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

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Marijuana industry excitement over Wednesday’s House vote on cannabis banking legislation is palpable. But as the bill approaches the floor, some advocates are feeling burned by a key committee chair who they say made a deal to take up comprehensive reform before passing a proposal viewed as primarily favorable to large marijuana businesses.

In February, House Financial Services Chair Maxine Waters (D-CA) apparently made the agreement with several leading advocacy groups including the Drug Policy Alliance (DPA), ACLU and the Center for American Progress. So when Majority Leader Steny Hoyer (D-MD) announced earlier this month that he intended for the House to vote on the Secure and Fair Enforcement (SAFE) Banking Act by the end of September, it ignited debate within advocacy circles.

A number of advocacy organizations wrote a letter to House leadership urging a delay on the banking vote until broader legislation that addressed social equity issues passed. They didn’t get their wish, though, as Hoyer later confirmed a vote would take place on Wednesday.

During their first meeting with Waters and Financial Services Committee leadership in February, the groups “brought up our strategic concerns about the way the banking bill hitting the floor first could potentially take air out of the room for broader and more comprehensive reform, really emphasizing all the points we’ve been continually talking about,” Queen Adesuyi, policy coordinator with DPA, told Marijuana Moment.

“The banking bill doesn’t actually address the crux of the issue when it comes to prohibition and how it’s impacted individuals and communities,” she said. “They made it seem like they were in alignment with our concerns and recognized them and acknowledged them.”

Waters, who chairs the House Financial Services Committee, told Marijuana Moment in an interview last week that she appreciates the concerns expressed in the letter requesting a delay of the floor vote, but she said the problem is a lack of action on the part of Judiciary Chairman Jerrold Nadler (D-NY), who has yet to put his more wide-ranging legalization bill to a vote in his panel in preparation of potential action by the full body.

“And so what’s going to happen is [the SAFE Banking Act] that gives safe harbor to the banks is going to move, and whenever Judiciary gets that bill done, then it’s going to move too with the same kind of support that [the banking] bill is going to get,” she said.

But as Adesuyi described it, ensuring that Nadler’s bill received a vote before the banking legislation was explicitly part of the groups’ verbal agreement with Waters’s office.

“If the deal was upheld and the MORE Act moved first and the banking bill moved second, we wouldn’t be in this position.”

Prior to the August congressional recess, rumors began circulating that the SAFE Banking Act would soon be scheduled for a vote, and the advocacy groups arranged a follow-up meeting.

“We met again with [staff for] Chairwoman Waters and Financial Services leadership, asking ‘what’s the deal’ and they reiterated the fact that the deal was still on the table and they still were abiding by it and the MORE Act would still go first,” Adesuyi said. “There was a reiterating of alignment with our concerns and alignment with our perspective around needing more comprehensive reform rather than a piecemeal reform.”

“We were struck and disappointed to see within the first two weeks of them coming back from recess hearing that the banking bill was being scheduled for a vote,” she said. “Chairwoman Waters went back on her word, and Financial Services went back on their word. That’s essentially what happened.”

Representatives from Waters’s office did not respond to Marijuana Moment’s request for comment on the agreement advocates described by the time of publication, but late on Tuesday night the chairwoman released a statement saying she is “pleased” that the banking bill will be on the floor and that it is “one important piece of what should be a comprehensive series of cannabis reform bills.”

“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,” she said. “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.”

Lawmakers And Groups Weigh In On Eve Of Historic Cannabis Vote

In recent weeks, industry stakeholders, advocates and lawmakers have voiced a wide range of perspectives on the best way to approach banking reform for the cannabis industry.

In an interview with Marijuana Moment on Tuesday, Rep. Ilhan Omar (D-MN) said that while she’s in favor of broad, all-encompassing marijuana legislation, there are political realities that ought to be considered, stating that “we’ve become desensitized in terms to how challenging this process of moving policy is.”

“Oftentimes it is easy for people to believe if one thing happens, something else won’t happen,” she said. “And the idea that we could have it all is really fading for many people who are pushing for progress in this country.”

Omar’s message to groups opposed to allowing the banking vote to proceed first is “to believe that it is possible that we could get all of these policies implemented, that we don’t have to forego a particular idea or policy implementation because something else is more pressing or more important.”

She added that she will be a “yes” vote on the banking bill—which will be the first standalone piece of cannabis reform legislation in history to receive a full House floor vote—and that she’s “for all of it” in terms of broader marijuana reform.

Judiciary Committee Chairman Jerrold Nadler (D-NY) said in a statement on Tuesday that he would vote for the banking bill and further committed to schedule a vote in his panel on more far-reaching marijuana reform legislation.

Waters said in her statement that she wants that done “as quickly as possible.”

“The sooner the better,” she said.

While drug policy reform advocates broadly share the sentiment that there’s a need for legalization legislation that seeks to resolve the injustices of the war on drugs, with disagreements mostly coming down to timing, financial associations have been unambiguously focused on passing the SAFE Banking Act as soon as possible.

That’s been true from the onset: 50 state banking associations, the National Association of State Treasurers, the top financial regulators of 25 states have all voiced support for the bill’s passage throughout the year.

And on Tuesday, the American Bankers Association (ABA) sent a letter to the leaders on Tuesday that described the legislation as “an important measure that helps clarify many issues for the banking industry, regulators, businesses and consumers.”

“It also provides immediate relief for urgent public safety and cannabis industry oversight challenges, which will help keep our communities safe and should not be delayed while Congress works to build consensus on broader questions of national drug policy,” ABA said.

ABA, Americans for Prosperity, Council of Insurance Agents and Brokers, Electronic Transactions Association, National Association of Mutual Insurance Companies, National Association of Professional Employer Associations, National Association of REALTORS and Wholesale & Specialty Insurance Association also sent a separate letter to House leaders calling on Congress to advance the legislation.

“A safe harbor would not only enable law enforcement and states to effectively monitor and regulate cannabis transactions and businesses, but it would bring billions of dollars and tax revenue out of duffel bags and safes and into the regulated banking sector,” the groups wrote.

“We understand that creating a true federal regulatory framework for cannabis is a multi-step process,” they said. “However, we strongly believe that the SAFE Banking Act is a critical first step to ensure that legal cannabis marketplaces are safe, legal, and transparent.”

Marijuana-focused groups that want to see a vote argue that besides serving as a first step on the path to comprehensive legalization, the banking bill does address social equity to an extent by opening up opportunities to credit and financial services that disadvantaged groups have been shut out of.

National Cannabis Industry Association (NCIA) Executive Director Aaron Smith said in a press release Wednesday that the bill “would greatly improve public safety and transparency, and represents a chance to even the playing field by allowing small businesses and people from marginalized communities participating in this emerging industry to access traditional lending.”

“Current banking regulations disproportionately hurt small businesses, women, and people of color, and we cannot afford to wait any longer while they are being excluded from the opportunities created by legal cannabis markets,” Smith said. “We urge every member of the House who is concerned about safety and fairness to support this bill.”

The Marijuana Policy Project (MPP) made a similar argument in an op-ed published on Monday.

“Members of Congress should allow banks to provide financial services to cannabis businesses,” MPP Executive Director Steve Hawkins said. “This creates access to resources for minority and women entrepreneurs and increases the chances for success in state equity initiatives. The SAFE Act is the best next step toward establishing a more equitable cannabis industry in the U.S.”

Justin Strekal, political director of NORML, wrote in an op-ed on Tuesday that a “congressional fix is necessary” to resolve banking issues in the marijuana industry.

“In short, the upcoming banking vote is an important first step by Congress,” he said. “But much more action will still need to be taken in order to ultimately comport federal law with the new political and cultural realities surrounding marijuana.”

Florida Agriculture Commissioner Nikki Fried said she agreed with MPP’s position, writing that the SAFE Banking Act “improves equity for minority & women entrepreneurs—Congress should pass it.”

The Cannabis Trade Federation and Veterans Cannabis Project also voiced supported for passing the banking legislation.

The bill will “set things right by granting legal marijuana businesses access to traditional banking services, just as any other legitimate business receives,” Law Enforcement Action Partnership said in an action alert.

That said, Will Heaton, vice president of government affairs at JustLeadershipUSA, another group that called for the banking vote delay, told Marijuana Moment in an interview that congressional cannabis reform “requires a very holistic approach.”

“Even in Chairwoman Waters’s statements in the markup and in the hearings earlier this year, she’s been a very avid supporter of justice reform and I don’t want to take away from that record at all,” he said. “At the same time, I think this is just a misstep in terms of not taking advantage of the opportunity that we had here to pass legislation that would be able to significantly address some of these disparities.”

To be sure, Waters said during her committee’s vote on the banking bill that it “addresses an urgent public safety concern for legitimate businesses that currently have no recourse but to operate with just cash,” but that “I also consider this bill as part of a holistic approach toward providing criminal justice reform to those who have been harmed by criminalization of marijuana, and should not by any means be the only bill the House takes up on the important issue of cannabis reform.”

Despite pushback against the bill from certain progressive lawmakers such as Rep. Alexandria Ocasio-Cortez (D-NY), who said last week she was considering voting against it because it didn’t fully grapple with social equity, insiders generally expect the SAFE Banking Act to pass in the Democratic-controlled chamber, even under the expedited procedure being used that requires a two-thirds majority.

In an effort to broader the bill’s GOP appeal, its sponsor, Rep. Ed Perlmutter (D-CO) moved to add amendments at the last minute that would clarify that banks would be protected while servicing hemp and CBD businesses and also stipulate that federal regulators couldn’t target certain industries like firearms dealers as higher risk for fraud without valid reasons.

The lobbying arm of the conservative think tank Heritage Foundation remains opposed to the legislation, however, writing on Tuesday that the bill is “a shortcut to federal marijuana legalization and undermines existing federal law in the process.”

The group is joined by the prohibitionist Smart Approaches to Marijuana, which similarly opposes the reform move.

Advocates who wrote the delay request letter made an eleventh-hour attempt to insert additional social equity language into the bill, but that didn’t come to fruition.

The House will vote on the bill on suspension of the rules, meaning it needs the supermajority threshold to pass and that no amendments can be added on the floor. Discussion on the legislation will also be limited to 40 minutes.

Aaron Houston contributed reporting from Capitol Hill for this story.

This story was updated to include a statement from Waters.

Senate Committee Includes State Medical Marijuana Protections In Spending Bill

This story was updated to clarify that groups met with staff for Waters rather than the lawmaker herself.

Photo courtesy of Mike Latimer.

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.

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.
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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.

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.
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