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.
#SAFEBanking is a big deal for the thousands of employees, biz & communities who have been forced to deal in piles of cash. Only Congress can provide the certainty financial institutions need to start banking cannabis-related legitimate businesses. It's time to pass #SAFEBanking. https://t.co/ldZRxiMHsm
— Rep. Ed Perlmutter (@RepPerlmutter) September 25, 2019
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.”
Americans across the country are voting to approve some level of marijuana use & we need these marijuana businesses & employees to have access to checking accounts, lines of credit & more. #SAFEBanking will improve transparency & reduce the public safety risk in our communities.
— Rep. Ed Perlmutter (@RepPerlmutter) September 25, 2019
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.
The #MOREAct would legalize #marijuana, require resentencing & expungement for old marijuana convictions, & invest money in communities most affected by the failed War on Drugs. This is real reform. I’m pleased @HouseJudiciary will be considering this bill. #LegalizeIt https://t.co/szWiRdX2yz
— Steve Cohen (@RepCohen) September 25, 2019
“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.”
Only Congress can provide the certainty financial institutions need to start banking cannabis-related legitimate businesses.
I'm proud to support the #SAFEBanking Act today to support hard-working Coloradans and their families.
— Rep. Joe Neguse (@RepJoeNeguse) September 25, 2019
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.
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 #SafeBankingAct & will be voting for it today. https://t.co/zoiKwvUkG0
— Rep. Deb Haaland (@RepDebHaaland) September 25, 2019
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.
— Rep. Ed Perlmutter (@RepPerlmutter) September 25, 2019
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.
It’s clear #SAFEBankingAct will pass House mainly bc of support for issues added to the bill at the last minute— like repeal of Operation Chokepoint, an initiative by Obama’s DOJ to investigate banks who do business w firearms dealers
Moms and Dads are watching #PotVapingCrisis
— Kevin Sabet (@KevinSabet) September 25, 2019
“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.”
Full statement available here: https://t.co/cA1VG2wHMm
— SAM (@learnaboutsam) September 25, 2019
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.
Image element courtesy of Tim Evanson.
Federal Court Dismisses Suit Against DEA Over Marijuana Growing Applications
A federal court dismissed a lawsuit against the Drug Enforcement Administration (DEA) on Friday after determining that the agency had fulfilled a requirement to process applications for research-grade marijuana manufacturers.
DEA was sued in June after declining to act on the more than two dozen applications that it received for approval to cultivate cannabis for research purposes. It’s been more than three years since the agency first announced it was opening the process to consider additional producers.
The suit, brought by the Scottsdale Research Institute (SRI), argued that the marijuana grown at the University of Mississippi—currently the only facility that’s federally authorized to cultivate the plant—is of poor quality, does not reflect the diversity of products available on the commercial market and is therefore inadequate for clinical studies.
Indeed, that’s 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.
In July, the U.S. Court of Appeals for the District of Columbia Circuit ordered DEA to respond to the legal challenge within 30 days—and as that deadline approached in August, the agency published a notice in the Federal Register stating that it was taking steps to approve the pending applications.
Due to the volume of the applications, DEA said it would have to develop alternative rules to process them. And on Friday the court said that DEA had fulfilled its obligations and that the suit “is now moot.” While no applications have been approved to date, there’s a public comment period that will last until October 28 and then the agency will have an additional 90 days to take action on the inquiries.
“The Court dismissed our case because, according to the Court, DEA gave us the relief we had requested,” attorney Matt Zorn, who was involved in the suit, told Marijuana Moment. “Last week, on October 11, DEA published a correction to the notice it had previously published on August 26, two days before it had to respond to the Court’s order. The Court said this second notice meant there was nothing more the Court could give us.”
“The Court also declined to maintain jurisdiction over the case, because it did not find a history of chronic delay or bad faith in the record,” Zorn said. “But it also indicated that we could return to court if DEA significantly delays going forward.”
Sue Sisley, a researcher with SRI, said that despite the case being dismissed, it “moved the ball forward for everyone.”
“We would have liked to take the case one step further to ensure that all 33 applications are processed promptly—protecting the health and welfare of our nation’s medically ill patients ought to be a national priority for this administration,” she said. “By delaying these 33 applications, the administration has prevented our US scientists from investigating the clinical efficacy of real-world cannabis to treat combat veterans with PTSD. Fortunately, the Court’s order today allows us to return to court for additional relief if Trump’s DOJ/DEA continues to violate the law and put public health at risk through delay or otherwise.”
In a separate case in May, another federal court ordered DEA to “promptly” consider applications to reschedule cannabis under the Controlled Substances Act.
Read the appeals court’s ruling on the DEA marijuana application case below:
Former VA Secretary Who Oversaw Marijuana Research Blockade Now Backs Cannabis Studies For Veterans
Former U.S. Department of Veterans Affairs (VA) Secretary David Shulkin is officially on board with having the department research medical marijuana—a development that comes a year after he was in a position to actually make that happen.
In an interview with Task & Purpose that was published on Thursday, Shulkin said that “the time is now” for VA to facilitate studies into the therapeutic potential of cannabis for veterans.
“I believe that the VA should be involved in research on anything that could potentially help veterans and improve their health and well-being,” he said.
That appears to represent a notable departure from the position he held while he headed the department.
For example, VA under his leadership refused to provide assistance to an Arizona-based research facility that was soliciting veterans to participate in a federally approved clinical trial looking at the potential benefits of cannabis in the treatment of post-traumatic stress disorder (PTSD).
“Federal law restricts VA’s ability to conduct research involving medical marijuana, or to refer veterans to such research projects,” a VA official told Air Force Times in 2017. “The researcher is free to work with veterans service organizations and state veterans officials who may not face such restrictions to identify candidates for her study.”
But according to the Brookings Institute, that’s not an accurate assessment because “doctors and researchers at the VA or in VA hospitals could conduct research into the medical efficacy of marijuana while remaining completely compliant with federal laws, regulations, and the United States’ obligations under international agreements.”
While the former secretary still said during this latest interview that congressional action is necessary to prompt VA research efforts, he seems to have become decidedly more vocal about the importance of such studies as compared to his time in office.
“In particular, with the VA’s focus on suicide as the top priority, people just don’t take their lives because of no reason,” he said. “They take their lives, often because of issues related to chronic pain, depression, substance abuse, and there is growing evidence that medical marijuana—I’m not talking about recreational marijuana—but properly prescribed, may have some real benefits in anxiety improvement, in pain management, and potentially, in the issue of substance abuse.”
“And therefore, I believe it’s extremely appropriate for VA to be researching and developing therapies that can help veterans, particularly in areas where we don’t have enough good therapies or answers,” he said.
Task & Purpose followed up to ask about potential obstacles such to having VA conduct research into the issue, and Shulkin said that because marijuana is a federally controlled substance, “the challenge of doing research with the regulations, and the hoops that you have to go through, are making it too difficult to do for many of the researchers.”
“I do think that the way forward is a legislative solution, much of what VA responds to are changes in the law, where medical research for veterans in this area could be streamlined and clarity around what regulations and rules need to be followed to be able to do this research, as well as guidance about the type of research that can and should be done, which reports back to Congress.”
He added that he doesn’t anticipate that President Trump would resist legislation empowering VA to study marijuana for veterans.
Brad Burge, director of strategic communication at the Multidisciplinary Association for Psychedelic Studies (MAPS), the group behind the study into cannabis for PTSD, told Marijuana Moment that they are “pleased that Shulkin has now expressed his support for medical marijuana research, even though that support would have been much more valuable when he was still in office.”
“Nevertheless we are looking forward to the VA’s support of marijuana research and see Shulkin’s change of stance as a promising sign for veterans suffering from PTSD,” Burge said.
It wasn’t just that Shulkin’s VA put up roadblocks to cannabis research, he also resisted providing veterans with access to marijuana by declining to change internal VA policy that could empower its doctors to issue recommendations in states where it’s legal.
The reasoning, he said in 2017, is that it’s “not within our legal scope to study that in formal research programs or to prescribe medical marijuana, even in states where it’s legal” because of federal law. But advocates argued that the only thing standing in the way of VA cannabis research is VA policy itself, which Shulkin could have amended.
Getting a VA cannabis reform bill passed as the former official is now recommending has already proved difficult this year, with current VA officials voicing opposition during a congressional committee hearing in June to modest proposals such as allowing their doctors to recommend cannabis or even surveying veterans about their marijuana use.
Rep. Earl Blumenauer (D-OR) said that same month that he pulled an appropriations amendment to allow for VA marijuana recommendations from floor consideration partly because of opposition from the department.
Mexican Committees Unveil Marijuana Legalization Bill Ahead Of Supreme Court Deadline
Several Mexican Senate committees unveiled draft legislation late on Thursday to legalize marijuana.
Leaders of the Health, Justice, Public Security and Legislative Studies Committees announced last week that they would remain in permanent session to finalize the legalization bill ahead of a coming Supreme Court deadline.
The court determined last year that the country’s ban on personal cannabis consumption and cultivation is unconstitutional, though lawmakers now want to go even further by legalizing commercial production and sales.
The committees are expected to formally vote on the legislation in the coming days, after which point it will head to the full Senate and then the Chamber of Deputies. Leaders said a vote in the legislature could occur before the end of the month, though it’s possible they could ask the Supreme Court for a deadline extension.
Ayer, antes de medianoche, fue entregado a los senadores de las comisiones de Justicia, Salud, Estudios Legislativos, Segunda y Seguridad Pública el predictamen📃🌿 de la ‘Ley para la regulación de la cannabis’. Está conformado por 74 artículos y once transitorios. pic.twitter.com/8IKOF7pA1i
— Cáñamo México (@canamo_mexico) October 18, 2019
Here are some of the key provisions, according to a translation:
—Adults 18 and older can possess cannabis for personal use, cultivate up to four plants and purchase marijuana from licensed retailers.
—An independent body called the “Cannabis Institute” would be charged with issuing licenses, setting potency limits and monitoring the implementation of the law, among other responsibilities.
—Low-income individuals, small farmers and indigenous people would have licensing priority.
—Strict restrictions would be imposed on cannabis packaging. That includes requiring nondescript, standardized containers that do not feature depictions of real or fictional people or testimonials.
—Marijuana can only be consumed in private spaces.
—Only medical cannabis patients would be allowed to purchase infused edibles and beverages.
—Unregistered seeds or plants would be subject to forfeiture.
—No pesticides could be used on cannabis plants.
The bill seeks to “improve the living conditions of people living in the United Mexican States, combat the consequences of the problematic use of cannabis and reduce the crime incidence linked to drug trafficking [while] promoting peace, the security and well-being of individuals and communities,” according to the text.
Sen. Julio Menchaca Salazar, head of the Justice Committee, said in a tweet that “we are legislating to regulate the illicit market of the #marihuana and decrease the crime incidence linked to the #narcotráfico, promoting peace and security for all Mexicans.”
— Julio Menchaca S. (@Julio_Menchaca) October 18, 2019
Lawmakers have said that the legislation is largely based on a proposal that Interior Secretary Olga Sánchez Cordero filed last year while still serving as a senator, but the committees are also merging in provisions from among more than a dozen other marijuana reform bills that since have been introduced.
“They all have something good that we can be translating into law,” Menchaca Salazar, who is a member of the ruling MORENA party, said.
Debate on the measure will also be informed by findings from a series of events the Senate organized to gather public input on marijuana legalization. That includes a panel led by a former White House drug czar, who stressed the need for “robust regulations” of a legal cannabis market.
The leader of the MORENA party in the Senate, Sen. Ricardo Monreal, said earlier this month that the chamber was set to vote on a legalization bill ahead of the October 24 deadline.
“It will undoubtedly be a great discussion with the elements we have and also with all the willingness to incorporate the opinions of legislators, but it would come out this month, there are the conditions for that to be,” Menchaca Salazar said.
Read the full text of the Mexican committees’ marijuana legalization proposal below:
This story is developing and will be updated.