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House Approves Marijuana Banking Bill In Historic Vote

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The House of Representatives passed a standalone marijuana reform bill for the first time in history on Wednesday.

The chamber advanced the legislation—which would protect banks that service the cannabis industry from being penalized by federal regulators—in a vote of 321-103.

All but one Democrat voted in favor of the bill. Republicans were virtually split, with 91 voting for the legislation and 102 opposing it.

For six years, lawmakers have been pushing for the modest reform, which is seen as necessary to increase financial transparency and mitigate risks associated with operating on a largely cash-only basis—something many marijuana businesses must do because banks currently fear federal reprisal for taking them on as clients.

Watch the House debate and vote on marijuana banking below:

The Secure and Fair Enforcement (SAFE) Banking Act is sponsored by Rep. Ed Perlmutter (D-CO). It cleared the House Financial Services Committee in March and was officially scheduled for a floor vote last week. The vote was held through a process known as suspension of the rules, meaning it required two-thirds of the chamber (290 members if all were present) to approve it for passage.

While the House has approved historic cannabis amendments in the past, including one this summer that would protect all state marijuana programs from federal intervention, those have had to be renewed annually. This is the first time a standalone reform bill was approved in the chamber, and the policy will be permanently codified into law if the Senate follows suit and the president signs it.

“If someone wants to oppose the legalization of marijuana, that’s their prerogative, but American voters have spoken and continue to speak and the fact is you can’t put the genie back in the bottle. Prohibition is over,” Perlmutter said on the floor. “Our bill is focused solely on taking cash off the streets and making our communities safe and only congress can take these steps to provide this certainty for businesses, employees and financial institutions across the country.”

 

Rep. Denny Heck (D-WA) made an impassioned case for the bill, sharing an anecdote about a security guard who worked for a cannabis shop who was killed on the job and emphasizing that the legislation would mitigate the risks of violent crime at these businesses.

“You can be agnostic on the underlying policy of whether or not cannabis should be legal for either adult recreational use or to treat seizures, but you cannot be agnostic on the need to improve safety in this area,” he said.

“This bill is not only timely, but extremely necessary,” Rep. Barbara Lee (D-CA) said. “Right now the cannabis industry needs access to safe and effective banking immediately.”

Rep. Patrick McHenry (R-NC), ranking member of the House Financial Services Committee, raised concerns about the legislation and suggested that the bill would provide drug cartels with access to financial services. He was one of just three lawmakers who rose in opposition to the bill, with the remaining time on the opposition end having been yielded to supporters.

The legislation hasn’t been without controversy, even among pro-reform advocates. After Majority Leader Steny Hoyer (D-MD) announced his intent to put the bill on the floor by the end of the month, several leading advocacy groups including the ACLU, Drug Policy Alliance (DPA) and Center for American Progress wrote a letter asking leadership to delay the vote until comprehensive legalization legislation passed.

The groups has expressed concerns to Financial Services Chairwoman Maxine Waters (D-CA) that approving the banking bill first could jeopardize the chances of achieving more wide-ranging reform that addressed social equity issues such as legislation introduced by Judiciary Chairman Jerrold Nadler (D-NY). They said they were caught off guard when Hoyer announced the vote.

But as the vote approached, advocates and lawmakers wasted no time emphasizing the need to go further than the banking bill.

“I have long fought for criminal justice reform and deeply understand the need to fully address the historical racial and social inequities related to the criminalization of marijuana,” Waters said in a press release on Tuesday. “I support legislation that deschedules marijuana federally, requires courts to expunge convictions for marijuana-related offenses, and provides assistance such as job training and reentry services for those who have been disproportionately affected by the war on drugs.”

She reiterated that point during debate on the floor, stating that the banking legislation “is but one important piece of what should be a comprehensive series of cannabis reform bills.”

Nadler also released a statement stating that while he would vote yes on the SAFE Banking Act, he is “committed to marking up [his legalization bill] and look[s] forward to working with reform advocates and my colleagues in this important effort going forward.”

Hoyer also weighed in on the need for broader reform in a statement on Wednesday.

“I am proud to bring this legislation to the Floor, but I believe it does not go far enough,” he said. “This must be a first step toward the decriminalization and de-scheduling of marijuana, which has led to the prosecution and incarceration of far too many of our fellow Americans for possession.”

Rep. Steve Cohen (D-TN) applauded the Judiciary Committee chairman for announcing he will hold a markup of comprehensive cannabis legalization following this vote.

“Today’s vote is a significant first step, but it must not be the last. Much more action will still need to be taken by lawmakers,” NORML Political Director Justin Strekal told Marijuana Moment. “In the Senate, we demand that lawmakers in the Senate Banking Committee hold true to their commitment to move expeditiously in support of similar federal reforms. And in the House, we anticipate additional efforts to move forward and pass comprehensive reform legislation like The MORE Act—which is sponsored by the Chairman of the House Judiciary Committee—in order to ultimately comport federal law with the new political and cultural realities surrounding marijuana.”

Steve Hawkins, executive director of the Marijuana Policy Project, said the “cannabis industry can no longer proceed without the same access to financial services that other legal companies are granted.”

“This decision is an indication that Congress is more willing than ever to support and take action on sensible cannabis policies. The passage of the SAFE Banking Act improves the likelihood that other cannabis legislation will advance at the federal level. It is important to recognize that the SAFE Banking Act, if passed by the Senate and signed into law by the president, would strengthen efforts to increase the diversity of the cannabis industry.”

“We applaud the House for approving this bipartisan solution to the cannabis banking problem, and we hope the Senate will move quickly to do the same,” Neal Levine, CEO of the Cannabis Trade Federation, said. “This vital legislation will have an immediate and positive impact, not only on the state-legal cannabis industry, but also on the many communities across the nation that have opted to embrace the regulation of cannabis.”

“Allowing lawful cannabis companies to access commercial banking services and end their reliance on cash will greatly improve public safety, increase transparency, and promote regulatory compliance,” he said.

DPA noted that it had “no objections to the substance of the SAFE Banking bill,” but that the organization and its allies However, DPA and allies “sent a letter of concern because we believe it is a mistake for the House to pass an incremental industry bill before passing a comprehensive bill that prioritizes equity and justice for the communities who have suffered the most under prohibition.”

“We are encouraged by the announcement from House Judiciary Chairman Jerry Nadler that he intends to hold a vote on MORE and will push him in the coming weeks to commit to a date,” DPA Policy Coordinator Queen Adesuyi said. “We also thank Majority Leader Hoyer for his commitment to work with Mr. Nadler and others to advance broader marijuana reform in this Congress.”

“The marijuana banking bill cannot be the end of the road for marijuana reform this Congress,” she said.

Ahead of the vote, Rep. Joe Neguse (D-CO) said “Only Congress can provide the certainty financial institutions need to start banking cannabis-related legitimate businesses” and that he’s “proud to support the SAFE Banking Act today to support hard-working Coloradans and their families.”

Rep. Kendra Horn (D-OK), said in a floor speech earlier on Wednesday morning that current law is “endangering communities as well as inhibiting small businesses from growing.”

“This industry is bringing revenue to our state, creating small businesses and helping those suffer with physical illness to relieve their ailments,” she said. “The SAFE Banking Act supports this growing Oklahoma industry, our banks and works to keep Oklahomans that work in and around this industry safe.”

“Access to safe banking is a big deal for the businesses and employees in New Mexico who work in the cannabis industry. It’s why I’m a cosponsor of the SAFE Banking Act & will be voting for it today,” Rep. Deb Haaland (D-NM) said.

 

Many have viewed the banking proposal as the first step on the pathway to ending federal cannabis prohibition, and it’s consistent with an agenda outlined by Rep. Earl Blumenauer (D-OR) last year through which he suggested that committees advance incremental marijuana reforms under their respective jurisdictions, leading up to the eventual passage of a full legalization bill.

“We’re in this fix today because Congress has refused to provide the partnership and the leadership that the states demand,” Blumenauer said on the floor. ”The states aren’t waiting for us.”

“This is an important foundation, but it’s not the last step,” he said. We have important legislation that’s keyed up and ready to go. This approval today will provide momentum that we need for further reform that we all want and will make America safer and stronger.”

That said, while the vote signals that the House has a clear appetite for reform, it remains to be seen if the Republican-controlled Senate will approve the banking bill. Apparently anticipating that conservative lawmakers might not support the legislation as it passed out of committee, Perlmutter moved to add amendments last week that were designed to broaden its GOP appeal.

Those provisions include clarifying that hemp and CBD businesses would also be protected and stipulating that federal regulators couldn’t target certain industries such as firearms dealers as higher risk of fraud without valid reasoning.

That’s likely to endear Senate Banking Committee Chairman Mike Crapo (R-ID) to the SAFE Banking Act. His panel held a hearing on the issue in July, and the senator said he wants to have a vote on cannabis financial services legislation by the end of the year but also suggested at the time that it might not be a copy of Perlmutter’s bill.

The hemp-focused provisions are also intended to appeal to Senate Majority Leader Mitch McConnell (R-KY), who championed the crop’s federal legalization through last year’s Farm Bill but has said he doesn’t support its “illicit cousin” marijuana.

Kevin Sabet, president of the prohibitionist group Smart Approaches to Marijuana, recognized the inevitability of the House passing the legislation hours before the vote and said Perlmutter’s amendments were key to its advancement.

“This is a gift to Big Tobacco, which has already invested billions into pot,” Sabet said in a statement following the vote. “Granting this industry access to banks will bring billions of dollars of institutional investment from the titans of addiction and vastly expand the harms we are already witnessing.”

The legislation might also face pushback from some Senate Democrats who share concerns expressed by advocacy groups that it’s important to move on comprehensive reform before tackling banking. Senate Minority Leader Chuck Schumer (D-NY) and Sens. Cory Booker (D-NJ), Kamala Harris (D-CA) and Bernie Sanders (I-VT) each recently indicated that their votes could possibly be contingent on advancing a justice-focused legalization bill.

Rep. Alexandria Ocasio-Cortez (D-NY) suggested last week that she also might withhold her vote for the same reasons, but she ultimately approved it.

Tough work still lies ahead for lawmakers and advocates if they hope to enact the banking bill into law this Congress but, for the moment, there’s an air of celebration as the House made history by voting to pass a standalone cannabis reform bill for the first time.

“Having worked alongside congressional leaders to resolve the cannabis industry’s banking access issues for over six years, it’s incredibly gratifying to see this strong bipartisan showing of support in today’s House vote,” Aaron Smith, executive director of the National Cannabis Industry Association, said. “Now, it’s time for the Senate to take swift action to approve the SAFE Banking Act so that this commonsense legislation can make its way to the President’s desk.”

“This bipartisan legislation is vital to protecting public safety, fostering transparency, and leveling the playing field for small businesses in the growing number of states with successful cannabis programs,” he said.

Update: This story has been updated to include additional commentary. 

Key Committee Chair Broke Promise On Marijuana Justice Before Banking Vote, Advocates Say

Image element courtesy of Tim Evanson.

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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Bernie Sanders Congratulates Canada On One-Year Marijuana Legalization Anniversary

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Sen. Bernie Sanders (I-VT) offered his congratulations to Canada on Thursday, marking the one-year anniversary of the country’s implementation of a legal marijuana market.

“Congratulations to our neighbors to the north on completing their first year of marijuana legalization!” the 2020 Democratic presidential candidate said on Twitter. “Vermont shares a border with Canada, and as far as I can tell, the sky has not fallen and the cities have not plunged into anarchy on the other side.”

Canadian Prime Minister Justin Trudeau made cannabis legalization a key campaign promise, and while it took longer than some had anticipated, lawmakers approved a historic reform bill in June 2018. It went into effect on October 17 last year.

He also acknowledged the anniversary on Thursday, stating at a press conference that the decision “to keep our communities safer and remove profits of the pockets of organized crime was the right one.”

It’s not clear how much of a boost that achievement will give Trudeau when voters head to the polls on Monday for a national election that could see the Liberal Party removed from the majority as the prime minister faces backlash over controversies such as revelations he on several occasions wore blackface and brownface.

But regardless of the election outcome, leaders from all parties—including the Conservatives, all of whom voted against the legalization bill in the Senate except one—have said they would not reverse the law. Instead, one of the main drug policy issues that have separated the leaders is their respective positions on decriminalizing possession of substances beyond marijuana.

Trudeau and Sanders share a personal opposition to the reform move, with the senator stating on two occasions recently that he’s “not there yet” on the issue. The prime minister has similarly stated that decriminalization is not on his agenda and that he remains focus on cannabis.

The New Democratic Party and its leader, Jagmeet Singh, are in favor of broad drug decriminalization, as are the Green Party and its leader Elizabeth May.

The issue also came up during a Democratic presidential debate in the U.S. on Tuesday. Entrepreneur Andrew Yang and former Rep. Beto O’Rourke (D-TX) both expressed support for decriminalizing possession of opioids.

South Bend, Indiana Mayor Pete Buttigieg (D) and Rep. Tulsi Gabbard (D-HI) have endorsed decriminalizing possession of all drugs.

Sanders didn’t weigh in on the issue at that debate, but when asked to address his recent health episode, Sen. Cory Booker (D-NJ) chimed in to joke that “Sanders is in favor of medical marijuana, I want to make sure that’s clear as well.”

“I do,” Sanders said, adding that “I’m not on it tonight.”

Where Canada’s Political Parties Stand On Marijuana And Drugs Ahead Of The Election

Photo courtesy of Phil Roeder.

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Key GOP Senate Chairman Outlines Changes He Wants For Marijuana Banking Bill

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The head of the Senate Banking Committee is clarifying which aspects of a House-passed marijuana banking bill he would like to change as his panel moves toward taking up the legislation.

In a Thursday interview with Marijuana Moment on Capitol Hill, Chairman Mike Crapo (R-ID) described modifications he is working on to the Secure and Fair Enforcement (SAFE) Banking Act, which cleared the House along bipartisan lines in a 321-103 vote last month.

“The things we’re looking at are, first of all, to make sure we improve and clarify the interstate banking application of all of this,” Crapo said. “Secondly, money laundering issues with regard to legacy cash to make sure how that is managed properly. [Financial Crimes Enforcement Network] issues and other related issues. And then finally the health and safety issues about what is going to be banked.”

“Take tobacco for example, every state I think has some kind of regulatory parameters around the utilization of tobacco, even if it’s just an age limit on who can purchase it or what have you and the types of products that are going to be allowed,” he continued. “That gets into a legal issue that I think the states need to be more engaged in, but it also impacts the question on what would be banked. Those kinds of issues—health and safety, interstate commerce and money laundering.”

While it’s not exactly clear which language changes Crapo has in mind for the House-passed legislation, his reference to “health and safety issues about what is going to be banked” could refer to certain restrictions on cannabis businesses that want to store their profits in financial institutions, or even requirements that states enact certain policies in order for operators within their jurisdictions to qualify.

In response to another reporter’s question about the spike in vaping-related injuries, the chairman said that’s “a good example of one of the big concerns that I have that we need to address in the bill, which is the health and safety aspects of the use.”

“We are working to revise the bill and develop the support for the bill to move forward,” he said.

Crapo first announced last month that he’d like to take up legislation addressing the issue in his panel before the end of the year and that the reform measure will likely enjoy bipartisan support in the full Senate. However, he’s held off on endorsing the SAFE Banking Act as currently written. His committee held a hearing on banking concerns in the cannabis industry in July.

“We’re working to try to get a bill ready,” the senator perviously told Politico. “I’m looking to see whether we can thread the needle.”

If the Banking Committee does pass legislation protecting banks that service state-legal cannabis businesses from being penalized by federal regulators, it may encounter resistance in the full Senate from some pro-legalization lawmakers such as Senate Minority Leader Chuck Schumer (D-NY) and Sens. Bernie Sanders (I-VT), Cory Booker (D-NJ) and Kamala Harris (D-CA), each of whom have said comprehensive marijuana reform that addresses social equity should be prioritized over legislation that’s viewed as primarily friendly to industry stakeholders.

Crapo also told Marijuana Moment on Thursday that he has not spoken to Majority Leader Mitch McConnell (R-KY) about a low-key trip the top GOP senator took to California last week, during which he met marijuana industry representatives and reportedly toured a cannabis-related business.

McConnell’s buy-in will be key to advancing the cannabis banking legislation to President Trump’s desk if it moves through Crapo’s committee.

Aaron Houston contributed reporting for this story from Washington, D.C.

Presidential Candidate Wants To Let Americans Legalize Marijuana Through National Referendum

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Governors Of Northeastern States Adopt Coordinated Marijuana Legalization Plan

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A group of governors representing states across the Northeast convened on Thursday for a marijuana summit at which they agreed to basic principles for legal cannabis programs they plan to pursue in 2020.

New York Gov. Andrew Cuomo (D) and Connecticut Gov. Ned Lamont (D) organized the meeting. They were joined by New Jersey Gov. Phil Murphy (D) and Pennsylvania Gov. Tom Wolf (D), who came out in favor of legalization last month. Representatives from Massachusetts, Rhode Island and Colorado also attended.

“This is a very important topic,” Cuomo said in his opening statement. “It is probably one of the most challenging issues that I know I’ve had to address in the state of New York. It is complicated, it is controversial and it is consequential. That is a very difficult and challenging combination.”

“It’s consequential because if you do not do it right, you can do harm, and the whole purpose here is to do good,” he said.

The summit is being broken up into five sessions: on vaping and related issues, market regulation and social justice issues, public health consequences of cannabis, public safety issues and a “best practices” panel led by Colorado representatives.

“The point is, this is a challenge for all of us,” Cuomo said. “There is a desire to do this. I believe the people of this state and our surrounding states have a desire to do it. But the old expression the devil is in the details, how you do this makes all the difference. And as I said it can be a positive if done right, it can be a negative if it is not done correctly.”

Lamont, who also talked cannabis with Cuomo during a fishing trip in August and again during a meeting last month, said the current “patchwork quilt” approach that states have taken to marijuana regulations is “unconscionable” and emphasized the need for regional coordination.

“This makes sense: sitting down, working together, working together with New Jersey, working with Pennsylvania and our other neighbors to make sure that what we do, we do it on a standardized basis, we do it on a well-regulated basis with health and safety paramount,” the governor said. “I think we’re much stronger when we work together and that’s what this meeting is all about.”

The governors agreed to determine an ideal tax scheme for marijuana and impose certain limitations on licensing to “ensure a fair and competitive market.” The taxes will also be designed to prevent an increase in consumption.

Importantly, the officials said their systems will include “social equity initiatives to ensure industry access to those who have been disproportionately impacted by the prohibition of cannabis” and to prioritize “small and diverse businesses’ participation in the cannabis industry.”

Another policy calls for the implementation of “meaningful social justice reform with regard to cannabis policy, including expediting expungements or pardons, waiving fees associated with expungements or pardons and securing legislation to support these reforms.”

In terms of public health, the governors were in consensus about imposing restrictions on modes of cannabis consumption and advertising. They said they will prohibit advertising that targets youth and create “strict penalties” for selling marijuana to those under 21. Public education campaigns will also be utilized “ to inform youth and the general public about the health and safety consequences of cannabis use.”

To ensure public safety, the governors said they agreed to have uniform standards for law enforcement trained as drug recognition experts to identify impaired driving. Methods will be developed to target the illicit market and identify “bad actors” in the industry.

Congress should pass a bill allowing banks to service marijuana businesses, they said.

“So long as it remains difficult to open and maintain bank accounts, the state-legal marijuana industry will largely rely on cash to conduct business and operate, which results in public safety issues and creates unique burdens for legal marijuana businesses,” the core principles document says.

The officials also agreed to a set of regulations for vaping products, including a ban or strict regulations on flavored cartridges, preventing the use of adulterants, imposing labeling requirements and increasing enforcement against retailers that sell vaping products to those under 21.

All told, the agreed-upon policies are likely to appeal to reform advocates, as nothing especially controversial made it into the list of principles. There were some concerns that a ban on home cultivation or smokable marijuana products would be included, as Cuomo recently hinted he might push for the latter policy.

“Cooperating as a coalition of states on these issues is the best path forward—as we not only share borders, but we share economic interests, public health priorities, and a joint understanding that the more states that work together on these kinds of issues, the better the policy results will be for our residents,” Lamont said.

Wolf noted that his administration had recently concluded a statewide listening tour to hear from residents about proposals to legalize cannabis and said that based on that input, “we need to bring this into the open.”

“We need regulation, we need to make sure we’re protecting public health, public safety. But that’s regulation, not prohibition,” he said. “It’s also really important that we work together as a region to make sure that we’re on the same page.”

Pennsylvania Lt. Gov. John Fetterman (D), who led the statewide cannabis tour, was also present at the summit.

Murphy emphasized that “doing things in an intelligent, coordinated, harmonious way is good for the entirety of not just our states but our residents.” He added that there are two main issues the leaders must tackle: combating the spike in vaping-related injuries and promoting social justice.

“We’ve got a shocking gap between persons incarcerated in our system along racial lines, and it’s almost entirely due to low-end marijuana offenses,” he said. “Putting aside all of the other factors that come into the cannabis discussion, the social justice, at least in New Jersey, screams out at us and it’s why we’ve come to the table with such passion.”

New Jersey Senate President Steve Sweeney (D) also participated.

“In the absence of federal leadership, Governors are coming together and taking a regional approach to vaping and cannabis regulations,” Rhode Island Gov. Gina Raimondo (D), who did not attend the summit herself, said in a press release. “The principles we’ve agreed to today will allow us to better coordinate our efforts as we address some of the most challenging issues facing our states. Through this partnership, we will work together to protect families from the dangers posed by the illicit cannabis market and vaping.”

Following the opening statements, panels led by experts were invited to testify about their respective cannabis and vaping-related topics for five minutes and then answer questions. While the governors’ opening statements were livestreamed online, the discussion sessions were closed to press.

The list of principles that came out of the summit was released Thursday afternoon.

The governors each represent states where lawmakers have unsuccessfully attempted to legalize marijuana. Efforts stalled in New York following months of negotiation between Cuomo and the legislature, with disagreements centering on issues such as tax rates and how revenue would be earmarked.

Despite several successful committee votes and hearings on legalization legislation in Connecticut, legalization legislation didn’t reach the floor of either chamber.

In New Jersey, bids to legalize cannabis for adult use failed, with lawmakers suggesting they might advance the issue through a referendum for voters to decide on next year.

Pennsylvania lawmakers discussed a legalization bill during a joint Senate and House Democratic Policy Committee in April, but that did not materialize either. However, following the listening tour and with the backing of Wolf, a comprehensive piece of legalization legislation that was introduced on Tuesday is believed to stand a better chance.

This story has been updated to include additional comments and information about legalization principles the governors agreed to.

Pennsylvania Senators File Comprehensive Marijuana Legalization Bill

Photo courtesy of Gov. Andrew Cuomo.

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