Rep. Maxine Waters (D-CA) said marijuana banking legislation will advance to the House floor despite the fact that some major advocacy groups are calling for a delay until more comprehensive cannabis reform is first passed.
The congresswoman, who chairs the House Financial Services Committee, told Marijuana Moment in an interview on Wednesday that she appreciates the concerns outlined by groups including the ACLU and Center for American Progress, which released a letter on Tuesday stating that they were worried that passing the banking bill would undermine broader reform efforts.
The problem, she said, is that Judiciary Committee Chairman Jerrold Nadler (D-NY) hasn’t yet advanced the more wide-ranging legalization legislation those groups favor, leaving House leadership in a bind as they plan out the floor calendar.
“I know that leadership is in support of the Judiciary moving as fast as they possibly can with the bill that would deal with those civil rights issues,” she said. “We just can’t get from Judiciary exactly when they are going to do that.”
“And so what’s going to happen is Mr. Perlmutter’s bill 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 Mr. Perlmutter’s bill is going to get,” she said, referring to the Secure and Fair Enforcement (SAFE) Banking Act sponsored by Rep. Ed Perlmutter (D-CO).
“We’ve been working on it for six years—the banks are reticent to deal with the cannabis industry. The states are moving forward very quickly to authorize and support cannabis. All this cash is piling up. And so something has to be done to give safe harbor to the banks.”
Perlmutter’s bill was approved by Waters’s House Financial Services Committee with a strong bipartisan vote in March, and certain advocates expected the full chamber to take it up before the summer recess. While that didn’t pan out, Majority Leader Steny Hoyer (D-MD) informed the Democratic Caucus last week that he intends to hold a floor vote by the end of the month, his staff confirmed to Marijuana Moment. A vote has not yet been scheduled, however.
That announcement came one day after Senate Banking Chairman Mike Crapo (R-ID) said his panel would vote on cannabis banking reform, though he declined to provide a timeline beyond saying that he wants to get it done by the end of the year.
Hoyer’s announcement took some advocates by unpleasant surprise, as they were under the impression that something like Nadler’s Marijuana Opportunity, Reinvestment and Expungement (MORE) Act—which addresses social equity and restorative justice—would get a vote before the House worked to pass what’s viewed as a largely industry-friendly banking bill.
“I just think it’s a matter of timing. I think the Judiciary bill, whenever it’s ready, it’s going to move as quickly as they get it ready, and it will be supported,” Waters said.
Perlmutter echoed that point in an interview with Marijuana Moment on Wednesday.
“We’ve had this passed [out of committee] for six months and certainly support all of what they’re trying to do,” he said, referring to his banking bill and the groups’ call for comprehensive reform. “But we’ve got to get these things moving.”
“That’s what I’m trying to do, and I think we’re going to be successful.”
The congressman also said he agreed with Waters about the need for Judiciary to act.
“I think they’re prepared to set a markup and move it, and I’m a cosponsor of that bill. But I want to get this one going,” he said. “This sort of breaks the ice for everything else. That’s been what we’ve talked about for a long time, and this one we’ve been working on a long time.”
Rep. Matt Gaetz (R-FL), a close ally of the Trump administration, had sharp words for groups urging a delay on a marijuana banking vote, stating that it’s “deeply disappointing that instead of adding to the coalition of the marijuana reform movement, we continue to find new and destructive ways to divide the coalition.”
“It is unfortunate that some of the most left-wing elements of our pro-marijuana reform coalition are now making demands beyond freedom,” he said. “The way we attract folks on the libertarian and right to our movement is to embrace freedom and to show it’s both popular and helpful to people in their lives.”
But while the congressman went on to say that calls for social equity and reparations “fatally divide the movement,” he’s also a cosponsor of Nadler’s MORE Act that includes such provisions.
Rep. Eric Swalwell (D-CA) told Marijuana Moment that while he shares the groups’ frustration over inaction on broader reform, he’s going to support the banking bill when it comes to the floor because he has “a lot of constituents who would benefit greatly if we made reform in banking.”
“It’s just hard to look them in the eye and say I’m not going to support legislation that would help you immediately so you can help patients, help people who need it,” he said. “I’m inclined this one to support if it came up for a vote, but I understand the sentiment. I’m frustrated too.”
Jason Ortiz, vice president of the Minority Cannabis Business Association, told Marijuana Moment that while he similarly understands where groups like ACLU are coming from, the banking bill isn’t entirely about bolstering the industry and would also serve disadvantaged communities.
“SAFE banking would open bank financing sources to cannabis companies allowing approved social equity applicants to enter the market without accepting predatory terms from private investors just to open their doors,” he said. “Many entrepreneurs of color are looking to start their businesses immediately and become the success stories that will spur further support and investment in our communities.”
“While I understand and respect the position of our allies in advocacy, current social equity applicants should not be held hostage until we can enact legislation unlikely to pass under the current administration,” he said. “Doing so would give the multi-state operators even more of a head start which will widen the ownership gap in the cannabis industry.”
But Jasmine Tyler, advocacy director of the U.S. Program for Human Rights Watch, which also signed the Tuesday letter to House leaders, took a different view.
“Civil and human rights groups, criminal justice and drug policy advocates, faith leaders, and doctors have all called for the repeal of the US’s racialized marijuana enforcement and start repairing harms done to communities for decades,” she told Marijuana Moment. “For House Leadership to prioritize a bill that would advance banking rights over human rights is a travesty.”
Asked whether she had a message for the groups requesting a delay on the banking legislation, Waters said, “I don’t, except to say that the Democratic Caucus supports ensuring that minorities and others who have been disadvantaged, who’ve been unfairly incarcerated by those marijuana laws, must be supported in ways that will help them to benefit from this new industry.”
“We’re all waiting for the bill. We’re desperately waiting for that bill,” she said. “As soon as this gets ready, we’re all going to get forcefully behind it.”
Justin Strekal, political director of NORML, told Marijuana Moment that Waters is “one of the most effective champions of cannabis reform, from successfully moving the SAFE Banking Act swiftly out of committee earlier this year to being one of the original lead sponsors of the MORE Act.”
“After a successful vote on the banking bill, it will be time for cannabis advocates and the industry to unite behind the MORE Act to ensure passage this Congress,” he said.
“We are encouraged by the comments from Chairwoman Waters,” Neal Levine, CEO of the Cannabis Trade Federation, said. “While both industry and advocacy groups are seeking more substantial reforms, the banking issue is something that can be addressed immediately on a bipartisan basis. This is a move that should be cheered, as it will greatly enhance public safety and protect workers in states that have made the rational choice to end prohibition and regulate the sale of cannabis.”
Aaron Houston contributed reporting from Capitol Hill for this story.
This story has been updated to include comments from Perlmutter, Gaetz, Swalwell, Cannabis Trade Federation and Human Rights Watch.
Photo courtesy of Brian Shamblen.
Oregon Officials Explain How Decriminalized Drugs And Legal Psilocybin Therapy Would Impact The State
Oregon officials finalized a series of analyses this week on separate ballot measures to legalize psilocybin mushrooms for therapeutic use and decriminalize drugs while investing in substance misuse treatment.
The Oregon Criminal Justice Commission determined that the decriminalization initiative would reduce felony and misdemeanor convictions for drug possession by 91 percent, and that reduction would be “substantial for all racial groups, ranging from 82.9% for Asian Oregonians to approximately 94% for Native American and Black Oregonians.”
Overall, the policy change would result in a 95 percent drop in racial disparities for possession arrests, the panel projects.
“The CJC estimates that IP 44 will likely lead to significant reductions in racial/ethnic disparities in both convictions and arrests.”
The conviction estimate was included in the panel’s draft analysis first released last month, but the final version was expanded to include the arrest data as well. The new document also notes that “disparities can exist at different stages of the criminal justice process, including inequities in police stops, jail bookings, bail, pretrial detention, prosecutorial decisions, and others”—a point that activists hoped the panel would include.
That said, the commission noted it “lacks sufficient or appropriate data in each of these areas and therefore cannot provide estimates for these other stages.”
The new report, published on Wednesday, cites research indicating that the resulting “drop in convictions will result in fewer collateral consequences stemming from criminal justice system involvement, which include difficulties in finding employment, loss of access to student loans for education, difficulties in obtaining housing, restrictions on professional licensing, and others.”
The decriminalization proposal was the first ballot initiative in the state’s history to receive a report on the racial justice implications of its provisions under a little-utilized procedure where lawmakers can request such an analysis.
This information will be included in a voter pamphlet as a factual statement from the secretary of state’s office.
“Our current drug laws can ruin lives based on a single mistake, sticking you with a lifelong criminal record that prevents you from getting jobs, housing and more,” Bobby Byrd, an organizer with the More Treatment, A Better Oregon campaign, said in a press release.
Both the psilocybin therapy and drug decriminalization measures also received final explanatory statements and fiscal impact statements this week.
For the therapeutic psilocybin legalization initiative, the Financial Estimate Committee said that it projects the measure will have an impact of $5.4 million from the general fund during the two-year development period. After the program is established, it will cost $3.1 million annually, “which will be covered by the fees and tax funds for the administration and enforcement of the Act.”
The explanatory statement says the measure “directs the Oregon Health Authority to regulate the manufacture, delivery, purchase, and consumption of psilocybin, a psychoactive component found in certain mushrooms, at licensed psilocybin service centers” and that a “person would be allowed to purchase, possess, consume, and experience the effects of psilocybin only at a licensed psilocybin service center during a psilocybin administration session with a licensed psilocybin service facilitator.”
It also describes an initial two-year development period during which officials will research and make recommendations on “the safety and efficacy of using psilocybin to treat mental health conditions,” after which time the new law will allow “a client who is at least 21 years of age to purchase, possess, consume, and experience the effects of psilocybin at a licensed psilocybin service center during a psilocybin administration session with a licensed psilocybin service facilitator.”
Sam Chapman, campaign manager for the psilocybin initiative, told Marijuana Moment that the group is “satisfied with the explanatory statement and believe it captures the thoughtful approach we took that led to psilocybin therapy being on the ballot this November.”
“Specifically, we were happy to see the regulations and safeguards that are built into the measure highlighted in the explanatory statement,” he said. “We also believe that the fiscal committee saw and respected our approach to keep the psilocybin therapy program revenue neutral once up and running.”
The drug possession decriminalization measure is expected to cost $57 million annually, according to state officials, but it will be covered by marijuana tax revenue, which is “estimated at $61.1 million in 2019-21 and $182.4 million in 2021-23” and would therefore be “sufficient to meet this requirement.” Cannabis revenue to cities and counties would be reduced under the measure.
The reform would also save money through reduced drug enforcement. “These savings are estimated at $0.3 million in 2019-21 and $24.5 million in 2021-23,” the analysis says. “This will reduce revenue transferred from the Department of Corrections for local government community corrections by $0.3 million in 2019-21 and $24.5 million in 2021-23. The savings are expected to increase beyond the 2021-23 biennium.”
The initiative “mandates the establishment of at least one addiction recovery center in each existing coordinated care organization service area in the state,” the separate explanatory statement says, and describes how they would be funded with marijuana tax revenue.
“The measure eliminates criminal penalties for possession of specified quantities of controlled substances by adults and juveniles,” it says. “Instead, possession of these specified quantities of controlled substances becomes a non-criminal Class E violation for which the maximum punishment is a $100 fine or completion of a health assessment with an addiction treatment professional.”
Here’s a status update on other 2020 drug policy reform campaigns across the country:
A measure to effectively decriminalize a wide range of psychedelics has officially qualified for the November ballot in Washington, D.C.
Montana activists said last month that county officials have already certified that they collected enough signatures to place two marijuana legalization measure on the state ballot, though the secretary of state’s office has yet to make that official.
In Arizona, the organizers of a legalization effort turned in 420,000 signatures to qualify for the ballot last month.
Organizers in Nebraska last month submitted 182,000 signatures in an attempt to put a medical marijuana measure on November’s ballot.
Idaho activists behind a medical marijuana legalization initiative were hoping to get a second wind after a federal judge said recently that the state must make accommodations for a separate ballot campaign due to signature gathering complications caused by the coronavirus pandemic. But following a recent U.S. Supreme Court ruling against the other group, hopes are dashed.
Prior to the COVID-19 outbreak and stay-at-home mandates, separate measures to legalize marijuana for medical and recreational purposes qualified for South Dakota’s November ballot.
The New Jersey legislature approved putting a cannabis legalization referendum before voters as well.
And in Mississippi, activists gathered enough signatures to qualify a medical cannabis legalization initiative for the ballot—though lawmakers also approved a competing (and from advocates’ standpoint, less desirable) medical marijuana proposal that will appear alongside the campaign-backed initiative.
A campaign to legalize cannabis in Missouri officially gave up its effort for 2020 due to signature collection being virtually impossible in the face of social distancing measures.
North Dakota marijuana legalization activists are shifting focus and will seek qualification for the 2022 ballot.
Washington State activists had planned to pursue a drug decriminalization and treatment measure through the ballot, but citing concerns about the COVID-19 outbreak, they announced last month that they will be targeting the legislature instead.
Read the full state analysis of the Oregon drug decriminalization and psilocybin therapy measures below:
Top White House Official Blasts Marijuana Banking Provisions In Democrats’ Coronavirus Bill
Vice President Mike Pence’s top staffer on Thursday joined the chorus of Republicans criticizing House Democrats for including marijuana banking provisions to the chamber’s latest coronavirus relief bill.
Marc Short, who is Pence’s chief of staff and previously served as director of legislative affairs for the White House, discussed the COVID-19 legislation during an interview with Fox Business, and he described the Democratic proposal as a “liberal wish list” with “all sorts of things totally unrelated to coronavirus.”
“In one instance they have provided guarantees for banking access for marijuana growers,” Short said. “That has absolutely nothing to do with coronavirus.”
He’s referring to language that was inserted from the Secure and Fair Enforcement (SAFE) Banking Act to protect financial institutions that service state-legal cannabis businesses from being penalized by federal regulators.
Numerous Republicans—including Senate Majority Leader Mitch McConnell (R-KY)—have been critical of the provision, arguing that it is not germane to the issue at hand.
Democrats, for their part, have made the case that granting cannabis businesses with access to the banking system would mitigate the spread of the virus by allowing customers to use electronic payments rather than exchange cash. They also say it could provide an infusion of dollars into the financial system that’s especially needed amid the economic downturn caused by the pandemic.
Rep. Tulsi Gabbard (D-HI) told Marijuana Moment in an interview this week that she agrees with her colleagues that the marijuana banking provision is relevant to COVID-19 bill.
“By continuing to disallow anyone associated with these industries that states have deemed legal is further perpetuating serious problems and uncertainty during a time when, frankly, we need as much certainty as we can get,” she said.
While the Senate did not include the banking language as part of their COVID-19 bill, there’s still House-passed standalone legislation that could be acted upon.
The SAFE Banking Act has been sitting in the Senate Banking Committee for months as lawmakers negotiate over the finer points of the proposal.
Last month, a bipartisan coalition of state treasurers sent a letter to congressional leaders, asking that they include marijuana banking protections in the next piece of coronavirus relief legislation.
In May, a bipartisan coalition of 34 state attorneys general similarly wrote to Congress to urge the passage of COVD-19 legislation containing cannabis banking provisions.
USDA Approves Hemp Plan For Maryland And One More Indian Tribe
The U.S. Department of Agriculture (USDA) approved hemp regulatory plans for Maryland and the Lower Sioux Indian Community on Thursday.
With this latest development, the total number of approved plans across states, territories and tribes is 55.
“USDA continues to receive and review hemp production plans from states and Indian tribes,” the agency said in a notice.
While the agency released an interim final rule for a domestic hemp production program last year, industry stakeholders and lawmakers have expressed concerns about certain policies it views as excessively restrictive.
USDA announced in February that it will temporarily lift two provisions that the industry viewed as problematic. Those policies primarily concern testing and disposal requirements. The department declined to revise the THC limit, however, arguing that it’s a statutory matter that can’t be dealt with administratively.
Last week, two senators representing Oregon sent a letter to the head of USDA, expressing concern that testing requirements that were temporarily lifted will be reinstated in the agency’s final rule. They made a series of requests for policy changes.
Agriculture Secretary Sonny Perdue has said on several occasions that the Drug Enforcement Administration influenced certain rules, adding that the narcotics agency wasn’t pleased with the overall legalization of hemp.
State agriculture departments and a hemp industry association also wrote to Congress and USDA this week, seeking an extension of the 2014 Farm Bill pilot program for hemp to give states more time to develop regulatory plans to submit to the agency.
Meanwhile, the Food and Drug Administration (FDA) is still in the process of developing regulations for CBD. It sent an update on its progress to Congress in March, explaining that the agency is actively exploring pathways to allow for the marketing of the cannabis compound as a dietary supplement and is developing enforcement discretion guidance.
An FDA public comment period was reopened indefinitely for individuals to submit feedback on CBD regulations.
Last month, the White House finalized a review of FDA CBD and cannabis research protocols, but it’s unclear when or if the document will be released to the public.
Also last month, FDA submitted a report to Congress on the state of the CBD marketplace, and the document outlines studies the agency has performed on the contents and quality of cannabis-derived products that it has tested over the past six years.
Amid the coronavirus pandemic, hemp industry associations pushed for farmers to be able to access to certain COVID-19 relief loans—a request that Congress granted in the most recent round of coronavirus legislation.
However, USDA has previously said that hemp farmers are specifically ineligible for its Coronavirus Food Assistance Program. While the department initially said it would not reevaluate the crop’s eligibility based on new evidence, it removed that language shortly after Marijuana Moment reported on the exclusion.
Two members of Congress representing New York also wrote a letter to Perdue in June, asking that the agency extend access to that program to hemp farmers.
Hemp farmers approved to produce the crop do stand to benefit from other federal loan programs, however. The department recently released guidelines for processing loans for the industry.
Photo courtesy of Pixabay.