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.
Biden Says Marijuana Might Be A Gateway Drug
Former Vice President Joe Biden (D) said on Saturday that he’s not sure if marijuana is a gateway drug that leads to the use of other, more dangerous substances.
“The truth of the matter is, there’s not nearly been enough evidence that has been acquired as to whether or not it is a gateway drug,” the 2020 presidential candidate claimed at a town hall meeting in Las Vegas. “It’s a debate, and I want a lot more before I legalize it nationally. I want to make sure we know a lot more about the science behind it.”
(Marijuana Moment’s editor provides some content to Forbes via a temporary exclusive publishing license arrangement.)
Vote To Federally Legalize Marijuana Planned In Congress
A key congressional committee plans to hold a historic vote on a bill to end the federal prohibition of marijuana next week, two sources with knowledge of the soon-to-be-announced action said.
The legislation, sponsored by House Judiciary Committee Chairman Jerrold Nadler (D-NY), would remove cannabis from the Controlled Substances Act and set aside funding to begin repairing the damage of the war on drugs, which has been disproportionately waged against communities of color.
(Marijuana Moment’s editor provides some content to Forbes via a temporary exclusive publishing license arrangement.)
Image element courtesy of Tim Evanson.
Where Presidential Candidate Deval Patrick Stands On Marijuana
Former Massachusetts Gov. Deval Patrick (D) announced on November 14, 2019, that he is seeking the 2020 Democratic presidential nomination.
The latecomer to the race does not have an especially reform-friendly record on drug policy issues compared to many of his rival contenders, and questions remain about where he stands on legalization for adult-use—or even medical use for that matter.
During his time as governor, he voiced opposition to a marijuana decriminalization proposal and raised concerns about a medical cannabis legalization measure. After voters approved that latter initiative, he said he wished the state didn’t have the program, and his administration faced criticism over its implementation.
That said, Patrick, who also served as the U.S. assistant attorney general for the civil rights division, does not appear to have expressed hostility to marijuana reform in recent years and during his time in office did take action in support of modest proposals such as resentencing for people with non-violent drug convictions. Here’s where the former governor stands on cannabis:
Legislation And Policy Actions
Patrick’s administration said that despite a marijuana decriminalization policy going into effect following the passage of a 2008 ballot initiative, law enforcement should be able to continue to search people suspected of possession. However, his office declined to approve a request from prosecutors to delay the implementation of the voter-approved policy change.
After the decriminalization proposal passed, Patrick directed the Executive Office of Public Safety and Security (EOPSS) to develop an implementation plan.
“Our office will continue to work collaboratively with EOPSS and the district attorneys and law enforcement agencies on implementation,” a spokesperson said. “It’s an ongoing process.”
The then-governor said he would work to toughen up enforcement of fines levied against people possessing marijuana.
“The bottom line is the governor believes that if people are fined they should pay the fines,” a spokesperson for his administration said.
Following the passage of a 2012 medical cannabis initiative in Massachusetts, Patrick said simply that the “voters have voted,” and pledged that he wouldn’t seek to repeal the law.
But there were some complications that arose during his administration’s medical marijuana licensing approval process.
In February 2014, Patrick contradicted the state health department, which had recently announced that 20 business licenses had been accepted.
“No licenses have been given. No provisional licenses have been given. What we have is a multi-step process of screening out applicants,” he said. “Don’t get ahead of where we are. There was a balance struck here about trying to let the public in through transparency to the process even though the process was unfinished.”
When reports emerged that certain medical cannabis applicants had apparently provided false or misleading information in their application forms, Patrick said “[n]o good dead goes unpunished.”
“Rather than wait till the end when all that vetting and screening had been done, we’re going to do that first cut from 100 [applicants] down to 20, and we’re going to tell everybody,”
The next month, he dismissed requests for a review of the licensing process by applicants who the health department had rejected.
“I don’t think we gain anything by starting over,” he said. “We are in the middle of a process. Nobody has a license, no one is going to get a license until we meet the standards of the application process.”
Patrick was also criticized for failing to follow up with patient advocates who urged him to effectively implement the program.
“It appears the governor wants to skip out of office without addressing medical marijuana because he doesn’t want to talk about it and he doesn’t want to deal with it,” Massachusetts Patient Advocacy Alliance Executive Director Matthew Allen said in 2014.
Patrick’s successor, Gov. Charlie Baker (R), overhauled the his predecessor’s medical cannabis licensing process to create “a more streamlined, efficient, and transparent process that allows the Commonwealth to maintain the highest standards of both public safety and accessibility.”
Despite opposing marijuana decriminalization and expressing concerns about medical cannabis legalization, the governor did sign several drug policy reform bills during his time in office.
Patrick signed legislation in 2012 that reduced mandatory minimum sentences for people with non-violent drug convictions. He’d introduced a package of bills that included a call for the repeal of such mandatory minimums the previous year, earning praise from reform advocates.
“We need an effective and accountable re-entry program for those leaving the criminal justice system,” Patrick said in a statement. “Combining probation and parole, and requiring supervision after release, takes the best practices from other states to assure both public safety and cost savings.”
Another piece of legislation the then-governor proposed was to reduce the scope of “drug-free school zones,” where people charged with drug crimes would face mandatory minimum sentences. He recommended reducing the size of these zones from within 1,000 feet of a school to 100 feet.
Patrick signed off on a bill in 2014 to expand access to drug treatment.
“This bill creates some new rules and new tools for us to use together to turn to our brothers and sisters who are dealing with these illnesses and addiction and help them help themselves,” he said.
But in 2012, Patrick signed a bill prohibiting certain synthetic drugs called “bath salts.”
On The Campaign Trail
So far, Patrick has not made drug policy a center-stage issue in his campaign. However, his website says his agenda involves “making meaningful fixes to the big systems that consistently fail to meet modern needs.”
“This means a justice system that focuses less on warehousing people than on preparing them to re-enter responsible life,” the site says.
Previous Quotes And Social Media Posts
In 2007, a spokesperson for Patrick’s office said the governor would veto a proposed marijuana possession decriminalization bill. Patrick told the Associated Press that he had other priorities when asked whether he would sign the legislation.
He was listed as a supporter for a campaign that opposed the 2008 decriminalization ballot measure that voters later approved.
Oddly, two years earlier, Patrick was asked about a decriminalization proposal during a debate and said that while he’s “very comfortable with the idea of legalizing marijuana,” he doesn’t “think it ought to be our priority.” He went on to say that he would veto a proposed decriminalization measure in the legislature.
Massachusetts voters also approved a 2012 medical cannabis initiative while Patrick was in office—in spite of the fact that he declined to endorse the measure.
Asked about the proposal during a radio interview with WBZ, the then-governor first cited an argument in support of legalization made by conservative author William F. Buckley Jr., who said regulating drug sales would remove a profit motive for illicit dealers. Yet he went on to say that “I’m not endorsing” the initiative.
“I’m not expressing a point of view and I’m not dodging, it’s just I’ve got so much else I’m working on,” he said.
The host asked if Patrick would implement the law if voters approved it and he said “that’s, I think, what we’re supposed to do.”
In September 2012, he said that he doesn’t “have a lot of enthusiasm for the medical marijuana” measure, which was set to go before voters two months later.
“I mean I have heard the views on both sides and I’m respectful of the views of both sides, and I don’t have a lot of energy around that,” he said. “I think California’s experience has been mixed, and I’m sympathetic to the folks who are in chronic pain and looking for some form of relief.”
“I really have to defer to the medical views about this and individuals will get a chance to vote on this,” Patrick said in April 2012. “I haven’t been paying much attention to it.”
While his administration struggled to implement the program after voters had approved it, Patrick said in August 2014 that “I wish frankly we didn’t have medical marijuana.”
Responding to q abt medical marijuana dispensaries in westrn Mass @massgovernor says "Look, I wish frankly we didn't have medical marijuana"
— Sharman Sacchetti (@SharmanTV) August 20, 2014
Patrick doesn’t appear to have publicly weighed in during the Massachusetts campaign about legalizing marijuana for adult-use, which voters approved in 2016 after he had left office.
In 2012, Patrick said during a State of the State Address that Massachusetts should reevaluate how it treats people convicted of non-violent drug offenses.
“In these cases, we have to deal with the fact that simply warehousing non-violent offenders is a costly policy failure,” he said. “Our spending on prisons has grown 30 percent in the past decade, much of that because of longer sentences for first-time and nonviolent drug offenders. We have moved, at massive public expense, from treatment for drug offenders to indiscriminate prison sentences, and gained nothing in public safety.”
“We need more education and job training, and certainly more drug treatment, in prisons and we need mandatory supervision after release,” he said. “And we must make non-violent drug offenders eligible for parole sooner.”
He also said that the “biggest problem is that our approach to public safety has been to warehouse people,” and that the “answer is new policies, not bigger warehouses.”
“We’ve been warehousing people for whom what they really need is treatment and not just time,” he said during a town hall event in 2009.
Patrick voiced support in 2006 for a bill that would legalize the over-the-counter sale of needles in order to prevent the spread of disease.
“Deval Patrick supports this legislation because he believes it will reduce dangerous diseases in our state,” a campaign spokesperson said. “Studies in other states have shown that programs such as these decrease the rates of disease infection without increasing drug use.”
Patrick later criticized then-Gov. Mitt Romney (R) for vetoing the legislation, stating that the official “put misguided ideology before leadership in public health.”
Personal Experience With Marijuana
Patrick said in 2012 that he has never “experienced marijuana myself” but that during his school years there “was probably enough around me that there was a second-hand, a contact-high.”
Marijuana Under A Patrick Presidency
It is difficult to assess how Patrick would approach federal marijuana policy if elected president, but his vocal opposition to decriminalization in Massachusetts and his administration’s troubled implementation of medical cannabis legalization is likely to give advocates pause. While his current position on legalizing marijuana for adult-use is unclear, given that drug policy reform has become a mainstream issue that candidates are routinely pressed on, it is likely the former governor will be asked to weigh in on the campaign trail.
But for the time being, it appears that Patrick would not make marijuana reform a priority and, in fact, might prove more resistant to policy changes such as descheduling that the majority of candidates now embrace.