An Illinois lawmaker filed a bill last week that would increase marijuana businesses’ access to some basic banking services.
While a growing number of financial institutions have begun accepting cannabis-related clients, many more remain wary of working with the industry while the plant remains federally illegal. But now, state Rep. Kambium Buckner (D) has introduced legislation that would create a process to license banks and credit unions that would be able to accept and issue “special purpose checks” specifically for marijuana business operations.
It would prove especially timely, as Illinois’s governor signed a comprehensive marijuana legalization bill in June, and the program is set to go into effect on January 1, 2020.
The legislation wouldn’t fix the federal banking dilemma, but it’s designed to help mitigate the unique risks that cannabis firms face when they’re forced to operate on a largely cash-only basis by giving licensed institutions the ability to accept the specialized, alternative payment methods.
A Cannabis Banking and Credit Union Advisory Board would be responsible for issuing the licenses under the proposal.
According to the bill’s text, the board would be tasked with providing “a safe and efficient way to pay State and local taxes and fees, to pay rent associated with the account holder’s cannabis business, to issue special purpose checks, and to legally invest in this State’s economy, while reducing the burdens placed on local government that result from collecting and managing large sums of cash.”
Individuals or entities that obtain a “cannabis limited charter bank or credit union” license would still have to adhere to the federal Bank Secrecy Act and comply with Financial Crimes Enforcement Network reporting guidelines.
The special purpose checks that these institutions would issue and accept could only be used for specific purposes that are laid out in the measure, for example remitting state and local taxes, paying rent and issuing bonds or warrants. State and local governments would be explicitly allowed to accept these checks.
Marijuana limited charter banks or credit unions could enter into agreements with each other to form a network, and they wouldn’t be limited to providing financial services to cannabis businesses alone.
The legislative development comes as Congress continues to debate bipartisan legislation that would protect banks in all legal states from being penalized by federal regulators for servicing marijuana businesses . The Secure and Fair Enforcement (SAFE) Banking Act, which cleared the House in September, is expected to get a Senate Banking Committee vote before the year’s end.
The panel’s chairman, Sen. Mike Crapo (R-ID), told Marijuana Moment in an interview last week that he’s interested in holding a committee vote soon, but he also expressed concern that the House impeachment inquiry threatens to delay all legislative efforts that are underway.
Idaho Senator Files Bill To Decriminalize Drug Possession
A new bill filed by an Idaho senator would decriminalize possession of currently illegal drugs in the state, though it also contains a provision that advocates consider troubling, allowing the government to involuntarily commit people convicted of certain offenses to treatment.
Sen. Grant Burgoyne (D) introduced the legislation, which would remove criminal penalties for drug use and possession by “requiring intention to deliver for criminal trafficking.”
Burgoyne told Marijuana Moment the bill has been referred to the Judiciary and Rules Committee, where Chairman Todd Lakey (R) has agreed to hold a hearing on it.
“We have too much of a focus on prosecution and punishment and not enough on treatment,” Burgoyne said in a separate interview with KTVB. “We don’t have a functioning mental health treatment and substance abuse treatment capability for the needs of our people. We need new strategies, how we draw the lines between what is criminal conduct and what is not criminal conduct when it comes to drug possession and usage.”
The bill sets different possession thresholds for different drugs. Having just two grams of heroin could be considered trafficking, while for cocaine and methamphetamine, the amount is set at 28 grams. One pound of marijuana, or 25 plants, could be treated as a trafficking offense.
Any amount of LSD could be considered a trafficking offense, as could any amount of a “simulated controlled substance,” possibly referring to synthetic opioids like fentanyl. Using drugs with friends would also be harshly penalized, as “sharing or providing a controlled substance for use by another person shall constitute intent to deliver.”
“This will reduce arrests, but how much is very hard to predict,” Burgoyne told Marijuana Moment. “Unfortunately, illegal drug use, even in private, is too often accompanied by the commission of other crimes, which my bill does not excuse and which could lead to arrest.”
Burgoyne’s bill would also allow people using drugs to be “placed in protective custody” or “admitted for community-assisted behavioral health treatment.” This would apply to people under the influence and in various circumstances, such as being pregnant, posing a risk to themselves or others or in withdrawal.
But existing research on mandatory drug treatment suggests it is not helpful for people with substance use disorder. A 2016 study published in the British Medical Journal, for example, found that when people are ordered to undergo drug treatment without their informed consent, the practice does more harm than good and does not reduce their drug use. The researchers explained that harm reduction efforts like syringe exchanges and drug education were more effective.
“Although there is some theoretical danger of adverse consequences to mandated drug treatment, we already mandate it for prisoners with drug issues,” Burgoyne said. “I’d like to shift treatment out of our jails and prisons to a more appropriate place. Furthermore, a civil commitment is not an easy thing to obtain, and I think our courts will be conservative in how they handle them.”
If the senator’s legislation passes, it remains to be seen what effect it would have on drug arrest rates in Idaho. According to the FBI, in 2017 Idaho had 8,432 arrests for “drug abuse violations,” which is a little over 16 percent of all arrests that year.
Burgoyne’s reform proposal comes amid a growing national debate about the value of decriminalizing drug use over more arrests. Last year in May, Denver became the first city in the U.S. to decriminalize personal use and possession of psilocybin mushrooms. Oakland’s City Council followed the next month by decriminalizing a wide range of psychedelics.
Advocates are also raising the issue on the national stage. Rep. Alexandria Ocasio-Cortez (D-NY) proposed decriminalizing drug consumption in November. Former South Bend, Indiana Mayor Pete Buttigieg, a 2020 Democratic presidential candidate, has proposed decriminalizing drug possession and reducing sentences. His primary opponent, Rep. Tulsi Gabbard (D-HI), recently called for legalizing and regulating drugs in order to treat substance misuse as a public health issue.
Photo coutersy of Markus Spiske.
U.S. Virgin Islands Governor Pushes For Marijuana Legalization In Annual Speech
The governor of the U.S. Virgin Islands (USVI) repeated his call for marijuana legalization in his annual State of the Territory address.
Gov. Albert Bryan Jr. (D), who called the legislature into a special session last month to begin taking up cannabis reform legislation, stressed that establishing a commercial marijuana market would bring in needed tax revenue to support a variety of government programs.
The proposed amendment to the territory’s existing medical cannabis law, which Bryan signed last year, would allow adults 21 and older to obtain a license from the government in order to purchase and cultivate marijuana. It would also promote participation in the industry by small farmers and local businesses, as well as providing for automatic expungements of prior cannabis convictions.
“Most importantly, it creates a taxing regime for the local industry that will generate higher revenues than the current law allows,” he said in the speech last Monday, noting that tax revenue will be distributed between the Government Employees Retirement System (GERS) fund (75 percent), implementation of regulations (20 percent) and services for senior citizens (5 percent).
“The revenues generated from this industry can benefit the system as a direct contribution,” the governor said. “However, the goal is to create a funding stream that is reliable enough to ultimately support a revenue bond that can provide a needed cash infusion to the system.”
Watch Bryan’s marijuana comments, first reported by Vibe High, about 36:24 into the video below:
“This is by no means the panacea or final solution for the GERS crisis, but a small part of a larger solution,” he continued. “It begins the process of generating the new revenues required to stave off the insolvency of the System. It takes existing policy, approved by this body, and leverages it to support this critical area of need.”
“We must acknowledge the opportunities that regulated expansion of this industry can bring to the territory and the potential benefits to the GERS,” he said. “I urge this body to take the necessary action to approve the amending legislation we have proposed.”
Bryan’s proposal calls for a 30 percent tax on marijuana sales, with revenue expected to be upwards of $20 million annually. His administration is also expecting the policy change to stimulate tourism, and visitors interested in participating in the market would be charged a $10 per day fee to access legal cannabis.
This year has seen several governors voice support for marijuana reform during their high-profile annual addresses and in legislative agendas. New York Gov. Andrew Cuomo (D) reaffirmed his commitment to legalization in his State of the State speech and Virginia Gov. Ralph Northam (D) pledged to pursue decriminalization, for example.
In New Mexico, the governor included legalization in her 2020 agenda, and lawmakers followed suit by filing a cannabis reform bill on Thursday. Rhode Island Gov. Gina Raimondo (D) proposed legalizing marijuana through a state-run model in a budget proposal released on Thursday.
Photo courtesy of Nicholas C. Morton.
Tulsi Gabbard Endorses Legalizing Drugs
Rep. Tulsi Gabbard (D-HI) is calling for the U.S. to legalize currently illicit drugs.
“If we take that step to legalize and regulate, then we’re no longer treating people who are struggling with substance addiction and abuse as criminals and instead getting them the help that they need,” the 2020 presidential candidate said at a campaign stop in Merrimack, New Hampshire on Friday.
(Marijuana Moment’s editor provides some content to Forbes via a temporary exclusive publishing license arrangement.)
Photo element courtesy of Lorie Shaull.