reform and that “it appears Chairman Crapo is seeing similar results.”
“Apparently MPP hasn’t done the only marijuana poll in Idaho recently,” he said. “Idaho voters support marijuana policy reform and with his support of the SAFE Act the Senator is moving in their direction. What took years to develop could end up in a photo finish as each chamber attempts to beat the other to a floor vote. If true, this is a very good news.”
Idaho activists are working to place a medical cannabis measure on the state’s 2020 ballot.
While it’s not clear Crapo that endorses the SAFE Act as written or that he would use an amended version of the existing bill as the vehicle to advance the issue, he’s made several statements indicating that he’s interested in a legislative fix on cannabis banking.
“We may craft our own bill or we may work with them to craft any amended legislation,” he told Politico.
“It would be terrific for the Senate Banking Committee to hold a markup on The Safe Banking Act, which we believe would result in a favorable bipartisan vote,” NORML Political Director Justin Strekal told Marijuana Moment. “Now more than ever, members of Congress spanning all types of geographic and political diversity recognize the need to amend existing law and move us towards ending federal prohibition.”
Crapo told Politico that he’s particularly interested in passing cannabis banking reform legislation because of the negative impact of the ban on ancillary businesses like plumbing and hardware companies that work with such businesses but don’t deal directly with marijuana.
The head of the American Bankers Association (ABA) predicted last week that the House would vote on the legislation before October.
THIS is a very important development- thank you @MikeCrapo for helping advance this legislation that will allow people and businesses access to the banking sector in states that have legalized cannabis and address the state/federal law inconsistency https://t.co/GzHo5cXuxA
— Rob Nichols (@BankersPrez) September 12, 2019
“THIS is a very important development- thank you [Sen. Crapo] for helping advance this legislation that will allow people and businesses access to the banking sector in states that have legalized cannabis and address the state/federal law inconsistency,” he wrote in response to the senator’s latest comments.
Politically, passing the banking bill in the Senate could give Sen. Cory Gardner (R-CO), its chief GOP cosponsor, a much-needed win heading toward next year’s election. Democratic candidates, including former Colorado Gov. John Hickenlooper (D) are targeting the seat, and Gardner has made much of his work to support the state’s legal cannabis market.
Mitch McConnell Presses FDA Nominee On CBD And Hemp
Senate Majority Leader Mitch McConnell (R-KY) met with the nominee to become the next Food and Drug Administration (FDA) commissioner on Wednesday and discussed the need for a regulatory framework for CBD products.
While there are few specific details available about their conversation, McConnell said he emphasized the importance of hemp legalization for Kentucky farmers and pointed out that those producers are also facing challenges given the lack of FDA regulations concerning CBD.
“I look forward to working closely with Dr. Hahn on several important issues for Kentucky,” McConnell said in a press release. “Like many Kentuckians who are taking advantage of hemp’s legalization, I am eager for FDA’s plans to create certainty for CBD products.”
As @senatemajldr, Senator Mitch McConnell advocates for #Kentucky priorities with the Trump Administration and discussed his Tobacco 21 legislation, #hemp, and CBD with President @realDonaldTrump’s nominee for @US_FDA Commissioner: https://t.co/GZhkVgPeFV pic.twitter.com/a0gBs9z42u
— Senator McConnell Press (@McConnellPress) November 20, 2019
The majority leader has previously pressed FDA to issue enforcement discretion guidance that prioritizes action against only CBD companies making especially unfounded medical claims about their products while allowing responsible businesses to continue to market their products as the agency continues to develop rules.
McConnell similarly raised his concerns about the importance of expediting CBD regulations during a separate meeting with Acting FDA Commissioner Ned Sharpless in June.
Stephen Hahn, the FDA nominee, was also pressed on CBD issues during a confirmation hearing on Wednesday. Sens. Jacky Rosen (D-NV) and Pat Roberts (R-KS) noted that there’s wide consumer interest in the cannabis products but stressed that more research is needed, barriers to research should be lifted and public health interests should be balanced with policies that support the industry.
Hahn replied that he believed there’s untapped therapeutic potential in the cannabis compound, but he also agreed that there are “unanswered questions that need to be filled in by data and science and research.”
In related developments, several consumer groups have recently expressed concerns about the current status of the CBD market.
Three groups—National Consumers League, Consumer Federation of America and Community Anti-Drug Coalitions of America—announced on Tuesday that they are launching an initiative called “Consumers for Safe CBD” that is designed to “warn the public of the potential risks related to CBD products.”
According to a press release, the coalition will also encourage FDA “to use its existing authority to protect consumers, provide guidance to manufacturers, and encourage further research for FDA-approved CBD treatments.”
Another group, the Consumer Healthcare Products Association (CHPA), launched a citizen petition to FDA last week that implores the agency to quickly develop rules for CBD so that the products can be lawfully marketed as dietary supplements.
“Intense consumer demand and commercial interest has resulted in a flood of CBD products of uncertain quality and unapproved claims already in the marketplace, and this scenario has created an urgent need for FDA action,” CHPA President Scott Melville said in a press release.
“The request in our petition seeks to have FDA utilize the authority it already has to establish a lawful regulatory pathway for manufacturers to bring dietary supplements containing CBD to market,” he said. “Only then will consumers be able to purchase CBD-containing dietary supplements in a manner that ensures product quality, safety, and a level-playing field for enforcement.”
Photo courtesy of Twitter/Senate Majority Leader.
Senators Push USDA To Adopt Five Changes To Proposed Hemp Regulations
Sens. Ron Wyden (D-OR) and Jeff Merkley (D-OR) sent a letter to the head of the U.S. Department of Agriculture (USDA) on Wednesday, requesting a series of changes to draft rules for hemp that the department released last month.
The senators said they appreciate that USDA issued the proposed regulations, which is a “necessary step to establish a domestic federal hemp production program.” However, they wanted to highlight “several concerns about the unintended and potentially harmful effects this interim final rule would have on hemp production in Oregon and across the country.”
In the letter to Agriculture Sec. Sonny Perdue, they listed five issues with the regulations and suggested potential fixes. Many of the concerns echoed those that stakeholders have submitted to USDA as part of a public comment period the department launched on October 31. Here’s what the senators highlighted:
—As written, the draft rules call for hemp to be tested within 15 days before harvest. Farmers have argued that’s far too little time, and the senators said it presents an “impossible obstacle for growers to overcome.” Oregon regulations require testing within 28 days, so they said USDA should adopt a similar timeline.
—USDA said that testing must be completed at a laboratory registered with the Drug Enforcement Administration. The senators said that will produce a bottleneck and delays for hemp producers, and that independent laboratories such as those operating in Oregon should be allowed to conduct the tests.
—The senators said that USDA should allow for forms of THC concentration testing that do not involve post-decarboxylation and also argued that the congressional intent of hemp legalization was not to require testing of all THC compounds but rather just delta-9 THC in particular.
—USDA requires that testing samples come from the top one-third of the flower portion of the plant. Instead, the senators said, samples should follow established protocol in states like Oregon, which stipulates that samples should be taken from the flowering tops when they’re present and be eight inches long.
—While the Farm Bill defines hemp as cannabis containing no more than 0.3 percent THC on a dry weight basis, USDA gave slight margin of error and considers any plants with more than 0.5 percent THC to be in violation of the regulations. Farmers have called that limitation arbitrary and the senators said it would be more reasonable to set the negligence threshold at 1 percent, if there must be a THC restriction at all.
“Farmers in Oregon and across the country are on the precipice of an agricultural boom that, with the right regulatory framework, stands to boost rural economies in every corner of the country,” they wrote.
Wyden and Merkley have been some of the most vocal proponents of developing USDA regulations that bolster the hemp industry since the passage of the Farm Bill, through which they worked to legalize the crop in the first place. As early as February, Wyden and Senate Majority Leader Mitch McConnell (R-KY) were knocking at USDA’s door, urging the department to expedite the rulemaking process.
Read the full senators’ letter to USDA on hemp regulations below:
Photo courtesy of Brendan Cleak.
Virginia Attorney General Hosts ‘Cannabis Summit’ To Advance Reform In New Democratic Legislature
Virginia’s attorney general is inviting state lawmakers to a “Cannabis Summit” next month as talk about advancing marijuana decriminalization and other reforms during the 2020 legislative session picks up.
Officials from other states that have legalized or decriminalized cannabis will speak at the event, as will academics who study the issue.
“This upcoming General Assembly Session policymakers will be considering legislation related to cannabis use in the Commonwealth,” an invitation states. “This summit is designed to better inform those discussions and offer perspectives from states that have implemented similar changes at the state level.”
“The summit will consist of 4 panels of experts from around the country to speak on the following topics related to cannabis policy: decriminalization of marijuana, social equity, regulating CBD & Hemp products, pathways towards legalization through legislative efforts and other topics that will better inform the upcoming legislative work,” reads the invitation sent out by the attorney general’s office, which was first reported by The Virginia Mercury.
Attorney General Mark Herring (D) said last month that the legislature will first move to pass a cannabis decriminalization bill—something that Gov. Ralph Northam (D) had campaigned on and talked about in his State of the State address.
Lawmakers will then “get to work on a larger study about how and when we could move toward legal and regulated adult use,” Herring said.
It's time for Virginia to decriminalize, address past convictions, and move toward legal, regulated adult use.https://t.co/aqWxQCVPIg
— Mark Herring (@MarkHerringVA) November 20, 2019
“Criminalizing marijuana possession is not working. It is needlessly creating criminals, saddling people with convictions and costing taxpayers millions each year,” the attorney general wrote in an op-ed for the Virginian-Pilot this week. “The social and human costs are tremendous, and the weight of the system falls disproportionately on African Americans and people of color. There are smarter, better ways we can handle cannabis and that begins with decriminalizing simple possession of small amounts, addressing past convictions and moving towards legal, regulated adult use.”
The chances of getting cannabis reform policies through the General Assembly significantly increased after this month’s election, which saw Democrats reclaim control of both chambers for the first time in decades.
Accordingly, a lawmaker prefiled a cannabis decriminalization bill this week that would make possession of up to one ounce of marijuana punishable by a maximum $50 civil penalty.
The announcement of the Cannabis Summit, which will take place in Richmond on December 11, is another signal that political support for reforming Virginia’s marijuana laws is strong. And while Northam has not endorsed adult-use legalization, the inclusion of that issue in panel discussions indicates that decriminalization is just the beginning of the conversation. Advocates are also pushing the state to expand its limited medical cannabis program.
“The attorney general’s public support for advancing evidence-based cannabis policy, coupled with the recent formation of the Virginia Cannabis Caucus, set the stage for a robust and unprecedented exploration of real-world experiences with decriminalization, legalization and regulation in other states,” Jenn Michelle Pedini, executive director of Virginia NORML, told The Virginia Mercury.
NORML honored Herring with its “Vanguard Award” as part of its national conference in September.
Photo courtesy of Mike Latimer.