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.
New Hampshire Lawmakers Approve Marijuana Legalization Bill
A New Hampshire House committee approved a bill on Tuesday that would legalize marijuana for adult use in the state.
While the legislation doesn’t provide for retail sales, it would allow individuals 21 and older to possess and gift up to three-fourths an ounce of cannabis and grow up to six plants. The model would be similar to neighboring Vermont’s non-commercial cannabis system.
The Criminal Justice and Public Safety Committee advanced the bill in a 13-7 vote.
“I think that the legalization of cannabis is more popular than the legislature itself or the governor or any other political entity in the state of New Hampshire,” Chairman Renny Cushing (D) said prior to the vote. “This is something that the people of the state of New Hampshire want. They don’t want to be treated like they’re criminals if they have a plant.”
Watch New Hampshire lawmakers discuss the marijuana legalization bill below:
This vote comes a week after the panel held a hearing on the proposal, with advocates and stakeholders testifying in favor of the reform move.
“Like most Granite Staters, this committee understands that it’s time for New Hampshire to stop prohibiting cannabis,” Matt Simon, New England political director for the Marijuana Policy Project, said in a press release. “Adults in the ‘Live Free or Die’ state should not be punished for their choice to use a substance that is objectively less harmful than alcohol.”
“Now that New Hampshire is literally surrounded by jurisdictions where cannabis is legal for adults, our current policies can no longer be justified in any way,” he said. “It’s time for the House, Senate and Gov. Chris Sununu to work together and move cannabis policies into the 21st century.”
A floor vote by the full House of Representatives is expected on February 6.
Tax-and-regulate marijuana legislation has advanced in the legislature in prior sessions, but it never arrived on the governor’s desk.
Even if it did make it that far, however, it’s unclear if Sununu, a Republican, would sign it. He’s voiced opposition to commercial legalization, and he vetoed a bill last year that would’ve allowed medical cannabis patients to cultivate their own marijuana, raising questions about whether he’d be willing to support this latest measure extending that right to all adults over 21.
In any case, the New Hampshire development comes amid a flurry of legislative activity around cannabis in the Northeast.
New York Gov. Andrew Cuomo (D) included legalization in his budget last week, as did Rhode Island’s governor, who pitched a state-run cannabis model in her plan. In New Jersey, the legislature approved a referendum to put the question of recreational legalization before voters during the November election. Top lawmakers in Connecticut are also confident that marijuana reform will advance this year. In Vermont, advocates are hopeful that lawmakers will add a legal sales component to the state’s current noncommercial cannabis law.
Photo courtesy of Philip Steffan.
AOC Says Colorado Is Doing A ‘Great Job’ With Marijuana Legalization
Rep. Alexandria Ocasio-Cortez (D-NY) says Colorado is an example of a state that’s effectively taxing and regulating marijuana.
At a town hall event in Iowa on Saturday, the congresswoman, who serves as a surrogate for Sen. Bernie Sanders’s (I-VT) presidential campaign, was asked if revenue from legal sales of cannabis and other drugs would be used to fund the senator’s Medicare for All proposal.
While she said the economic benefits of legalization are secondary concerns, she acknowledged that “Colorado is doing a great job of taxing it to fund schools.”
That said, funding large programs such as universal health care would require a diverse financing strategy, Ocasio-Cortez said.
“In terms of financing, I think the financing for our health care program would potentially come from different sources,” she said. “Senator Sanders has outlined how he would pay for Medicare for All.”
“I would just say the financing is a different question,” she said. “But when it comes to decriminalization and legalization, I know that the senator believes in the legalization of marijuana and, frankly, having that part of a decarceral approach” to the criminal justice system.
Listen to the conversation below, starting around 1:45:
“We need to not only have a conversation about decriminalization and a conversation about legalization, but we need to have a conversation about the harm done during the war on drugs,” she said in comments that were first flagged by The Washington Post’s Dave Weigel.
First actual Q for AOC as a Sanders surrogate: Would she legalize drugs to pay for M4A?
"The funding is going to come from a lot of sources," she says, clarifying that Sanders supports legalizing only marijuana and is focused on ending war on drugs.
— Dave Weigel (@daveweigel) January 25, 2020
“It exacerbated the racial wealth gap in America as well,” she said. “But not only that, it tore apart communities, it tore apart families and it was an explicit targeting of black and brown communities that dates back to the Nixon administration.”
“On one hand it’s an economic issue, but much deeper, it’s a justice issue. This is an issue of justice, this is an issue of mass incarceration. The United States has historically incarcerated more people per capita than any other country in the world. We need to live up to our values about what ‘Land of the Free’ means and transitioning to that means dismantling the system of mass incarceration. That’s an incredibly important part of this agenda.”
While Sanders has been a long-standing champion of cannabis reform, his views on broader drug policy proposals diverge from those of his surrogate, who believes that possession of all currently illicit drugs should be decriminalized and federal laws around psychedelics should be loosened to promote research.
Despite being widely regarded as the most progressive candidates in the race, both Sanders and Sen. Elizabeth Warren (D-MA) have so far declined to back comprehensive decriminalization for simple drug possession, a policy changed favored by former South Bend, Indiana Mayor Pete Buttigieg.
Rep. Tulsi Gabbard (D-HI), another 2020 contender, recently said that she’s in favor of legalizing and regulating controlled substances.
Photo courtesy of C-SPAN.
USDA Approves Hemp Plans For Texas, Nebraska And Delaware
The U.S. Department of Agriculture (USDA) announced on Monday that it has approved hemp regulatory plans for three more states and four additional Indian tribes.
This is the latest in a series of approvals that USDA has doled out since the crop and its derivatives were federally legalized under the 2018 Farm Bill. Texas, Nebraska and Delaware—in addition to the Colorado River Indian Tribes, the Fort Belknap Indian Community, the Iowa Tribe of Kansas and Nebraska and the Yurok Tribe—each had their regulatory plans cleared.
“USDA continues to receive and review hemp production plans from states and Indian tribes on an ongoing basis,” the department said in a notice. “Plans previously approved include those for the states of Louisiana, New Jersey, and Ohio, and the Flandreau Santee Sioux, Santa Rosa Cahuilla, and La Jolla Band of Luiseno Indian Tribes.”
While hemp is no longer a federally controlled substance, farmers interested in cultivating and selling the crop must live in a jurisdiction where USDA has approved a proposed regulatory scheme. The process was outlined in an interim final rule USDA published late last year. If a state or tribe does not have, or plan to propose, regulations for hemp, cultivators can apply for a USDA license instead.
“This is a victory for Texas farmers,” Texas Agriculture Commissioner Sid Miller said in a statement. “We are one step closer to giving our ag producers access to this exciting new crop opportunity.”
“We’ve got to get our rules approved and get our licensing program up and running, but the dominoes are dropping pretty quick,” he said. “We’re almost there.”
Heather Fazio, director of Texans for Responsible Marijuana Policy, told Marijuana Moment that “Texas has the potential to be the largest supplier of hemp in the U.S., providing farmers with an unprecedented opportunity.”
“With approval from the USDA and the Texas Department of Agriculture already moving forward with establishing licensing standards, it’s refreshing to see our government paving the way for legal cannabis cultivation in Texas,” Fazio said.
While lawmakers and industry stakeholders have widely celebrated USDA’s commitment to implementing hemp legalization, it has also received a significant amount of pushback over proposed rules such as THC limits and laboratory testing requirements. A public comment period for the department’s interim rule ends on Wednesday.
USDA maintains a website that tracks the status of state and tribal hemp plans.
Monday’s announcement sends another signal to the hemp industry that the federal government is committed to supporting the market and ensuring that farmers have the resources they need to see their businesses thrive since the crop was legalized.
That said, one of the most lucrative market opportunities that hemp farmers are hoping to take advantage of is the widespread interest in hemp-derived CBD products. The Food and Drug Administration (FDA) has jurisdiction over rules for marketing CBD, and the agency has made clear that the process may take several years without congressional action.
Earlier this month, a bipartisan coalition of lawmakers set out to do just that, filing a bill that would require FDA to allow CBD products to be sold as dietary supplements.
Photo courtesy of Brendan Cleak.