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.
Vermont Governor Happy With Process On Marijuana Sales Legalization Bill Expected On His Desk Next Week
The governor of Vermont said on Friday that he is impressed with how lawmakers approached negotiations over a marijuana sales legalization bill that will likely be sent to his desk next week, though he stopped short of committing to sign it.
Vermont legalized possession of up to one ounce of cannabis and cultivation of two plants in 2018, but there are currently no regulations in place that allow for retail sales. Both chambers of the legislature previously approved the new commercialization bill, S. 54, and a bicameral conference committee worked to hash out differences in recent weeks. And shortly after they finalized a compromise version, it was sent to the House floor, where it was approved on Thursday.
The Senate is expected to take up the final measure next week. If approved there, the bill will head to the desk of Gov. Phil Scott (R).
The governor was asked during a press briefing whether he felt the legislation contains adequate public safety provisions that he’s requested.
“The bill hasn’t been my top priority. [It’s] obviously a priority for the legislature and legislative leadership,” he said. “And so it’s been passed [by the House]. I will give great credit to those who I don’t believe had any thoughts of me and some of my concerns, but they’ve done so. They’ve moved forward.”
He drew a contrast to a climate change bill that he indicated was not thoughtfully constructed to take his input into account and which he vetoed.
“I reflect on the Global Warming Solutions Act and the difference between the two bills, and them addressing the concerns I had with the regulation of marijuana—regulation and taxation bill—versus the Global Warming Solutions Act. It’s a stark difference,” he said.
Watch the governor discuss the marijuana tax-and-regulate bill, starting around 1:13:05 into the audio below:
Scott said he was encouraged by how the conference committee navigated the marijuana bill and reached compromises.
“They created a panel, and maybe advocated some of their position there, but it’s coming back,” he said, referring to a new cannabis regulatory body that would be created by the legislation. “Any suggestions by the marijuana panel that they put into their bill is going to come back to the legislature, and they’re going to vote on it, and they’re going to consider that. I mean, that’s the way to do things.”
“They’ve come a long ways. I’ll be considering that over the next—when we do receive the bill, we haven’t received it yet. But I’ll consider that,” Scott said. “And again, they’ve come a long ways and we’ll see what happens.”
It’s been an open question whether the governor will ultimately sign off on the tax-and-regulate bill given that he vetoed an early version of a non-commercial marijuana legalization bill. He reluctantly approved a revised version after legislators agreed to include a number of provisions he requested.
An outstanding concern for Scott in this latest bill is how to mitigate the risk of impaired driving. He wants police to be able to conduct roadside saliva tests for THC—despite the shaky science about its efficacy and civil rights concerns. In conference, the panel compromised on allowing saliva testing, but officers would have to get a warrant and the tests couldn’t be conducted at roadside.
“I’ve never been philosophically opposed to a retail market, I just have concerns about that,” the governor told WCAX in a separate new interview. If marijuana sales are legalized, Scott said it will be important to “make sure we’re doing this the right way with our eyes wide open and that we’re protecting the citizens of Vermont.”
Meanwhile, Lt. Gov. David Zuckerman (D), who is running against the incumbent governor, has been a strong advocate for establishing a regulated cannabis market in the state. He told the local news outlet that the “hybrid” compromise on saliva testing “doesn’t cross the line for me,” despite his general reservations about the practice.
Under the proposed cannabis sales bill, marijuana would be subject to a 14 percent excise tax, in addition to the state’s six percent sales tax.
S. 54 also contains some social equity provisions such as prioritizing marijuana business licenses for minorities, women and people disproportionately impacted by the war on drugs. An independent regulatory commission would additionally be tasked with promoting small business participation in the market.
A new Cannabis Control Commission would be responsible for issuing licenses for retailers, growers, manufacturers, wholesalers and labs. The body would also take over regulation of the state’s existing medical cannabis industry from the Department of Public Safety .
A 30 percent THC limit would be imposed on cannabis flower, while oils could contain up to 60 percent THC. Flavored vape cartridges would be banned.
Local jurisdictions would have to proactively opt in to allow marijuana businesses to operate in their area. Municipalities would also be able to establish their own regulations and municipal licensing requirements.
A timeline for the legislation states that it would formally take effect on October 1, 2020—but regulators would then have to make a series of determinations about rules and licensing before retail sales would launch. Dispensary licenses would have to be issued on or before October 1, 2022.
A fiscal analysis on the final bill projects that Vermont will generate between $13.3 million and $24.2 million in annual cannabis tax revenue by Fiscal Year 2025. Licensing fees will lead to additional funds for the state, but the regulatory board created by the legislation will set those levels at a later date. For now, the Joint Fiscal Office estimates the fees could lead to another $650,000 in revenue every year. Municipalities hosting marijuana businesses will also be able to levy additional local fees.
Previously, Scott expressed interest in using new cannabis tax revenues to fund an after-school program he’s pursuing.
Outside of the cannabis sales legalization bill, the House approved separate legislation this month that would provide for automatic expungements of marijuana convictions and allow people to possess and grow more cannabis without the threat of jail time than is currently allowed. The Senate could give approval to the latest version next week, setting it up to also head to Scott’s desk.
Photo courtesy of WeedPornDaily.
Hemp Farmers Now Eligible For USDA Coronavirus Relief Program
The U.S. Department of Agriculture (USDA) announced on Friday that it is expanding its coronavirus relief program for farmers—and this time around, hemp cultivators are eligible for benefits.
In May, USDA said it would be making $19 billion available for agriculture producers to assist them amid the pandemic. But it excluded hemp and several other crops, stating that they don’t qualify because they didn’t experience a five percent or greater price decline from January to April. Industry stakeholders contested that point, arguing that there’s insufficient data to establish that given how young the newly legal market is. They said they were suffering just like other sectors.
It seems the department got that message and chose to accommodate the industry. A new round of funding through USDA’s Coronavirus Food Assistance Program (CFAP) includes a payment category for “flat-rate crops” that lists hemp as eligible.
“Crops that either do not meet the 5-percent price decline trigger or do not have data available to calculate a price change will have payments calculated based on eligible 2020 acres multiplied by $15 per acre,” USDA said in a notice. “These crops include alfalfa, extra long staple (ELS) cotton, oats, peanuts, rice, hemp, millet, mustard, safflower, sesame, triticale, rapeseed, and several others.”
Jonathan Miller, general counsel at the U.S. Hemp Roundtable, told Marijuana Moment that the group is “thrilled” to see USDA take this step, though some stakeholders are saying that the calculation the department is using to determine benefits under the program “might not be as generous as for some other crops.”
“This is a very significant development for the industry,” he said. “We just want to be sure that our farmers are treated fairly just like other farmers.”
The office of Senate Majority Leader Mitch McConnell (R-KY), who has championed the industry and helped advance the crop’s legalization, highlighted the policy change.
#Kentucky #hemp & tobacco farmers are now able to receive aid from @SenateMajLdr McConnell’s #CARESAct. Starting Monday, growers can apply for relief at their local @usdafsa office. Thanks to @realDonaldTrump & @SecretarySonny for looking out for farmers.https://t.co/3XzFIpXpSz
— Senator McConnell Press (@McConnellPress) September 18, 2020
The Virginia Department of Agriculture also touted the news.
— VDACS (@VaAgriculture) September 18, 2020
In April, Congress approved a COVID-19 package that made hemp businesses eligible for federal disaster relief through the Small Business Administration (SBA).
For the past two years since hemp was federally legalized through the 2018 Farm Bill, USDA has been hard at work developing regulations and reaching out to the industry to ensure that the market has the resources to thrive.
This month, for example, it reopened a 30-day public comment period on its proposed rules for the crop in order to gain additional feedback on a number of provisions that stakeholders had expressed concern about. SBA recently asked USDA to extend that comment window. The department’s rule for hemp, when finalized, is set to take effect on October 31, 2021.
In July, two senators representing Oregon sent a letter to Perdue, expressing concern that hemp testing requirements that were temporarily lifted will be reinstated in the agency’s final rule. They made a series of requests for policy changes.
Sen. Cory Gardner (R-CO) called on USDA to delay the implementation of proposed hemp rules, citing concerns about certain restrictive policies the federal agency has put forward in the interim proposal.
Senate Minority Leader Chuck Schumer (D-NY) last month wrote to Perdue, similarly asking that USDA delay issuing final regulations for the crop until 2022 and allow states to continue operating under the 2014 Farm Bill hemp pilot program in the meantime.
As it stands, the earlier pilot program is set to expire on October 31. The senators aren’t alone in requesting an extension, as state agriculture departments and a major hemp industry group made a similar request to both Congress and USDA last month.
Perdue has said on several occasions that DEA influenced certain rules, adding that the narcotics agency wasn’t pleased with the overall legalization of hemp.
As all of this rulemaking continues, USDA has been systematically approving hemp plans from states and tribes. Utah is the latest state to have its proposal approved.
Photo courtesy of Brendan Cleak.
Majority Of Republicans Support Marijuana Legalization Bill That Democrats In Congress Delayed Vote On
A majority of U.S. voters across party lines support the passage of a comprehensive federal marijuana legalization bill that was expected to receive a House floor vote before being postponed on Thursday, according to a new poll.
The survey found that 59 percent of Americans—including 53 percent of Republicans and 70 percent of Democrats—favor the Marijuana Opportunity, Reinvestment and Expungement (MORE) Act, which would federally deschedule cannabis and promote social equity.
Despite that bipartisan support, certain moderate Democratic lawmakers convinced House leadership that holding a vote on the bill next week, as was initially expected, could damage them politically heading into the election. They felt that advancing the reform legislation before passing another coronavirus relief bill looked bad for them—a position that advocates say is nonsensical given the widespread popularity of the issue.
This is the second time Data for Progress and the Justice Collaborative Institute asked Americans about drug policy reform and the MORE Act specifically. Their last poll, which was conducted in May, showed that 62 percent of respondents backed the bill. Support also transcended party lines in the earlier survey, with 60 percent of Republicans and 74 percent of Democrats agreeing it should be passed.
“The decision to push back a vote on the MORE Act not only calls Democrats’ prioritization of racial and criminal justice into question, but it also shows a complete disregard for the will of the majority of the American people who are ready for reform,” the Justice Collaborative said in a press release. “Failing to pass legislation decriminalizing marijuana use could be an electoral risk come November.”
While the House won’t take up the MORE Act next week as initially anticipated, leadership has given the bill’s supporters an “ironclad commitment” that it will get a floor vote in the fall, according to Reps. Earl Blumenauer (D-OR) and Barbara Lee (D-CA). That will likely take place after the election.
House Majority Leader Steny Hoyer (D-MD) said that “the MORE Act remains a critical component of House Democrats’ plan for addressing systemic racism and advancing criminal justice reform, and we are committed to bringing it to the Floor for a vote before the end of the year.”
The new poll—which involved interviews with 1,212 likely voters from September 11-14—also looked at support for more broad drug policy issues. For example, 60 percent said that “we should treat drug use as a public health issue and not a criminal justice issue.”
Sixty-seven percent of voters said the federal government should respect the rights of states to set their own marijuana policies. That support was also bipartisan, with 63 percent of Republicans and 73 percent of Democrats agreeing with the sentiment.
A majority of voters said police shouldn’t be arresting people for possessing cannabis for personal use (59 percent) or selling small quantities of marijuana (55 percent).
Finally, the poll asked people whether they feel that “legalized marijuana has become too corporate and it is only benefiting wealthy investors.” Half said they did feel that way, 26 percent said they disagreed and 23 percent said they didn’t know.
Interestingly, Republicans were more likely to say the industry is being corporatized (57 percent) than Democrats (48 percent).
The survey findings underscore the evolving political reality of drug policy reform: it’s popular with most Americans and it’s increasingly bipartisan. But it also reveals the splintering between public sentiment and congressional action, as evidenced in part by the MORE Act vote postponement. That select centrist Democratic members felt the optics of passing the popular bill would derail their reelection campaigns seems to highlight the disconnect.
Photo courtesy of Brian Shamblen.