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.”
— Financial Svcs Cmte (@FSCDems) September 25, 2019
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.
Support for the #SAFEBanking Act is broad and diverse. ABA joined seven other influential groups in a letter to House and Senate leadership urging support for legislation that will "ensure that legal cannabis marketplaces are safe, legal, and transparent." https://t.co/NhVwulMosa pic.twitter.com/sz9QvGsoap
— American Bankers Association (@ABABankers) September 24, 2019
“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.”
There will be an historic vote on cannabis in the U.S. House of Representatives tomorrow. You can help! Contact your Representative today and ask them to support the #SAFEBankingAct.https://t.co/yDIFinfkuY pic.twitter.com/K2KWLVDBXh
— TheCannabisIndustry (@NCIAorg) September 24, 2019
“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.
Tomorrow, there is going to be a vote in the House to allow banks to service the state-legal cannabis industry.
It’s tally will represent which members of the House recognize that legalization affirmatively works.https://t.co/Zev1DPa073
— NORML (@NORML) September 24, 2019
“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 bill improves equity for minority & women entrepreneurs — Congress should pass it. https://t.co/lhHeY8QcvZ
— Commissioner Nikki Fried (@NikkiFriedFL) September 24, 2019
The Cannabis Trade Federation and Veterans Cannabis Project also voiced supported for passing the banking legislation.
— Cannabis Trade Federation (@CanTradeFed) September 24, 2019
TOMORROW the House of Representatives is scheduled to vote on the #SAFEBankingAct. Please take two minutes to encourage your lawmakers to protect #veterans' GI Bill benefits by passing this critical first step in #cannabis reform. #vetscannabis #vets https://t.co/foSfqegvQM
— Veterans Cannabis Project (@VetCannabisProj) September 24, 2019
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.”
— Heritage Action (@Heritage_Action) September 24, 2019
The group is joined by the prohibitionist Smart Approaches to Marijuana, which similarly opposes the reform move.
Expanding investment into Big Marijuana while people are dying from marijuana vaping?
— SAM (@learnaboutsam) September 24, 2019
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.
This story was updated to clarify that groups met with staff for Waters rather than the lawmaker herself.
Photo courtesy of Mike Latimer.
Majority Of Connecticut Residents Back Marijuana Legalization And Expungements, Poll Finds As Reform Bills Advance
As bills to legalize marijuana in Connecticut move through the legislature, a new poll finds that the reform has strong support among residents.
The survey from Sacred Heart University (SHU), released on Tuesday, found that about 66 percent of people in the state favor legalizing cannabis for adult use, while 27 percent are opposed.
If the policy change is enacted, 62 percent said those with prior marijuana convictions should have their records expunged.
Younger people and those who identify as Democrats were more likely to back ending prohibition, compared to those 65 and older or Republicans.
Further, the poll asked about perceived harms of cannabis, and 77 percent said they felt the plant carried “fewer effects” or comparable effects as alcohol. About 72 percent drew the same contrast between marijuana and other drugs such as heroin, amphetamines and prescription painkillers.
These figures are largely consistent with a previous poll that SHU conducted in February.
And like that prior survey, nearly half of Connecticut residents again expressed that they still believe that there are potential negative public safety implications of legalization, even if they support the policy. In this case, 48 percent said they agree that allowing recreational cannabis would lead to a “significant” increase in impaired driving.
Two in five respondents said they agree that marijuana is a gateway to other drugs. The poll involved interviews with 1,000 residents from March 23-31.
But while these figures largely align with the last SHU survey, one thing that has changed is that reform legislation has started to advance in the legislature, including a bill being backed by the governor.
The Judiciary Committee approved Gov. Ned Lamont’s (D) proposal, which was amended to more comprehensively address social equity issues, last week. That said, legislative leaders have indicated that the bill is fluid and will likely see additional revisions down the road.
A competing legalization measure from Rep. Robyn Porter (D) was approved in the Labor and Public Employees Committee last month.
One amendment that was adopted to the governor’s bill would provide for the free erasure of past marijuana convictions for possession or sales of up to four ounces of cannabis or six mature plants—a policy that is evidently backed by most residents in the state.
Lamont, who convened an informal work group in recent months to make recommendations on the policy change, initially described his legalization plan as a “comprehensive framework for the cultivation, manufacture, sale, possession, use, and taxation of cannabis that prioritizes public health, public safety, and social justice.”
For his part, House Speaker Matthew Ritter (D) said last month that “optimism abounds” as lawmakers work to merge proposals into a final legalization bill.
Majority Leader Jason Rojas (D) said “in principle, equity is important to both the administration and the legislature, and we’re going to work through those details.”
To that end, the majority leader said that working groups have been formed in the Democratic caucuses of the legislature to go through the governor’s proposal and the committee-approved reform bill.
In February, a Lamont administration official stressed during a hearing in the House Judiciary Committee that Lamont’s proposal it is “not a final bill,” and they want activists “at the table” to further inform the legislation.
The legislature has considered legalization proposals on several occasions in recent years, including a bill that Democrats introduced last year on the governor’s behalf. Those bills stalled, however.
Lamont reiterated his support for legalizing marijuana during his annual State of the State address in January, stating that he would be working with the legislature to advance the reform this session.
Ritter said in November that legalization in the state is “inevitable.” He added later that month that “I think it’s got a 50–50 chance of passing [in 2021], and I think you should have a vote regardless.” The governor said in an interview earlier this year that he puts the odds of his legislation passing at “60-40 percent chance.”
Should that effort fail, the speaker said he will move to put a constitutional question on the state’s 2022 ballot that would leave the matter to voters. Lamont made similar remarks last week.
The governor has compared the need for regional coordination on marijuana policy to the coronavirus response, stating that officials have “got to think regionally when it comes to how we deal with the pandemic—and I think we have to think regionally when it comes to marijuana, as well.”
He also said that legalization in Connecticut could potentially reduce the spread of COVID-19 by limiting out-of-state trips to purchase legal cannabis in neighboring states such as Massachusetts and New Jersey.
Photo courtesy of Mike Latimer.
Remembering Cannabis Legalization Pioneer Steve Fox
This post is a remembrance of longtime cannabis policy activist Steve Fox from his colleagues at VS Strategies and Vicente Sederberg LLP.
Dear Family, Friends, and Colleagues,
We are truly heartbroken to share news of the passing of our partner and dear friend Steve Fox. Steve served as managing partner of VS Strategies since co-founding it in 2013, and he was a leader at Vicente Sederberg LLP since its formation in 2010.
We welcome the celebration of Steve’s life through the sharing of thoughts and memories, and we ask for respect and privacy for his family, friends, and coworkers who are still reeling from this loss. We have also started a GoFundMe page to support Steve’s wife and daughters as they navigate their way through this extremely difficult time—https://www.gofundme.com/f/support-the-family-of-steve-fox
With wisdom beyond his years and a pioneering spirit, Steve was an “old soul” with a knack for seeing things in a new light. He was strongly principled, deeply empathic, and fiercely kind. And despite his usually soft-spoken and lighthearted demeanor, his opinions rarely went unheard and always carried significant weight.
His passion for politics and policy were exceeded only by his passion for people—his family, friends, and colleagues, as well as the multitude of strangers that he knew were being affected every day by politics and policy. He had a burning desire and uncanny ability to envision and effect positive change, both societally and in those closest to him. He was not just a remarkable human being, but a truly transformational leader.
Steve was always the first to volunteer and the last to seek credit. He was beyond generous with his time and patience, and perpetually understanding. He relished opportunities to provide counsel and guidance, and the feeling was mutual for those who received it. He was warmly regarded as a mentor by no fewer than a dozen current and former members of our firm, including all seven of us.
Steve was one of the first political professionals to enter the marijuana advocacy space. At a time when cannabis policy was just a blip on the political radar and most savvy up-and-comers were unwilling to dip a toe into the space, Steve dove in headfirst. While many viewed it as a losing cause that wasn’t worth the fight, he saw it as a cause worth fighting until it was won. And in working to legalize and regulate cannabis for medical and adult use, he found a way to fight simultaneously for several of his core values: To promote justice and compassion, to advance freedom and liberty, and to nurture and inspire the human spirit. Humbly righteous, judiciously aggressive, and relentlessly ethical, he was committed to doing the right thing, doing it the right way, and doing whatever it takes to get it done.
When he joined the Marijuana Policy Project in 2002, Steve was the only full-time cannabis lobbyist on Capitol Hill. He would remain at the forefront of the cannabis policy reform movement for nearly two decades, playing pivotal roles in several major victories at the federal and state levels.
Steve was a lead drafter of Colorado’s historic Amendment 64, which legalized cannabis for adult use, and he managed all aspects of the successful campaign behind its passage and implementation. He also conceptualized and co-founded Safer Alternative For Enjoyable Recreation (SAFER), which laid a lot of groundwork for the legalization effort and contributed to a seismic shift in the U.S. cannabis policy debate. In 2009, he co-authored the book “Marijuana Is Safer: So why are we driving people to drink?,” which is based on the SAFER strategy.
Steve was always thinking step ahead of the rest. Long before cannabis was legalized, he envisioned a legal, organized, and responsible cannabis industry. He played leading roles in conceptualizing and establishing several of the nation’s largest and most influential cannabis trade organizations, including the National Cannabis Industry Association, the Cannabis Trade Federation, and the U.S. Cannabis Council. He regularly led working group meetings and calls, and he was a frequent speaker at cannabis conferences.
Steve’s role in cannabis community cannot be overstated. He was a trailblazer in the movement to end prohibition, and he was an architect and caretaker of the legal industry that is quickly replacing it. He beat the path, built the shelter, and worked tirelessly to make it as welcoming, accessible and beneficial as possible. He always put the mission—the wellbeing of others and the betterment of society—ahead of himself.
No one was more reluctant to sing their own praises while being so deserving of a louder refrain.
In 2013, Steve received a highly esteemed award from the Drug Policy Alliance in recognition of his long-term spearheading of the Colorado legalization effort. With an audience of hundreds and the spotlight squarely on him, he used the better part of his brief acceptance speech to give recognition to the people and organizations who had supported and worked alongside him. He reserved only the final thought for his own personal message and dedication. It was to his parents, for raising him to believe in the Jewish philosophy “Tikkun olam”—to “repair or heal the world” through beneficial and constructive acts. That is what drove Steve to take on the cause of cannabis policy reform. And it was what drove Steve to be the person he was.
Tikkun olam. Mission accomplished, dear friend.
And the entire VSS and VS family
Biden’s Pick To Lead DEA Voiced Openness To State Medical Marijuana Program
President Joe Biden’s nominee to lead the Drug Enforcement Administration (DEA) previously described a New Jersey medical marijuana bill as “workable” while serving at the state’s attorney general.
Although the former top state prosecutor, Anne Milgram, doesn’t appear to have publicly detailed her personal views on cannabis reform, the limited comments she made over a decade ago signal that, at the very least, she’s open to allowing states to enact their own marijuana policies despite federal prohibition.
That’d be a big deal, as far as advocates are concerned. Having a DEA administrator who appears flexible with respect to state cannabis reform efforts would be a notable development given the role that the official plays in federal marijuana policy.
However, Milgram’s on-the-record remarks on the issue are admittedly minimal. In 2009, when the New Jersey legislature was considering a medical cannabis legalization bill, she called the proposal “workable,” according to a one-word quote included in an Associated Press report.
After the legislation was amended, a spokesperson for the then-attorney general said the change “tightens up the provisions…that could have become loopholes by people seeking to divert marijuana for illicit purposes.”
Biden announced Milgram as his pick to be the next DEA administrator on Monday, and now her nomination heads to the Senate. It is possible that she will be asked to elaborate on her views during a confirmation hearing before the Judiciary Committee.
Milgram’s prior statements are far from an explicit endorsement of medical cannabis legalization, but they do indicate that the nominee is not vociferously opposed to state-level reforms as has been the case for prior DEA administrators. And in combination with other Biden cabinet picks, that bodes well for advocates.
Attorney General Merrick Garland made clear during his oral and written testimony before the Senate, for example, that he does not feel the Justice Department should use its resources to go after people acting in compliance with state marijuana laws. That stands in contrast with President Donald Trump’s first selection for attorney general, Jeff Sessions, who rescinded Obama-era guidance deprioritizing prosecutions over state-legal cannabis activity.
The DEA, with authority delegated from the Department of Justice, plays an important role in determining the schedule status of marijuana and other drugs. If the agency’s administrator were to acknowledge the medical benefits of cannabis, it would deeply undermine its current classification in Schedule I, which is supposed to be reserved for substances with no therapeutic value.
That said, while the Justice Department and DEA play a key role in federal scheduling, a medical and scientific review by the Department of Health and Human Services (HHS) and the Food and Drug Administration is binding on the attorney general’s classification decision.
To that end, the former attorney general of California, Xavier Bacerra, was confirmed by the Senate to lead HHS, and he has a considerable record supporting cannabis reform and working to protect California’s legal program from federal interference.
Meanwhile, Biden has yet to nominate someone to run the federal Office of National Drug Control Policy (ONDCP), despite earlier reporting that a selection was imminent.
The presumed leading candidate to be White House drug czar—Rahul Gupta, the former chair of the West Virginia Medical Cannabis Advisory Board—has played a critical role in overseeing the implementation and expansion of a state medical marijuana program and has publicly recognized both the therapeutic and economic potential of cannabis reform.
But while any pro-reform appointment is notable in the new administration, the DEA administrator has played a historically antagonistic role opposing federal or state policy changes as they concern cannabis. And so Milgram would stand out as an especially significant pick to that end.
The nominee would be taking over the defense to a number of pending lawsuits from marijuana and psychedelics reform advocates and patients if confirmed.
For example, Seattle doctor hoping to expand access to psilocybin mushrooms for terminally ill cancer patients is taking DEA to court over the agency’s recent denial of an application to legally use the psychedelic in end-of-life treatment.
Scientists and veterans sued the federal agency last year, arguing that the legal basis DEA has used to justify keeping marijuana in Schedule I of the Controlled Substances Act is unconstitutional. They asked for a review of its decisions to reject rescheduling petitions in 2020, 2016 and 1992. DEA subsequently requested that the court dismiss that suit.
The agency has also been taken to court over delays in approving additional cannabis manufacturers for research purposes.
The Scottsdale Research Institute alleged that DEA has been deliberately using delay tactics to avoid approving cultivation applications. A court mandated that the agency take steps to make good on its promise, and that suit was dropped after DEA provided a status update.
In March 2020, DEA finally unveiled a revised rule change proposal that it said was necessary due to the high volume of applicants and to address potential complications related to international treaties to which the U.S. is a party.