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.
DEA Seeks Contractor Capable Of Burning Four Tons of Marijuana Per Day
The Drug Enforcement Administration (DEA) recently reached out for help burning “at least” 1,000 pounds of marijuana per hour for eight hours straight.
Every year, DEA seizes millions of marijuana plants and literal tons of raw cannabis, which eventually end up being destroyed. The successful contractor in Arizona would be responsible for burning marijuana and other controlled substances seized as evidence in drug cases “to a point where there are no detectable levels, as measured by standard analytical methods, of byproduct from the destruction process.”
“DEA shall inspect the incinerator to ensure no drug residue remains,” the agency said.
DEA posted the work description earlier this month in what’s called a “sources sought notice,” an initial step before a formal request for proposals is sent.
“This is not a request for proposals and does not obligate the Government to award a contract,” the post says. “The Drug Enforcement Administration (DEA) is conducting market research, and is encouraging all businesses, including small businesses, to respond to this notice.”
An accompanying statement of work gives a behind-the-scenes look at the DEA’s process of destroying seized drugs. Typical boxes weigh between 40 and 60 pounds, for example, but can weigh up to 200 pounds. Contraband might come in on “semi-trucks, tractor trailers, cargo vans, fork lifts, etc.,” the work description says.
“The drugs are usually tightly compressed ‘bricks’ or ‘bales,’” it continues, and are packaged in all sorts of materials: cardboard, wrapping paper, plastic wrap, aluminum foil, packing tape, “duct tape and derivatives,” plastic evidence bags, “grease/oil” and others. Contractors will be expected to burn that stuff, too.
To avoid potential contact highs, there must be ”proper ventilation” and “no smoke buildup” will be allowed. Other mandates include closed-circuit cameras that capture the entire process, which DEA reserves the right to access, as well as background checks and regular drug tests of all personnel.
Armed DEA agents and contractors will be present during scheduled burns.
The work is also very hush-hush, so whoever gets the job shouldn’t expect to regale friends with stories of the latest large-scale federal weed burning sesh.
“The contractor and its personnel shall hold all information obtained under the DEA contract in the strictest confidence,” the work description says. “All information obtained shall be used only for performing this contract and shall not be divulged nor made known in any manner except as necessary to perform this contract.”
The work would start January 1 of next year and the contract would expire in 2026 unless terminated sooner. The deadline to send information for would-be contractors was Friday.
Photo courtesy of Chris Wallis // Side Pocket Images
Harris Will Give Biden ‘Honest’ Input On Legalizing Marijuana And Other Issues As Part Of ‘Deal’
Democratic vice presidential nominee Kamala Harris says she has a “deal” with Joe Biden to candidly share her perspective on a range of progressive policies he currently opposes, including legalizing marijuana. Separately, she also recently discussed cannabis reform in a private meeting with rapper Killer Mike.
During an interview on 60 Minutes that aired on Sunday, the senator was pressed on marijuana and numerous other issues where she and Biden disagree. In response, while she didn’t specifically commit to proactively advocating for comprehensive cannabis reform, she pledged in general that she would always share her views with the would-be president if the pair are elected next week.
“What I will do—and I promise you this and this is what Joe wants me to do, this was part of our deal—I will always share with him my lived experience as it relates to any issue that we confront,” she said after the interviewer listed cannabis legalization among a handful of issues on which she and Biden depart. “I promised Joe that I will give him that perspective and always be honest with him.”
If elected, would Kamala Harris advocate for Medicare for All, a plan Joe Biden doesn’t support?
— 60 Minutes (@60Minutes) October 26, 2020
Asked whether that perspective will be “socialist” and “progressive,” Harris laughed and said “no.”
“It is the perspective of a woman who grew up a black child in America, who was also a prosecutor, who also has a mother who arrived here at the age of 19 from India, who also, you know, likes hip hop,” she said.
The senator’s taste in music also came up during her own 2020 presidential bid, when she said in an interview that she listened to Snoop Dogg and Tupac while smoking marijuana during college despite graduating before those artists released their debut albums.
Music culture has played a key role in this election cycle, and one of the strongest voices for criminal justice reform in the industry is Killer Mike, who worked as a surrogate for Sen. Bernie Sanders (I-VT) when he was running for the Democratic presidential nomination. The artist said he met with Harris on Friday and the two discussed cannabis business opportunities for communities of color.
Just had a meeting with Sen. Harris.
My points *Dems Need to be heavy on the door Knox’N, HR40 tweek it better and have Biden Sign, Fed Trades Programs for worker class Americans so u can build, Black men exit prison and entrance to marijuana biz as a priority for biz and jobs
— Killer Mike (@KillerMike) October 23, 2020
As she’s done repeatedly since joining Biden’s campaign, Harris also reiterated at a rally in Pontiac, Michigan on Sunday that the administration would pursue marijuana decriminalization and expunging prior cannabis convictions.
She made similar comments during a campaign event in Atlanta last week, stating that the “war on drugs was, by every measure, a failure, and black men were hit the hardest.” That said, while the senator has come to embrace broad cannabis reform, she’s faced criticism over her past opposition to legalization and role in prosecuting people for marijuana offenses as a California prosecutor.
In another interview released last week, Harris said she and Biden “have a commitment to decriminalizing marijuana and expunging the records of people who have been convicted of marijuana offenses.”
“When you look at the awful war on drugs and the disproportionate impact it had on black men and creating then criminal records that have deprived people of access to jobs and housing and basic benefits,” she said.
There’s been some frustration among cannabis reform advocates that Harris has scaled back her reform push since joining the Democratic ticket as Biden’s running mate. During her own run for the presidential nomination, she called for comprehensive marijuana legalization but has in recent weeks focused her comments on the more modest reforms of decriminalization and expungement.
Harris, who is the lead Senate sponsor of a bill to federally deschedule marijuana, said last month that a Biden administration would not be “half-steppin’” cannabis reform or pursuing “incrementalism,” but that’s exactly how advocates would define simple decriminalization.
In any case, the senator has repeatedly discussed cannabis decriminalization on the trail. She similarly said during a vice presidential debate earlier this month that she and Biden “will decriminalize marijuana and we will expunge the records of those who have been convicted of marijuana.”
In addition to those policies, Biden backs modestly rescheduling the drug under federal law, letting states set their own policies and legalizing medical cannabis.
Photo element courtesy of California Attorney General’s Office.
GOP Tennessee Senator Calls For Medical Marijuana Legalization In New Campaign Ad
A Tennessee senator touted his support for legalizing medical marijuana in a campaign ad released on Friday.
In the 30-second spot, which has notably high production value for this kind of local race, state Sen. Steve Dickerson (R) talks about both the therapeutic benefits of cannabis and the consequences of broader marijuana criminalization.
“As your state senator, I’ve led the fight to legalize medical marijuana so our veterans and sickest Tennesseans can deal with chronic pain,” he said. “But this same life-saving plant has led to mass incarceration, with nonviolent marijuana possession resulting in lengthy prison sentences.”
It’s past time for Tennessee to legalize medical cannabis and give our sickest residents a smart, safe treatment to help with chronic pain. Legalization and securing criminal justice reform have been my top priorities, and I won’t stop fighting until we’ve changed the law. pic.twitter.com/28eFUy3loZ
— Steve Dickerson (@DickersonforS20) October 23, 2020
“I think that’s wrong. That’s why I’ve been pushing for criminal justice reform,” the senator added.
Dickerson, who sponsored a medical cannabis legalization bill that cleared a Senate committee in March, said in a Q&A published earlier this month that the policy change would be among his top three legislative priorities if he’s reelected.
His Democratic opponent, former Oak Hill Mayor Heidi Campbell, is in favor of “fully legalizing marijuana,” with her campaign site stating that cannabis crimes “disproportionately impact people of color and it’s time to end marijuana prohibition.”
But while Dickerson has earned a reputation as a moderate Republican given his positions on issues like cannabis reform, he’s faced backlash after declining to denounce an independent ad taken out on his behalf that some, including the LGBTQ rights organization Tennessee Equality Project (TEP), called racist.
The ad, which was paid for by Lt. Gov. Randy McNally’s (R) political action committee MCPAC, hits Campbell over her support for a nonprofit organization that is designed to keep young people out of prison, and it frames the group as “radical” and “extremist.” TEP rescinded their endorsement of Dickerson over his refusal to condemn the ad.
In the Tennessee legislature, marijuana reform has yet to pass—but there’s growing recognition that voters are in favor of the policy change. For example, former House Speaker Glen Casada (R) released the results of a constituent survey last year that showed 73 percent of those in his district back medical cannabis legalization.
Another former GOP House speaker, Beth Harwell, highlighted her support for the reform proposal during her unsuccessful bid for governor in 2018, and she referenced President Trump’s stated support for medical marijuana on the campaign trail.
In other Tennessee drug policy politics, a lawmaker in June blocked a resolution to honor murdered teen Ashanti Posey because she was allegedly involved in a low-level cannabis sale the day she was killed.
Photo courtesy of Philip Steffan.