The first marijuana hearing of the 116th Congress kicked off on Wednesday. A House financial subcommittee asked witnesses about how banking access can improve public safety, how operating on a cash-only basis inhibits transparency and, at one point, whether the cash at these businesses smells like cannabis.
“The absence of a broader, permanent regulatory framework continues to keep nearly all banks out of this growing industry despite a clear interest,” Rep. Gregory Meeks (D-NY), chair of the subcommittee, said at the start of the session. “Today’s hearing will allow us to begin consideration of draft legislation to bring transparency, accountability and address a major driver of violent crime in this space.”
Presiding over the Consumer Protection and Financial Services Subcommittee hearing on "Challenges and Solutions: Access to Banking Services for Cannabis-Related Businesses" pic.twitter.com/TC0soeE2RM
— Rep. Gregory Meeks (@RepGregoryMeeks) February 13, 2019
Prior to the hearing, a bipartisan group of lawmakers circulated a draft bill that would shield banks from being penalized by federal financial regulators and affirm that profits from cannabis-related transactions “shall not be considered as proceeds from an unlawful activity.”
“Today, after six years, we finally have a hearing, and it comes too late,” Rep. Denny Heck (D-WA), who is a cosponsor of the the legislation, said in his opening remarks. “Too late to prevent dozens of armed robberies in my home state of Washington. Too late for Travis Mason… a 24-year-old Marine veteran in Aurora, Colorado, who reported for work as a security guard and Green Heart Dispensary on June 18, 2016, and was shot dead that night by an armed robber.”
“We have the power in this committee to prevent murders and armed robberies,” he said, referring to the fact that preventing marijuana businesses from accessing banks means that they must operate on an all-cash basis. “We must use it and we must use it now because we are already late.”
We've needed banking access for cannabis businesses for the past six years. It is unacceptable for Congress to allow such a critical public safety threat to go unaddressed. We're late, and it's past time to pass the #SAFEBanking Act. pic.twitter.com/Lzcm85YgyV
— Denny Heck (@RepDennyHeck) February 13, 2019
Rep. Ed Perlmutter (D-CO), another bill cosponsor, said that if lawmakers oppose legalization, “that’s their business.”
“But the American voters have spoken, and continue to speak, and the fact is you can’t put the genie back in the bottle,” he said. “Prohibition is over.”
Today’s hearing is a big deal for the thousands of employees, businesses and communities who have been put at risk b/c they have been forced to deal in piles of cash. We need #SAFEBanking to get cash off the streets & make our communities safer. https://t.co/fEmJbQc2X8
— Rep. Ed Perlmutter (@RepPerlmutter) February 13, 2019
I appreciate the Subcommittee allowing me to testify during the hearing. This comes 6 years after @RepDennyHeck & I first introduced our #SAFEBanking legislation. I also appreciate @RepSteveStivers & @WarrenDavidson bipartisan support of solving the cannabis banking problem. https://t.co/6ChK0qVc87
— Rep. Ed Perlmutter (@RepPerlmutter) February 13, 2019
Witnesses at the hearing included California State Treasurer Fiona Ma, Law Enforcement Action Partnership (LEAP) Executive Director Major Neill Franklin, banking representatives, a D.C.-based medical marijuana dispensary owner and the chair of the anti-legalization group Smart Approaches to Marijuana (SAM).
“The Committee is undoubtedly aware that cannabis businesses are not alone in struggling to gain access to banking—even though theirs is the most difficult situation. Any business that handles significant amounts of currency is also subject to greater scrutiny by the financial services industry for all of the reasons that are well understood by members of this committee,” Ma said in written testimony.
“W/o a bank account, legal #marijuana businesses must operate on a cash basis, making them targets for robberies, supporters of the legislation testified. In CA, cannabis dispensaries have dropped off duffel bags & suitcases full of cash to pay their taxes…" @fionama @FSCDems
— CA State Treasurer (@CalTreasurer) February 13, 2019
She said “an effective safe harbor mechanism in federal law promotes the safety of the public, improves the efficiency of collecting the taxes and fees we use to regulate the industry, and does not allow the banks and credit unions to totally abdicate their responsibilities to know their customers and avoid illicit money laundering.”
Rep. Ted Lieu (D-CA) said he was glad to see Ma testify. Legal marijuana “is here to stay & entrepreneurs & consumers deserve safe banking options,” he wrote on Twitter.
Glad to see @CalTreasurer @fionama as one of the witnesses in today's @FSCDems hearing on access to banking services for cannabis-related businesses. Legal #cannabis is here to stay & entrepreneurs & consumers deserve safe banking options. Watch LIVE here: https://t.co/KfPk9zVpaE
— Rep. Ted Lieu (@RepTedLieu) February 13, 2019
Rep. Dina Titus (D-NV) echoed that point and said that Nevada “is proof that the era of marijuana prohibition is over” and that it’s “time for the federal government to start acting like it.”
The first ever Congressional hearing on marijuana banking is taking place right now. Nevada is proof that the era of marijuana prohibition is over. It's time for the federal government to start acting like it.
— Dina Titus (@repdinatitus) February 13, 2019
Franklin, a retired Maryland police officer, said that current laws “encourage tax fraud, add expensive monitoring and bookkeeping expenses and—most importantly—leave legitimate businesses vulnerable to theft, robbery and the violence that accompany those crimes.”
“I’m not one for fear mongering—what I testify to here today is rooted in experience and research,” he said. “Any police officer who has worked the street, or investigated enough robberies, will testify to the same regarding any business forced to handle large amounts of cash.”
He told members of the subcommittee that the “safety of thousands of employees, business owners, security personnel, police officers and community members is in your hands.”
Rep. Maxine Waters (D-CA), chair of the full House Financial Services Committee, thanked Meeks for making this the first subcommittee hearing of the session and called the issue “so important.”
“So many people have been waiting on it,” Waters said before the subcommittee broke for a recess. “I appreciate it so much.”
The hearing was well-attended, as Rep. Alexandria Ocasio-Cortez (D-NY) highlighted in a tweet showing a line of people holding places in line for lobbyists and “those who can afford it pay people to hold their spot.”
Apparently this is a normal practice, and people don’t bat an eye.
The first few people in line are guaranteed a seat in a given hearing.
This was the hearing for marijuana banking laws. Lobbyists and those who can afford it pay people to hold their spot so they get in 1st.
— Alexandria Ocasio-Cortez (@AOC) February 13, 2019
During the hearing, Ocasio-Cortez asked whether providing banking access to the marijuana industry would be “compounding the racial wealth gap right now,” giving an advantage to mostly white, wealthy business owners over individuals from communities disproportionately impacted by the drug war.
Corey Barnette, the DC marijuana business owner, said he agreed that the industry as it exists today is not reflective of society as a whole, but he also argued that banking access can provide even smaller prospective business owners with means “within reach” to start a cannabis company.
During one of the lighter moments in the hearing, Rep. Rashida Tlaib (D-MI) asked Barnette whether the cash at his dispensary smelled like marijuana.
“I heard it’s true,” Tlaib said. “The money does smell, correct?”
“That has been the case in some instances,” Barnette replied.
While SAM board chair Jonathon Talcott was seldom addressed by members throughout the hearing, Rep. Roger Williams (R-TX) asked the witness whether it was “a universally accepted fact that marijuana is not a gateway drug and has no negative negative impacts to public health.”
Talcott claimed that cannabis “is very clearly a gateway drug” and peddled anecdotes about “marijuana-induced psychosis” in states that have legalized.
At the Consumer Protection and Financial Institutions Subcommittee hearing where we're discussing the challenges and solutions concerning cannabis-related businesses and their access to banking services. pic.twitter.com/MCjOwlyNOf
— Rep. Jennifer Wexton (@RepWexton) February 13, 2019
Heck, one of the banking bill cosponsors, addressed what’s motivated him to be an advocate for legislation on financial services solutions for the marijuana industry. He said it was his brother, who died after being exposed to herbicides while serving in the Vietnam War.
“Toward the end of his life, the only relief he could find was from the illegal consumption of marijuana,” Heck said. “I’ve always thought and lived with the irony that the same nation that asked my brother to put on a uniform and put his life at risk—in an activity that eventually did in fact take his life—held him to be criminal when he found the relief in the only way he could.”
And if creating a safeguard for banks makes it easier for marijuana businesses to provide that relief to patients, then that’s reason enough to fight for reform, Heck said.
“Congress has an opportunity to make a simple policy change that will greatly benefit communities and small businesses by approving cannabis banking reform,” Aaron Smith, executive director of the National Cannabis Industry Association, said in a press release. “Representatives Perlmutter and Heck should be commended for pushing for this hearing so that this issue can get the attention it deserves and we can move toward a sensible policy that will increase public safety and transparency in this burgeoning industry.”
Rep. Earl Blumenauer (D-OR), who released a blueprint outlining the legislative path to marijuana legalization, said in a press release that tackling “the access to banking issue” is “one of the first dominos that should fall.”
The hearing shows that Congress is “finally making progress toward addressing the irrational, unfair, and unsafe denial of regular banking services for state-legal marijuana businesses around the country,” he said.
“Today’s hearing was a big deal for the thousands of employees, businesses and communities across this country who have been put at risk because they have been forced to deal in piles of cash while Congress sticks its head in the sand,” Perlmutter, the other bill cosponsor, said in a press release. “The American voters have spoken and continue to speak, and the fact is you can’t put the genie back in the bottle. The SAFE Banking Act is focused solely on taking cash off the streets and making our communities safer, and only Congress can take these steps to provide this certainty for businesses and financial institutions across the country.”
I appreciate today's first-ever hearing on #cannabis banking & I encourage all my colleagues to consider the #SAFEBanking Act as a way to get cash off the streets and make our communities safer. Only Congress can provide certainty for these businesses and financial institutions. pic.twitter.com/o1fHWXNOcr
— Rep. Ed Perlmutter (@RepPerlmutter) February 14, 2019
47 states plus the District of Columbia have spoken & legalized some form of recreational or medical marijuana, including CBD. 318.2 million people live in these 47 states – that’s 97.7% of the population. Time to align state and federal law on this issue with #SAFEBanking.
— Rep. Ed Perlmutter (@RepPerlmutter) February 13, 2019
“We listened to hours of testimony today about the dangerous position we put store owners and employees in by forcing them to do all of their business in cash. We can fix this. We don’t have to force them to operate in a way that makes it difficult to secure and track their funds,” Heck added. “Regardless of our views of marijuana use, the voters have decided in states all over this country that they want recreational and medicinal markets. To continue to do nothing to protect public safety would be negligence.”
Photo courtesy of the House Financial Services Committee/YouTube.
GOP Congressman Falsely Claims Marijuana Can Be Legally Consumed In Public In ‘Many States’
A Republican congressman wrongly claimed that marijuana can be legally consumed in public in “many states” in a Twitter post on Friday.
Following a House vote in favor of anti-vaping legislation that also included a ban on menthol cigarettes, Rep. Andy Barr (R-KY) argued that the bill is an example of government overreach and that it would not prevent youth from using vaping products.
“Now, Democrats propose making possession of a menthol cigarette a violation of federal law when smoking a marijuana joint in public is legal in many states,” he wrote in his tweet. “Instead, we need to focus on real healthcare issues like surprise billing, the opioid epidemic and curbing coronavirus.”
Now, Democrats propose making possession of a menthol cigarette a violation of federal law when smoking a marijuana joint in public is legal in many states. Instead, we need to focus on real healthcare issues like surprise billing, the opioid epidemic and curbing coronavirus.
— Rep. Andy Barr (@RepAndyBarr) February 28, 2020
The claim about laws governing public cannabis consumption is likely to raise eyebrows among reform advocates familiar with state-legal marijuana programs.
It’s not the case that “many states” allow individuals to smoke in public areas. In fact, it’s one of the most commonly prohibited activities in legalization measures.
“Rep. Barr is anti-freedom and pro-false hysteria when it comes to cannabis,” Justin Strekal, political director of NORML, told Marijuana Moment. “Sadly, his desire to continue to see hundreds of thousands of Americans be arrested and incarcerated due to minor marijuana charges is held far too many of his colleagues in Congress.”
Karen O’Keefe, director of state policies at the Marijuana Policy Project, told Marijuana Moment that Barr’s “facts and priorities are wrong.”
“No legalization state allows public smoking of cannabis (other than in adult-only locations in some cases), and almost all medical cannabis states forbid it,” she said. “Marijuana isn’t associated with increased mortality, while cigarettes are associated with more than 480,000 deaths a year in the U.S. alone. Why is Rep. Barr maligning and voting against the safer substance, and working to keep it illegal?”
Here are some examples of public consumption policies in legal cannabis states.
Alaska: For adults over 21 years of age, the law permits “consumption of marijuana, except that nothing in this chapter shall permit the consumption of marijuana in public.”
California: “You can consume cannabis on private property but you cannot consume, smoke, eat, or vape cannabis in public places.”
Colorado: “Using marijuana in any way—smoking, eating or vaping—isn’t allowed in public places.”
Illinois: “There is no public consumption allowed for cannabis. Smoking or consuming weed is illegal in motor vehicles and public spaces, including your front porch.”
Massachusetts: “You can’t use marijuana in any form (smoking, vaping, edibles, etc.) in public or on federal land.”
Nevada: “Adults 21 years and older can legally consume marijuana, but with restrictions on where it can be consumed: You cannot use marijuana in any public place.”
Oregon: “Recreational marijuana cannot be sold or smoked in public.”
Put simply, the notion that public consumption of marijuana is widespread is a false narrative. A standout exception is Oklahoma, where medical cannabis patients are able to consume wherever tobacco is permitted. That said, Barr’s assertion that public marijuana smoking is legal in “many states” is patently false.
That the congressman is perpetuating that narrative isn’t especially surprising, however. Barr is no fan on cannabis, voting against spending bill amendments preventing the Justice Department from using its fund to interfere in state-legal medical marijuana programs as well as a separate measure last year that would’ve extended protections to all state cannabis programs.
That said, Barr isn’t alone in his opposition to the menthol cigarette ban that cleared the House on Friday. Several Democrats joined Republicans in voting against the measure in committee and on the floor. But their reasoning was generally that the targeted ban would lead to overpolicing of minority communities.
Photo courtesy of WeedPornDaily.
VA Notice About Researching Medical Marijuana For Military Veterans Deleted Shortly After Posting
The U.S. Department of Veterans Affairs (VA) will soon release a notice announcing that it is seeking information about the potential of marijuana and its components to treat medical conditions that commonly afflict military veterans.
A post describing the request was briefly uploaded to a government website this week, though it’s since been deleted—but not before Marijuana Moment downloaded a copy. A representative said in response to an e-mailed query that the document was “rescinded for edits” and a revised version will be published “at a future date.”
VA’s Clinical Science Research and Development Service wrote in the filing that it is interested in establishing a research program designed to “examine the potential for medical marijuana and cannabinoids to treat disorders and diseases prevalent in our Veteran population.”
In a request for white papers on the topic, the department said it’s especially interested in identifying potential medical uses for cannabis to treat neuropathic pain and symptoms of post-traumatic stress disorder (PTSD).
“Unrelieved neuropathic pain experienced by Veterans after spinal cord or peripheral nerve injury contributes to depression, anxiety, disrupted sleep, and overall decreased quality of life,” VA said. “PTSD, also highly prevalent in Veterans, is a mental health problem often co-morbid with chronic pain.”
“A large percentage of Veterans who seek relief from these conditions, resort to smoking marijuana or use unregulated dietary cannabis supplements, etc,” it continued. “It is therefore imperative to determine which cannabinoid compounds are truly effective, for which symptoms, in which populations, as well as the associated risks.”
VA said it is committed to researching and developing evidence-based treatment options for veterans, and that’s what the program is meant to address.
“Without the needed evidence base for medical marijuana, this will not be a treatment choice within VA,” the department wrote. “We hope to support a series of clinical trials, which in case of positive outcomes, will generate robust data to support the use of cannabinoid(s) for pain and/or PTSD (or one or more of its symptoms).”
The department plans to conduct clinical trials if the evidence indicates that medical cannabis can be useful. It touted the “cadre of experienced clinical investigators, a highly participatory research population, and mechanisms in place to support every aspect of clinical research.”
White papers submitted to VA under the now-deleted solicitation must contain four components: 1) the “formulation and route of administration of the cannabinoid preparation,” 2) their ability to manufacture and supply those preparations, 3) the investigational new drug registration for compounds that aren’t already approved by the Food and Drug Administration (FDA) and 4) evidence about the product’s efficacy in treating pain, PTSD and other conditions.
As drafted, the notice gives a deadline of March 15 to submit the requested one-page white papers, though it’s not clear if that will change when the updated notice is released.
Additionally, VA said it plans to collaborate with industry partners for “further understanding and development of evidence-based treatments such as medical marijuana and cannabinoids” and on April 27, will hold an “Industry Day” to discuss the “goals of the program.”
The department is “particularly interested in obtaining information about cannabinoid drugs availability, likelihood of their approval by the FDA (if not yet approved), and the data supporting their use for pain and PTSD treatment in Veterans,” the notice says.
Members of Congress and veterans advocates discussed the need for alternative treatment options, including medical cannabis, during a joint committee hearing earlier this week.
At the same time, bipartisan legislators are asking their colleagues to cosponsor a bill that would require VA to conduct research into the therapeutic potential of marijuana for veterans. That legislation already has 104 House cosponsors.
Read VA’s since-rescinded notice on medical marijuana research below:
Photo courtesy of Mike Latimer.
House Democrats Block Amendment To Restrict Marijuana Products In Anti-Vaping Bill
House Democrats pushed back against a Republican attempt to include a flavored marijuana vaping ban in a broader anti-vaping bill that passed the chamber on Friday, arguing that it doesn’t make sense to prohibit products that are already illegal under federal law.
Instead, several lawmakers argued that Congress should enact separate cannabis reform legislation that could include provisions designed to protect public health and reduce the appeal of marijuana to youth.
The issue first came up during a House Rules Committee hearing on Wednesday, with Rep. Morgan Griffith (R-VA) introducing an amendment to “include a prohibition against flavored marijuana products” such that they would be “treated in the same manner as flavored tobacco products” under the bill.
While the congressman argued that language of the legislation implicitly already provides for such a ban, he said it was important to clarify to send a message to young people that they can’t vape products containing nicotine or THC.
“Let it not be said in 2029 that we had a chance and we felt maybe we were getting to it in 2020,” he said. “Let’s just go ahead and do it. Let’s say you can’t sell flavored marijuana THC vaping products. My amendment makes that clear.”
Watch the conversation below:
Democratic members said they shared Griffith’s concern about underage use of flavored cannabis vaping products. However, Rep. Ed Perlmutter (D-CO) pushed back and said the proposal is not germane because marijuana remains illegal under federal law and so regulating these products requires separate congressional action.
Earlier in the hearing, he suggested that his House-passed cannabis banking bill—the Secure and Fair Enforcement (SAFE) Banking Act—could serve as a vehicle to address the body’s concerns.
“We have to start addressing it because we have 47 states that now are allowing some level of marijuana use when the statute under the Controlled Substance Act clearly makes it illegal,” the congressman said. “There’s a bill sitting in the Senate called the SAFE Banking Act that may get back here at some point, and we could put some testing and regulatory components on it.”
Watch this exchange below:
Is a flavored marijuana vaping ban even necessary?
Also during the hearing, Rep. Rob Woodall (R-GA) pressed Rep. Frank Pallone (D-NJ) about the lack of specificity in the bill as it concerns marijuana vaping products. Woodall said he wanted that aspect addressed before he leaves office in nine months.
“It strikes me…more than strange that banana crush [nicotine vaping products] will no longer be available to adults in my district. But banana strawberry cream, which is an illegal [marijuana] product today, will continue to be available at 180 retailers near you,” Woodall said. “I don’t know how I take that message into my high schools and say that we’re going to reduce drug dependency in the months and years ahead.”
Watch the conversation below:
Pallone said he appreciates Woodall’s concern that flavored vaping products can mislead consumers about what they’re actually putting into their bodies and that he “would tend to think that the same problem would exist” for flavored marijuana products. However, he said there’s a distinction to be made.
“Most people tell me that nicotine is much more toxic and much more dangerous to your health than marijuana so maybe we shouldn’t have restrictions on marijuana at all and maybe we shouldn’t have any restrictions on flavored marijuana because the marijuana doesn’t have the same health problems that nicotine has,” he said. “Maybe I should say, assuming that marijuana is dangerous then maybe the flavored should be. But it’s not as dangerous.”
“The reality is that we know that nicotine is much more dangerous than marijuana so maybe the flavors masking it is not as serious a problem as it would be for nicotine,” he said.
Griffith’s amendment was blocked from floor consideration in a party-line vote of 3-6 by the panel, but the conversation around flavored marijuana products continued on Friday on the House floor.
Rep. Greg Walden (R-OR) brought a poster board showing pictures of flavored cannabis vaping products and lamented that they are not explicitly included in the anti-vaping bill.
“If you want to do something about kids—if you want to do something about lung disease—then we need to do something about marijuana and the oils it gets mixed with that this bill does not address,” he said.
But Rep. Earl Blumenauer (D-OR) pointed out that if Republicans are interested in ensuring that such marijuana products are properly regulated, the substance needs to be removed from the Controlled Substances Act to provide Congress with the means to enact regulations.
Rep. Earl Blumenauer counters by pointing to marijuana's schedule I status, saying federal regulation of flavored cannabis would be like trying to regulate "flavored heroin." Plugs the MORE Act to deschedule marijuana. https://t.co/w4Jpudt137
— Emily Kopp (@emilyakopp) February 28, 2020
Imposing regulations on marijuana while it’s still federally prohibited is “like regulating flavored heroin,” he said. The congressman added that a bill to deschedule marijuana called the Marijuana Opportunity Reinvestment and Expungement (MORE) Act would give lawmakers the tools to protect public health.
“The challenge that we have now is to be able to move forward—to be able to protect young people and the public,” Blumenauer said. “Cannabis is a red herring. If we tax and regulate it, then we can deal with the products they’re talking about. But unless and until we bring it—as two-thirds of the states have done—to actually tax and regulate it, we can’t deal with that. It doesn’t matter.”
We have a crisis of youth vaping. And we’ve seen a disturbing number of lung injuries & deaths tied to the oil used in marijuana vaping. Unfortunately #HR2339 before us today does nothing to impact either. Instead, it's a partisan publicity stunt by big government liberal elites. pic.twitter.com/AUx8ZMar0L
— Richard Hudson (@RepRichHudson) February 28, 2020
Not all Democrats were on board with the anti-vaping bill.
It was a tight 213-195 vote in the House on Friday. Top Democratic leaders are faced challenges as they worked to get the broader legislation approved. Some members of the party have expressed opposition over policies to ban flavored tobacco, including menthol, which they argue would lead to overpolicing of minority communities.
Image by Lindsay Fox from Pixabay.