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Governors, Banking Associations And State Treasurers Tell Congress To Pass Marijuana Banking Bill

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The governors of 20 states and one U.S. territory—as well as bankers associations representing every state in the country and a coalition of state treasurers—recently sent letters to House leadership, expressing support for a bill to protect banks that service state-legal marijuana businesses that the chamber is set to vote on within hours.

Colorado Gov. Jared Polis (D) led the governors’ letter on Monday, which states that the officials “strongly support the passage of the Secure and Fair Enforcement (SAFE) Banking Act” in order to “remove the legal uncertainty and allow banks and credit unions to provide services to state-licensed cannabis-related businesses.”

“Because few banks and credit unions provide these services, state-licensed cannabis businesses predominantly operate on a cash basis,” the governors wrote. “Without banking services, state-licensed cannabis businesses are unable to write checks, make and receive electronic payments, utilize a payroll provider, or accept credit and debit cards.”

“Cash only businesses pose a significant public safety risk to customers and employees. The cash-only environment also burdens state and local government agencies that must collect tax and fee payments in person and in cash, which creates additional public expenses and employee safety risks.”

“State and federal governments have a shared interest in upholding the rule of law, protecting public safety, and transitioning markets out of the shadows and into our transparent and regulated banking system. Many of our states have implemented laws and regulations to reduce these risks while ensuring financial accountability of the cannabis industry. These public safety risks can be further mitigated on the federal level by passing the SAFE Banking Act to provide state-licensed cannabis businesses with access to banking service providers.”

Alongside Polis, the governors of California, Connecticut, Illinois, Louisiana, Maine, Massachusetts, Michigan, Nevada, New Jersey, New Mexico, New York, North Dakota, Oregon, Pennsylvania, Utah, U.S. Virgin Islands, Virginia, Washington, West Virginia and Wisconsin signed the letter.

“I’m proud that my fellow Governors and I are urging Congress to make the common sense decision to allow state-licensed cannabis-related businesses to access our financial institutions,” Polis said in a press release. “For more than a decade, Colorado has been a model of the success of these businesses and it’s well past time that we allow them to join our transparent and regulated banking system.”

Separately, bankers associations from all 50 states plus Puerto Rico sent a letter to House leadership on Monday that similarly voices support for passing the SAFE Banking Act, which they characterized as “an important step to address the conflict between federal and state laws and how banks safely work with legal cannabis and cannabis related businesses.”

“Although we do not take a position on the legalization of marijuana, our members are committed to serving the financial needs of their communities—including those that have voted to legalize cannabis,” the letter states. “Despite this ever-growing voter preference, current federal law continues to prevent banks from safely banking these businesses without fear of federal sanctions. As a result, this segment of our local economies is forced to operate on an all-cash basis, which creates serious public safety, revenue administration, and legal compliance concerns in the communities we serve.”

“The SAFE Banking Act is a banking-specific bipartisan solution that would address the reality of the current marketplace and allow banks to serve cannabis-related businesses in states where the activity is legal,” the associations said.

Last week, the National Association of State Treasurers also wrote to congressional leaders, saying that while its members don’t take a position on legalization in general, the group “remains concerned by the ancillary effects posed by legitimate participants in the industry lacking reliable access to the federally regulated banking system.”

“The National Association of State Treasurers continues to support commonsense federal laws and regulations to provide essential banking services to legitimate cannabis businesses, promote public safety and financial transparency, and facilitate tax and fee collection without compromising federal enforcement of anti- money laundering laws against criminal enterprises. To that extent, we fully support the key elements of the SAFE Banking Act that comport with our association’s policy as outlined in this letter and that is contained in our policy resolution.”

Three state attorneys general and the top prosecutor for Washington, D.C. sent a letter to congressional leaders earlier this month, and they also asked Congress to approve the reform.

The SAFE Banking Act, reintroduced by Rep. Ed Perlmutter (D-CO) and a long list of cosponsors last month, is expected to easily pass in the House after Monday’s debate wraps up.

It passed as a standalone bill in the chamber in 2019 with strong bipartisan support, and its language was also attached to two pieces of coronavirus relief legislation that the House approved. It didn’t advance in the Senate in any form under Republican control, however.

Among advocates and stakeholders, there’s an expectation that this year will be different now that Democrats control both chambers and the White House.

The legislation would ensure that financial institutions could take on cannabis business clients without facing federal penalties. Fear of sanctions has kept many banks and credit unions from working with the industry, forcing marijuana firms to operate on a cash basis that makes them targets of crime and creates complications for financial regulators.

Days after the legislation was introduced in the House last month, it was also refiled in the Senate, where Sens. Jeff Merkley (D-OR) and Steve Daines (R-MT) are the chief sponsors. That version currently has 32 cosponsors. It remains to be seen when the bill will be scheduled for action in the chamber.

After it passed the House last Congress, advocates and stakeholders closely watched for any action to come out of the Senate Banking Committee, where it was referred after being transmitted to the chamber. But then-Chairman Mike Crapo (R-ID) did not hold a hearing on the proposal, despite talk of negotiations taking place regarding certain provisions.

Crapo said he opposed the reform proposal, but he signaled that he might be more amenable if it included certain provisions viewed as untenable to the industry, including a two percent THC potency limit on products in order for cannabis businesses to qualify to access financial services as well as blocking banking services for operators that sell high-potency vaping devices or edibles that could appeal to children.

Sen. Sherrod Brown (D-OH), who took the top seat in that panel after Democrats secured a majority in the Senate, told reporters in February that he’s “willing” to move the cannabis banking bill, “but with it needs to come sentencing reform.”

When legislative leaders announced that the SAFE Banking Act was getting a House vote in 2019,  there was pushback from some advocates who felt that Congress should have prioritized comprehensive reform to legalize marijuana and promote social equity, rather than start with a measure viewed as primarily friendly to industry interests.

Rep. Earl Blumenauer (D-OR), co-chair of the Congressional Cannabis Caucus and an original cosponsor of the bill, said last month that the plan is to pass the banking reform first this session because it “is a public safety crisis now,” and it’s “distinct—as we’ve heard from some of my colleagues—distinct from how they feel about comprehensive reform.”

Meanwhile, congressional lawmakers are simultaneously preparing to introduce legislation to end federal cannabis prohibition.

Senate Majority Leader Chuck Schumer (D-NY), Senate Finance Chairman Ron Wyden (D-OR) and Sen. Cory Booker (D-NJ) are in the process of crafting a legalization bill, and they’ve already met with advocates to get feedback on how best to approach the policy change.

Schumer said last week that the legislation will be introduced and placed on the floor “soon.”

On the House side, Judiciary Chairman Jerrold Nadler (D-NY) said recently that he plans to reintroduced his legalization bill, the Marijuana Opportunity, Reinvestment and Expungement (MORE) Act, which cleared the chamber last year but did not advance in the Senate under GOP control.

Read the letter from the governors on the marijuana banking legislation below:

Governors Ask Congress To P… by Marijuana Moment

Read the letter from the National Association of State Treasurers on the cannabis reform bill below: 

Treasurers Ask Congress To … by Marijuana Moment

USPS Wants Hemp And CBD Vape Companies To Prepare For Upcoming Mailing Restrictions

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DEA Finally Ready To End Federal Marijuana Research Monopoly, Agency Notifies Grower Applicants

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The Drug Enforcement Administration (DEA) on Friday notified several companies that it is moving toward approving their applications to become federally authorized marijuana manufacturers for research purposes.

This is a significant development—and one of the first cannabis-related moves to come out of the Biden administration. There is currently a monopoly on federal cannabis cultivation, with the University of Mississippi having operated the only approved facility for the past half-century.

It was almost five years ago that DEA under President Barack Obama first announced that it was accepting applications for additional manufacturers. No approvals were made during the Trump administration. And the delay in getting acceptances has led to frustration—and in some cases, lawsuits—among applicants.

But on Friday, organizations including the Biopharmaceutical Research Company (BRC), Scottsdale Research Institute (SRI) and Groff NA Hemplex LLC were notified by the agency that their requests were conditionally accepted.

“DEA is nearing the end of its review of certain marijuana grower applications, thereby allowing it to soon register additional entities authorized to produce marijuana for research purposes,” DEA said. “Pending final approval, DEA has determined, based on currently available information, that a number of manufacturers’ applications to cultivate marijuana for research needs in the United States appears to be consistent with applicable legal standards and relevant laws. DEA has, therefore, provided a Memorandum of Agreement (MOA) to these manufacturers as the next step in the approval process.”

The Wall Street Journal first reported on the move, and it’s unclear just how many organizations have received a DEA communication so far.

Matt Zorn, who has represented SRI in a suit against DEA over the processing delays, told Marijuana Moment that the agency explained that it is “moving forward” with the facility’s application and that it appears to be “consistent with public interest” to give the institute the ability to grow marijuana for study purposes.

SRI’s Dr. Sue Sisley is in a process of completing a memorandum of agreement that DEA requested “so that it can be executed and official,” according to a press release.

BRC CEO George Hodgin said in another press release that after being finalized, “this federal license will forever change the trajectory of our business and the medicinal cannabis industry.”

“The DEA’s leadership will set off a nationwide wave of innovative cannabis-derived treatments, unlock valuable intellectual property and create high quality American jobs,” he said. “The BRC team is already familiar with DEA compliance procedures based on our extensive history of controlled substances activity, and our world class staff is ready to hit the ground running on this new business arm that the DEA has authorized.”

DEA said it has presented applicants that appear to meet legal requirements “with an MOA outlining the means by which the applicant and DEA will work together to facilitate the production, storage, packaging, and distribution of marijuana under the new regulations as well as other applicable legal standards and relevant laws.”

“To the extent these MOAs are finalized, DEA anticipates issuing DEA registrations to these manufacturers,” the agency said. “Each applicant will then be authorized to cultivate marijuana—up to its allotted quota—in support of the more than 575 DEA-licensed researchers across the nation.”

DEA said it “will continue to prioritize efforts to evaluate the remaining applications for registration and expects additional approvals in the future” and will publicly post information about approvals as they are finalized.

Following a 2019 suit against DEA by SRI, a court mandated that the agency take steps to process the cultivation license applications, and that legal challenge was dropped after DEA provided a status update.

That suit argued that the marijuana grown at the University of Mississippi is of poor quality, does not reflect the diversity of products available on the commercial market and is therefore inadequate for clinical studies.

That’s also a point that several policymakers have made, and it’s bolstered by research demonstrating that the federal government’s cannabis is genetically closer to hemp than marijuana that consumers can obtain in state-legal markets.

Last year, DEA finally unveiled a revised rule change proposal that it said was necessary to move forward with licensing approvals due to the high volume of applicants and to address potential complications related to international treaties to which the U.S. is a party.

SRI filed another suit against DEA in March, claiming that the agency used a “secret” document to justify its delay of approving manufacturer applications. And that was born out when the Justice Department Office of Legal Counsel document was released last year as part of a settlement in the case, revealing, among other things, that the agency feels that its current licensing structure for cannabis cultivation has been in violation of international treaties for decades.

Mississippi Supreme Court Overturns Medical Marijuana Legalization Ballot That Voters Approved

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Mississippi Supreme Court Overturns Medical Marijuana Legalization Ballot That Voters Approved

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A voter-approved initiative to legalize medical marijuana in Mississippi has been overturned by the state Supreme Court.

On Friday, the court ruled in favor of a Mississippi mayor who filed a legal challenge against the 2020 measure, nullifying its certification by the Secretary of State. The lawsuit was unrelated to the merits of the reform proposal itself, but plaintiffs argued that the constitutional amendment violated procedural rules for placing measures on the ballot.

While the court acknowledged that a “strong, if not overwhelming, majority of voters of Mississippi approved Initiative 65” to legalize medical cannabis in the state, Madison Mayor Mary Hawkins Butler’s (R) petition was valid for statutory reasons.

Madison’s challenge cites a state law stipulating that “signatures of the qualified electors from any congressional district shall not exceed one-fifth (1/5) of the total number of signatures required to qualify an initiative petition for placement upon the ballot.” But that policy went into effect when Mississippi had five congressional districts, and that’s since been reduced to four, making it mathematically impossible to adhere to.

The secretary of state and other officials pushed back against the lawsuit and argued that a plain reading of the state Constitution makes it clear that the intention of the district-based requirement was to ensure that signatures were collected in a geographically dispersed manner—and the result of the campaign met that standard.

But in the court’s 6-3 ruling released on Friday, the justices said that their hands were tied. The legislature or administration might be able to fix the procedural ballot issue, but it had to follow the letter of the law.

“We find ourselves presented with the question squarely before us and nowhere to turn but to its answer,” the decision states. “Remaining mindful of both the November 3, 2020 election results and the clear language in section 273 seeking to preserve the right of the people to enact changes to their Constitution, we nonetheless must hold that the text of section 273 fails to account for the possibility that has become reality in Mississippi.”

In sum, a Census-driven change in the number of congressional districts in Mississippi “did, indeed, break section 273 so that, absent amendment, it no longer functions,” meaning there’s no legal way to pass a constitutional ballot initiative in the state.

“Whether with intent, by oversight, or for some other reason, the drafters of section 273(3) wrote a ballot-initiative process that cannot work in a world where Mississippi has fewer than five representatives in Congress. To work in today’s reality, it will need amending—something that lies beyond the power of the Supreme Court.”

“We grant the petition, reverse the Secretary of State’s certification of Initiative 65, and hold that any subsequent proceedings on it are void,” the court ruled.

One justice who dissented said that the district-based requirement is arbitrary as it concerns Mississippi elections. While the federal government defines the state as having four congressional districts, the state Constitution “lays out the five districts,” and “there have been zero changes to the five districts” as far as the state’s laws are concerned.

In any case, this marks a major defeat for cannabis reform activists in the state who collected more than 214,000 signatures for their initiative. Sixty-eight percent of voters approved a general ballot question on whether to allow medical cannabis, and 74 percent signed off on advocates’ specific measure in a separate question.

“The Mississippi Supreme Court just overturned the will of the people of Mississippi,” Ken Newburger, executive director for the Mississippi Medical Marijuana Association, said in a press release. “Patients will now continue the suffering that so many Mississippians voted to end. The Court ignored existing case law and prior decisions. Their reasoning ignores the intent of the constitution and takes away people’s constitutional right.”

“It’s a sad day for Mississippi when the Supreme Court communicates to a vast majority of the voters that their vote doesn’t matter,” he said.

Under the voter-approved initiative, patients with debilitating medical issues would have been allowed to legally obtain marijuana after getting a doctor’s recommendation. The proposal included 22 qualifying conditions such as cancer, chronic pain and post-traumatic stress disorder, and patients would have been able to possess up to 2.5 ounces of marijuana per 14-day period.

There was an attempt in the legislature to pass a bill to legalize medical marijuana in the event that the court overruled the voter-approved initiative, but it failed to be enacted by the session’s end.

The Mississippi State Department of Health told WJTV that it will cease work on developing medical cannabis regulations in light of the court ruling.

“However, the agency has certainly learned a lot in the process of putting together a successful medical marijuana program, and we stand ready to help the legislature if it creates a statutory program,” Liz Sharlot, director of the Office of Communications for the department, said.

This is the latest state Supreme Court setback to affect cannabis reform efforts.

Last month, the Florida Supreme Court dealt a critical blow to marijuana activists working to legalize marijuana in the state—killing an initiative that hundreds of thousands of voters have already signed and forcing them to start all over again if they want to make the 2022 ballot.

While a Nebraska campaign collected enough signatures to qualify a reform initiative in 2020, the state Supreme Court shut it down following a legal challenge. It determined that the measure violated the state’s single-subject rule, much to the disappointment of advocates.

In South Dakota, the fate of an adult-use legalization initiative that voters approved last November is also in the hands of the state’s Supreme Court, where a sheriff is challenging its constitutionality based on a single subject rule as well.

Opponents to a Montana marijuana legalization measure that was approved by voters have also filed lawsuits contesting the voter-approved initiative for procedural reasons, arguing that its allocation of revenue violates the state Constitution. While the state Supreme Court declined to hear the case last year, it did not rule on the merits and left the door open to pursuing the case in district and appeals court, which plaintiffs then pursued.

Read the Mississippi Supreme Court ruling on the medical cannabis initiative below: 

Mississippi Supreme Court m… by Marijuana Moment

Congressional Bill Filed To Protect Marijuana Consumers From Losing Public Housing

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Congressional Bill Filed To Protect Marijuana Consumers From Losing Public Housing

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A congresswoman on Thursday reintroduced a bill that would allow people living in federally assisted housing to use marijuana in compliance with state law without fear of losing their homes.

As it stands, people living in public housing are prohibited from using controlled substances in those facilities regardless of state law, and landlords are able to evict such individuals. But the bill from Rep. Eleanor Holmes Norton (D-DC) would change that.

It would provide protections for people living in public housing or Section 8 housing from being displaced simply for using cannabis in states that have legalized it for medical or recreational purposes.

“Individuals living in federally assisted housing should not be denied admission, or fear eviction, for using a legal product,” Norton said on Thursday. “Adult use and/or medical marijuana is currently legal in 36 states and the District of Columbia, and over 90 percent of Americans support legalized medical marijuana.”

The legislation would also require the head of the Department of Housing and Urban Development (HUD) to enact regulations that restrict smoking marijuana at these properties in the same way that tobacco is handled.

“HUD, like DOJ, should not be allowed to enforce federal marijuana laws where states have taken action to legalize marijuana,” the congresswoman said, referring to a congressionally approved rider that prevents the Department of Justice from interfering with state medical cannabis laws.

Norton filed earlier versions of the Marijuana in Federally Assisted Housing Parity Act in 2018 and 2019, but they did not receive hearings or votes.

In 2018, a Trump administration official said that she was working to resolve conflicting federal and state marijuana laws as it applies to residency in federally-subsidized housing, but it’s not clear what came of that effort.

Rep. Alexandria Ocasio-Cortez (D-NY) also raised the issue during a committee hearing in 2019, pressing former HUD Secretary Ben Carson on policies that cause public housing residents and their families to be evicted for committing low-level offenses such as marijuana possession.

She pointed to two specific HUD policies: the “one strike” rule, which allows property managers to evict people living in federally assisted housing if they engage in illicit drug use or other crimes, and the “no fault” rule, which stipulates that public housing residents can be evicted due to illicit drug use by other members of their household or guests—even if the resident was unaware of the activity.

Ocasio-Cortez and then-Sen. Kamala Harris (D-CA) also filed legislation that year that would protect people with low-level drug convictions from being denied access to or being evicted from public housing.

Sen. Jeff Merkley (D-OR) also introduced an affordable housing bill last year that included a provision to prevent landlords from evicting people over manufacturing marijuana extracts if they have a license to do so.

Read the text of the marijuana housing legislation below: 

Norton cannabis housing bill by Marijuana Moment

Drug Possession Is Officially A Crime Again In Washington, But As A Misdemeanor Instead Of Felony

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