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Key Senate Chairman Lays Out Possible Marijuana Banking Bill Changes

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A powerful Senate committee chairman said on Wednesday the he opposes House-passed marijuana banking legislation and laid out potential changes he would like to see to the bill before he takes it up in his panel.

Among other amendments being floated for public feedback is a 2 percent THC potency limit on products in order for cannabis businesses to qualify to access financial services as well as blocking banking services for operators that sell high-potency vaping devices or edibles that could appeal to children.

“I remain firmly opposed to efforts to legalize marijuana on the federal level, and I am opposed to legalization in the State of Idaho,” Sen. Mike Crapo (R-ID), who chairs the Senate Banking Committee, said in a press release. “I also do not support the SAFE Banking Act that passed in the House of Representatives. I have significant concerns that the SAFE Banking Act does not address the high level potency of marijuana, marketing tactics to children, lack of research on marijuana’s effects, and the need to prevent bad actors and cartels from using the banks to disguise ill-gotten cash to launder money into the financial system. I welcome input from all interested parties on how to thoughtfully address these concerns.”

The Secure And Fair Enforcement (SAFE) Banking Act, which would shield banks from being punished by federal regulators for working with state-legal marijuana businesses, passed the House in September with strong bipartisan support.

Crapo’s committee held a hearing on cannabis businesses’ access to financial services in July, though he had previously said that he did not support taking up the legislation in his panel while marijuana remains federally illegal. He then said he wanted to bring it up by the end of 2019, though later indicated in an interview with Marijuana Moment last month that impeachment could delay things. Now, he is taking the step of floating amendments to the House-passed proposal before moving forward with a vote.

The new document from the chairman largely tracks with comments he made in another Marijuana Moment interview in October in which he said laid out some areas of concern.

“The things we’re looking at are, first of all, to make sure we improve and clarify the interstate banking application of all of this,” Crapo said at the time. “Secondly, money laundering issues with regard to legacy cash to make sure how that is managed properly. [Financial Crimes Enforcement Network] issues and other related issues. And then finally the health and safety issues about what is going to be banked.”

“Take tobacco for example, every state I think has some kind of regulatory parameters around the utilization of tobacco, even if it’s just an age limit on who can purchase it or what have you and the types of products that are going to be allowed,” he continued. “That gets into a legal issue that I think the states need to be more engaged in, but it also impacts the question on what would be banked. Those kinds of issues—health and safety, interstate commerce and money laundering.”

Crapo is also floating new federal studies on marijuana and its effects, clarifying hemp businesses’ banking access and measures to deal with legacy cash and interstate commerce, among other areas for potential amendments. He also suggested that measures requiring studies on study on diversity and inclusion in the cannabis industry be removed from the legislation.

“I appreciate Chairman Crapo’s concerns and willingness to work on this important issue. However, there is an urgent public safety risk facing the majority of communities and Americans today that needs to be resolved, and I believe our bill, which passed the House with 321 Democratic and Republican votes, responsibly addresses the conflict between state marijuana laws and federal banking laws,” said Rep. Ed Perlmutter (D-CO), who is the lead sponsor of the SAFE Banking Act in the House. “This issue requires a pragmatic approach that takes into the account the will of voters across the country. I look forward to working with Chairman Crapo and my colleagues in the Senate as we work to resolve these differences and enact legislation to protect businesses, residents and communities.”

Legalization advocates were not pleased with the proposals.

“These guidelines are essentially gutting the intention of this bill,” National Cannabis Industry Association Director of Government Relations Michael Correia told Marijuana Moment.

“While the chairman may oppose broader cannabis policy reform, he clearly recognizes the problems created by lack of access to banking services,” he said. “The SAFE Banking Act, which has already been passed by an overwhelming bipartisan majority of the House, addresses many of the chairman’s concerns, particularly public safety and transparency. We’re happy to discuss these items with the Senate Banking Committee in a markup, but every day that goes by without addressing this particular issue results in small businesses suffering and unnecessarily puts people’s lives at risk.”

Financial services industry trade associations also reacted to the news.

“We respect Chairman Crapo’s request for additional public input on the SAFE Banking Act, and we look forward to providing the Senate Banking Committee with the information it needs,” James Ballentine, the executive vice president of congressional relations for the American Bankers Association, said in a statement. “ABA, like many other stakeholders, has already provided the committee relevant information on several of the issues identified by the chairman including legacy cash, interstate commerce and ‘Operation Chokepoint.’ We continue to believe that the SAFE Banking Act responsibly addresses the current legal limbo over cannabis banking, and a strong bipartisan majority in the House shares that view. We urge the committee to gather this information in a timely manner so the Senate can follow the House’s lead and pass legislation that will help protect communities across the country from an increasing public safety threat.”

Ryan Donovan, chief advocacy officer for the Credit Union National Association, said that his group “appreciate[s]” Crapo sharing his concerns.

“America’s credit unions are eager to continue engaging with the chairman as he seeks a solution that enhances community safety through access to mainstream financial services,” he said.

Crapo is asking interested parties to send feedback on the new proposals to [email protected], though his office did not list a date by which responses are requested.

Read Crapo’s full statement on marijuana banking below:

Chairman Crapo Outlines Concerns with Cannabis Banking Legislation

Requests feedback on potential changes to address public health and safety

WASHINGTON – Senate Banking Committee Chairman Mike Crapo (R-Idaho) is inviting public feedback on ways to address public health and money laundering concerns with cannabis banking. Input is also requested on “Operation Choke Point,” an Obama-era initiative in which federal agencies devised and relied upon a list of politically disfavored merchant categories (e.g., firearm manufacturers, payday lenders, etc.) with the intent of “choking-off” these merchants’ access to payment systems and banking services.

“I remain firmly opposed to efforts to legalize marijuana on the federal level, and I am opposed to legalization in the State of Idaho,” said Chairman Crapo. “I also do not support the SAFE Banking Act that passed in the House of Representatives. I have significant concerns that the SAFE Banking Act does not address the high level potency of marijuana, marketing tactics to children, lack of research on marijuana’s effects, and the need to prevent bad actors and cartels from using the banks to disguise ill-gotten cash to launder money into the financial system. I welcome input from all interested parties on how to thoughtfully address these concerns.”

Currently, 33 states have some form of legal marijuana for a variety of uses. This has created challenges for businesses in those states and has resulted in increased pressure for depository and financial institutions to provide financial services to both state-sanctioned businesses and ancillary services providers that may provide services to state-sanctioned businesses. The ancillary service providers offer a variety of services to state-sanctioned businesses, such as legal services, plumbing services, fertilizers and other agricultural supplies, real estate, and leasing, among many others. As a result, Senators Jeff Merkley (D-Oregon) and Cory Gardner (R-Colorado) introduced S. 1200 on April 11, 2019. While marijuana would still be illegal at the federal level, this proposed legislation seeks to provide legal certainty for banks who wish to serve not only marijuana companies, but also the ancillary service providers, meaning that banks can accept cash from legally-operating state cannabis companies and related service providers without the fear of adverse actions being taken against them by federal financial regulators.

On July 23, 2019, the Senate Banking Committee held a hearing titled, “Challenges for Cannabis and Banking: Outside Perspectives.” At the hearing, Senator Crapo discussed his concerns with the public health and safety issues surrounding marijuana; legacy cash and money laundering; FinCEN guidance and rulemaking; interstate commerce and banking; and initiatives similar to “Operation Choke Point.”

Options for addressing these concerns include, but are not limited to, the following:

    1. Add public health and safety solutions as a requirement for banks to do business with legally-operating state cannabis companies. Options to consider include THC potency; clear and conspicuous disclosures on products; marketing; effects on minors, unborn children and pregnant women; and age restrictions, among other considerations.
    2. Prevent bad actors and cartels from using legacy cash and the financial system to disguise ill-gotten cash or launder money.
    3. Update 2014 FinCEN rulemaking and guidance regarding marijuana-related businesses, and ensure FinCEN has all of the necessary tools it needs to prosecute money launderers and promulgate rulemakings.
    4. Respect state rights in interstate commerce and banking for institutions who operate in multiple states with different state rules.
    5. Eliminate “Operation Choke Point” and preventing future “Operation Choke Point” Initiatives. Under fear of retribution, many banks have stopped providing financial services to members of lawful industries for no reason other than political pressure, which takes the guise of regulatory and enforcement scrutiny.

Public feedback is requested on the following issues that include potential options for addressing concerns and questions outlined below. Interested parties may submit proposals to Committee staff at [email protected]

Issue 1: Options for addressing public health and safety concerns.

There is a lack of federal research evaluating marijuana and its effects. The National Institute on Drug Abuse has found that marijuana use significantly impairs a user’s judgment, motor skills and reaction time. Other studies have found a direct relationship between blood THC concentration and impaired driving ability. Additionally, the Surgeon General released an advisory on Marijuana’s Damaging Effects on the Developing Brain, noting that THC binds to receptors in the brain, producing a euphoria and a variety of harmful effects, including intoxication, and memory and motor impairments. The Surgeon General also noted the harmful effects of THC use during pregnancy and on young developing brains. Surgeon General Adams also released an Advisory on e-cigarette use among youth, and the recent surge in the market, which he states is a cause for great concern.

The appropriate federal agencies shall conduct a national study on the effects of marijuana and publicly report on considerations related to public health and safety of cannabis, cannabis products and their delivery mechanisms, including as it pertains to the marketing and varying potency of cannabis and cannabis products, particularly, but not limited to, minors, pregnant women and effects on unborn children. The federal government agencies, within the study, should also make recommendations on the manufacturing and marketing practices of the cannabis industry to minimize their appeal to minors and harm to minors, pregnant women and unborn children.

The studies shall include the following:

a. The types and delivery mechanisms (e.g., smoking, vaping, edibles, drinking, etc.) for all cannabis and cannabis products currently available or under development in the marketplace;

b. The potency of the cannabis and cannabis products, available in their final form, and how the potency has changed over time, including how it impacts addiction;

c. How various potencies and serving sizes may impact individuals’ health and safety, and whether different potencies and serving sizes are harmful to individuals’ health and safety, including how human physiology affects impairment, particularly as it relates to minors and pregnant women;

d. How different types of products and delivery mechanisms have affected minors’ access to cannabis and cannabis products, and how it impacts purchasing decisions over an individual’s lifetime;

e. The degree to which different levels of potency, serving sizes or consumption impair individuals’ judgment or cognitive reasoning, and trends of the prevalence of individuals operating a vehicle or machinery under the influence of cannabis; and

f. The extent to which other jurisdictions with various levels of cannabis legalization have made determinations, as reflected in law or public policy, on the health and safety effects of cannabis or cannabis products, require disclosure of potency or serving sizes, and have restricted or otherwise limited the potency of cannabis cultivated, sold, or purchased in their respective jurisdictions.

Question: Are there any other additional health considerations, other than those explicitly stated in the outline, that should be considered, and which federal agencies are most appropriate to be involved in the aforementioned study?

Considerations for addressing health and safety concerns associated with financial institutions who provide financial services to cannabis-related legitimate businesses:

a. Each state must implement clear and conspicuous disclosure of THC potency of cannabis and cannabis products (on a percentage and milligram basis in final products) through a label on the final packaged products at the point of sale. Among the contents of any state labeling requirements should be proper warnings, contaminants, potency and serving sizes, and ingredients;
b. A potency threshold of 2 percent THC content on a percentage and milligram basis in the final product;
c. The 2 percent threshold will apply until each state legislature affirmatively determines the appropriate level of THC potency for cannabis and cannabis products (on a percentage and milligram basis in final products) that appropriately addresses the health and safety risks to its citizens;
d. Preventing distribution to anyone under the age of 21;
e. Preventing the banking of edibles that are in many kid-friendly forms like candies and gummies; and
f. Preventing the banking of high potency THC vape and e-cigarette products.

Question: Are there any other additional health considerations that should be attached to the safe harbor?

Issues 2, 3: Options for addressing legacy cash and money laundering.

FinCEN Rulemaking and Guidance: Amend the Act to direct FinCEN to promulgate a rulemaking within a specified period of time, after enactment of this Act, to address issues pertaining to the provision of financial services to the marijuana industry and ancillary businesses, including Suspicious Activity Reports (SARs) and dealing with legacy cash.

FinCEN will retain meaningful oversight authority of the activities between cannabis-related legitimate businesses (CRLBs) and their financial institutions. FinCEN will be required to promulgate rulemakings and update their guidance pertaining to Bank Secrecy Act (BSA) expectations for marijuana-related businesses to address the following:

a. Requiring thorough customer due diligence standards;
b. Thorough processes and procedures to ensure funds from cannabis-related businesses and service providers are not associated with illicit activities;
c. Clearly delineating the BSA obligations of financial institutions when engaging in business with cannabis-related businesses or individuals who engage with cannabis-related businesses, including for indirect relationships such as ancillary businesses;
d. Requiring the filing of SARs in a manner that preserves FinCEN’s ability to address illicit activity; and
e. Clarifying the treatment of hemp.

Additionally, Section 7 of S. 1200 should be amended to ensure that the Federal Financial Institutions Examination Council (FFIEC) must consult with FinCEN on its development of uniform guidance and examination procedures for depository institutions as they relate to CRLBs and service providers.

Suspicious Activity Reports: Amend Section 6 of the Act regarding FinCEN’s guidance to ensure the guidance does not impair the ability of FinCEN to deter illicit activity, consistent with the rulemaking described above.

Question: In such a rulemaking, what additional requirements are needed for financial services firms to ensure that bad actors are not accessing the financial system, the sources of cash entering the financial system are fully understood and validated, Suspicious Activity Reports continue to be appropriately filed, and expectations for indirect relationships are clear commensurate with their risk?

Issue 4: Options for addressing interstate commerce and banking.

Interstate Commerce: Amend the Act to clarify that financial institutions must comply with all applicable laws related to cannabis and cannabis products in each respective state in which they operate, and ensure that nothing in the Act would facilitate interstate commerce of cannabis.

Additionally, given the tension between the state legality of cannabis and federal illegality, it should be made clear that the federal banking regulators should consult with state regulators ahead of any implementation, or give some notice.

Question: Does the bill, as drafted, facilitate interstate commerce? Should there be an explicit statement in the bill clarifying that the bill does not permit interstate commerce of marijuana?

Issue 5: Options for addressing hemp provisions and “Operation Choke Point.”

Add the following new provisions:

a. House hemp provision; and
b. The Financial Institution Customer Protection Act language included in the House-passed version of H.R. 1595, but with the following additional amendments: (1) change the term “may” to “shall”; and amend to reflect and add the following:
(1)An appropriate Federal banking agency shall not formally or informally request or order a depository institution to terminate a specific account or group of customer accounts or to otherwise restrict or discourage a depository institution from entering into or maintaining a banking relationship with a specific customer or group of customers unless –
(A) the institution is engaging in unsafe or unsound practices or violating a rule, law, regulation or other condition imposed in writing due to its relationship with the specific customer.
(B) an appropriate Federal banking agency shall not take any action under (A) with respect to a group or category of customers and shall only take action under (A) after it has made a determination in writing with respect to specific customer that the conditions set forth under (A) are satisfied.
(C) for purposes of (A), reputational risk shall constitute neither an unsafe or unsound practice nor a violation of rule, law, regulation or other condition imposed in writing.

Under (b) Notice Requirement, amend (2) to reflect the following: (2) Justification Requirement – A justification described under paragraph 1(A) should only be based on if the institution engaged in an unsafe or unsound practice or violated a rule, law, regulation or other condition imposed in writing.

Under (c) Customer Notice, add the following: (2) In the written notice and determination, the depository institution shall also provide the determination and justification for why the termination is needed, including any specific laws or regulations, or unsafe and unsound practices, the depository institution believes are being violated by the customer or group of customers.

Question: Do the proposed amendments to the Financial Institution Customer Protection Act, as passed in the House, adequately curb potential future choke point scenarios?

Additional amendments for consideration:

Studies: Strike Sections 8, 9 and 10 directing studies. Section 8 of S. 1200 requires the Federal banking regulators to issue an annual report to congress on diversity and inclusion; Section 9 of S. 1200 requires the Government Accountability Office (GAO) to conduct a study on diversity and inclusion; and Section 10 requires the GAO to conduct a study on the effectiveness of reports on suspicious transactions filed.

Preserving Regulatory Actions: Amend the Act to clarify that federal banking regulators can still take certain actions, including enforcement actions, against depository institutions, such as those actions related to poor underwriting and engaging in unsafe or unsound practices.

###

This story was updated to include reaction from advocates.

Marijuana Moment is made possible with support from readers. If you rely on our cannabis advocacy journalism to stay informed, please consider a monthly Patreon pledge.

Tom Angell is the editor of Marijuana Moment. A 20-year veteran in the cannabis law reform movement, he covers the policy and politics of marijuana. Separately, he founded the nonprofit Marijuana Majority. Previously he reported for Marijuana.com and MassRoots, and handled media relations and campaigns for Law Enforcement Against Prohibition and Students for Sensible Drug Policy. (Organization citations are for identification only and do not constitute an endorsement or partnership.)

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80 Top Law Enforcement Officials, Including A Biden Nominee, Urge SCOTUS To Hear Safe Injection Drug Case

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A coalition of 80 current and former prosecutors and law enforcement officials—including one who is President Joe Biden’s pick for U.S. attorney of Massachusetts—have filed a brief urging the Supreme Court to take up a case on the legality of establishing a safe injection facility where people can use illicit drugs in a medically supervised environment.

The nonprofit organization Safehouse was set to launch a safe consumption site in Philadelphia before being blocked by a legal challenge from the Trump administration, and it filed a petition with the nation’s highest court last month to hear the case. Now the group of law enforcement officials associated with Fair and Just Prosecution are calling on the Supreme Court to act in an amicus brief.

“Amici have an interest in this litigation because overdose prevention sites (OPSs) are among the harm reduction and public health interventions that have proven effective in preventing fatal overdoses and diverting people from unnecessary and counterproductive interactions with the justice system,” they wrote. “Amici, many of whom are currently or were previously responsible for enforcing the nation’s drug laws, also believe that the Controlled Substances Act cannot be construed to prohibit operation of a facility designed to address the most acute aspects of this public health emergency.”

If the court agrees to hear the dispute, advocates will be looking toward the Biden Justice Department and whether it will continue the federal government’s opposition to allowing supervised injection facilities. It would be a precedent-setting case that could steer policy for years to come, meaning Safehouse is taking a significant risk by pursuing the appeal of its loss in a lower court before the majority of conservative justices.

“Failing to address the loss of life resulting from drug overdoses—and criminalizing a community-based public health organization working to save lives—will further erode trust in the justice system,” the new brief states. “If there were ever a time to demonstrate that our government values the dignity of human life, that time is now.”

While President Joe Biden hasn’t weighed in directly on safe consumption sites, there’s been a theme within his administration of embracing the general concept of harm reduction for drugs. The White House Office of National Drug Control Policy (ONDCP), for example, said that “promoting harm-reduction efforts” is a first-year priority. In an overview of its objectives, the office said it intends to expand “access to evidence-based treatment,” enhance “evidence-based harm reduction efforts” and promote “access to recovery support services.”

These goals theoretically align with those of Safehouse, which wants to give people with substance use disorders a facility where medical professionals can intervene in the event of an overdose and provide people with the resources to seek recovery.

Among the signatories on the amicus brief are a former deputy assistant attorney general under Obama, district attorneys of Baltimore, Cook County, Dallas County, Los Angeles County, Manhattan, Philadelphia, San Francisco County and Seattle and the former attorneys general of Ohio, Vermont and Virginia.

But one signatory who especially stands out is Rachael Rollins, the district attorney of Suffolk County, Massachusetts who is Biden’s nominee for U.S. attorney of Massachusetts.

“As an elected prosecutor, I have a responsibility to protect every member of my community, which requires moving away from criminal justice responses to substance use disorder,” Rollins said in a press release. “Instead, we must embrace proven public health strategies as potential solutions. Lives depend on it.”

Philadelphia District Attorney Larry Krasner said the drug war “has taken too many lives already, and criminalization has only exacerbated this devastating toll.” He added: “We need a new way forward that allows communities to address the overdose crisis with harm reduction approaches proven to save lives and improve community safety.”

Fair and Justice Prosecution, the group that coordinated the amicus brief, also organized a tour of Portugal for 20 top prosecutors in 2019 so they could learn about the successful implementation of the country’s drug decriminalization law.

Safehouse won a battle in a federal district court in 2019 to proceed with the facilities. But in January, the U.S. Court of Appeals for the Third Circuit overturned the decision, ruling that permitting such facilities would violate a 1980s-era federal statute that bars organizations from running operations “for the purpose of unlawfully… using controlled substances.” That law was passed while Biden served in the Senate and helped push punitive drug policies that have had lasting consequences.

“As current and former criminal justice leaders, amici have seen first-hand how the classic ‘war on drugs’ approach to drug control—with its almost exclusive focus on aggressive criminal law enforcement—has exacerbated the overdose epidemic,” the pro-reform prosecutors and cops wrote in the new brief. “This experience confirms that no jurisdiction can arrest its way out of this public health problem. Fatal overdoses are a symptom of substance use disorder, a medical condition requiring a medical response.”

“Distorting federal drug laws to prohibit an [overdose prevention site] or to prosecute its sponsors would further undermine trust in the justice system and faith in the fair and sensible application of our drug laws. Interpreting federal criminal law to bar empirically validated harm reduction measures would make no one safer; it would only impede cooperation between law enforcement and the communities they serve.”

In its original petition to the Supreme Court in the current safe injection site case, Safehouse argued that the justices should “grant review to determine whether” federal statute really does prohibit “non-commercial, non-profit social service agencies…from establishing an overdose-prevention site that includes medically supervised consumption.”

“This question is a matter of life or death for thousands of Philadelphians and many thousands more throughout the country,” it said. “Tragically, while respondents have been pursuing this declaratory judgment against Safehouse, more than 3,200 people died in Philadelphia of drug overdoses—many of which could have been prevented if medical care had been immediately available through supervised consumption services.”

Safehouse also pointed out that Xavier Bacerra, the Biden administration’s secretary of health and human services, was among eight top state law enforcement officials who filed an earlier amicus brief in support of the organization’s safe injection site plan when he served as California’s attorney general.

The organization put the gravity of the case in no uncertain terms, painting a picture of how its proposed facility can save lives.

“When breathing stops, even a brief delay while waiting for medical help to arrive may result in an otherwise preventable overdose death or irreversible injury,” the petition says. “As a result, every second counts when responding to an opioid overdose; as more time elapses, the greater the risk of serious injury and death. Ensuring proximity to medical care and opioid reversal agents like the drug Naloxone at the time of consumption is therefore a critical component of efforts to prevent fatal opioid overdose.”

“Intervention by this Court is warranted to make clear that the federal law does not criminalize this essential public health and medical intervention designed to save lives from preventable overdose death,” it continues.

Safehouse argued that the appeals court’s interpretation of the law “eviscerates the intended boundaries of the statute and would criminalize the operation of legitimate businesses, charities, families, and good Samaritans that serve and reside with those suffering from addiction.”

If the Supreme Court were to take up the case and rule in favor of Safehouse, it could embolden advocates and lawmakers across the country to pursue the harm reduction policy.

The governor of Rhode Island signed a bill in July to establish a safe consumption site pilot program where people could test and use currently illicit drugs in a medically supervised environment. It became the first state in the country to legalize the harm reduction centers. It’s not clear whether the Department of Justice will seek to intervene to prevent the opening of such facilities in that state.

Massachusetts lawmakers advanced similar legislation last year, but it was not ultimately enacted.

A similar harm reduction bill in California, sponsored by Sen. Scott Wiener (D), was approved in the state Senate in April, but further action has been delayed until 2022.

At the same time that Safehouse is turning to the Supreme Court, it also announced recently that it will be returning the the federal district court that gave it an initial 2019 victory in support of establishing a safe injection facility before it was overturned in the appeals court.

The organization is making the unique argument that the federal government’s decision to block it from providing the service violates religious freedom by subjecting participants “to criminal penalties for exercising their sincerely held religious beliefs that they have an obligation to do everything possible to preserve life and to provide shelter and care to the vulnerable, including those suffering from addiction.”

In 2018, a congressional subcommittee approved legislation to specifically prohibit Washington D.C. from using local tax dollars to help open safe consumption facilities. But that provision was not enacted and has not been reintroduced since.

A 2020 study found that people “who reported using supervised injection facilities on an at least weekly basis had a reduced risk of dying compared to those who reported less than weekly or no use of this health service.”

Read the amicus brief from the prosecutors on the Safehouse safe injection site case below: 

Safehouse Amicus Sept 2021 by Marijuana Moment

Former GOP Congressman Who Actually Supported Marijuana Reform Enters The Cannabis Industry

Photo courtesy of Jernej Furman.

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Former GOP Congressman Who Actually Supported Marijuana Reform Enters The Cannabis Industry

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Lately it’s come to seem as if most of the former politicians who’ve entered the marijuana industry were unhelpful or downright hostile to legalization when they were in office. But on Friday, a cannabis company announced an addition to its board who disrupts that narrative: a former Republican congressman who has a consistent legislative record of cosponsoring and voting for marijuana reform measures.

The multi-state cannabis businesses Red White & Bloom Brands Inc. (RWB) is bringing on former Rep. Ryan Costello (R-PA) to help it navigate the complicated regulatory space, drawing on his experience in Congress as the company works to expand.

Costello certainly isn’t the only Republican lawmaker who’s made the transition from Capitol Hill to the cannabis market. But he is a rare example of a politician who actually embraced enacting marijuana policy changes while he was in power before standing to profit from the industry. The congressman cosponsored a variety of bills—including ones to shield states that legalize cannabis from federal interference—and supported several reform amendments.

“I’m looking forward to utilizing my 15+ years of service in government, the legal profession, and my familiarity with cannabis policy to be a strategic resource for RWB as it positions itself as a true market leading house of brands in the permitted U.S. marketplace,” Costello said in a press release.

This breaks with a trend that has increasingly frustrated advocates, where it seems the people most inclined to benefit from legalization are those who stood in the way in Congress. The best-known example of that is former GOP House Speaker John Boehner (R-OH), who’s faced criticism from activists over his anti-legalization record while in office before joining the board of marijuana company Acreage Holdings.

While Costello left Congress in 2019 prior to the historic House vote on a standalone bill to federally deschedule cannabis, there are plenty of examples of him supporting more modest reform proposals during his congressional tenure.

He was a cosponsor of legislation to protect state marijuana markets from federal intervention, promote cannabis research, support military veterans’ access to medical marijuana, protect banks that service state-legal cannabis businesses and legalize industrial hemp.

The congressman also voted in favor of floor amendments to shield all state marijuana programs from Justice Department intervention, allow Department of Veterans Affairs doctors to recommend medical cannabis and end hemp prohibition.

In that respect, he was a rare GOP lawmaker. While the issue is increasingly bipartisan among the public, that hasn’t been reflected in Congress. And now Costello is in a position to leverage his legislative experience to advance a marijuana business’s interests.

It’s an exception to the trend.

For example, Tom Price, the former U.S. Department of Health and Human Services (HHS) head under President Donald Trump, is serving as a member of the board of directors for a medical marijuana business in Georgia after he refused to take action to reclassify cannabis under federal law when he had the power to do so. Price consistently voted against marijuana reform measures while serving in Congress.

Former Rep. Steve Buyer (R-IN), who also has a long track record of opposing marijuana legalization efforts, joined a Canadian cannabis company’s board in 2019.

Earlier this month, a New York-based lobbying firm that’s headed by a former Republican U.S. senator announced that it is launching a practice focused on serving cannabis businesses. That former senator, Alfonse D’Amato, racked up a record of supporting the war on drugs while in office.

There is at least one other former GOP congressman who entered the cannabis space with a legislative record supporting marijuana reform. Former Rep. Dana Rohrabacher (R-CA), who championed cannabis reform while in Congress, became an advisory board member for a marijuana company after being voted out of office in 2018.

Separately, President Joe Biden’s pick to head up federal drug policy worked for a major marijuana business last year, according to his financial disclosure reports.

California Activists Cleared To Collect Signatures For Psilocybin Legalization Ballot Initiative

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Virginia Judge Jails Woman For Using Marijuana Before Testifying Against Alleged Domestic Violence Abuser

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“In the middle of a difficult (cross examination), she was detained, interrogated, arrested and removed from the courtroom.”

By Ned Oliver, Virginia Mercury

A judge in Loudoun County interrupted the testimony of the alleged victim in a felony domestic violence trial last week to question her drug use, sentencing her to 10 days in jail for contempt of court after she said she had smoked marijuana earlier in the day.

She was then “physically removed from the witness stand by multiple deputies,” according to a brief filed by the commonwealth’s attorney’s office, which supports the woman’s motion to vacate the contempt charge lodged by Circuit Court Judge James P. Fisher.

The woman, who prosecutors say did not appear intoxicated, served two days in jail before she was released on $1,000 bond, according to court records.

“In the middle of a difficult (cross examination), she was detained, interrogated, arrested and removed from the courtroom,” wrote Assistant Commonwealth’s Attorney Elena Ventura, who argued the woman was “not treated with the respect, sensitivity or dignity required by law.”

Marijuana is now legal in Virginia and prosecutors wrote in their brief that their witness was just anxious and nervous during the approximately hour and a half of testimony she provided against her partner, who was found guilty twice before of abusing her. They said Fisher’s inquiry followed “intense and assertive (defense) questioning focused on drug-addiction and infidelity.”

Prosecutors also wrote that Fisher refused to hear from detectives who had interacted with her before the trial, who they said would have testified her “behaviors were consistent with all prior interactions and that she exhibited no signs of intoxication prior to her testimony.”

But the biggest issue, the commonwealth’s attorneys office said, was that Fisher’s actions “may create a chilling effect surrounding victim willingness to testify in cases of domestic violence, an area of law already replete with victims recanting and/or refusing to cooperate, due to the extensive trauma domestic violence victims experience through the cycle of power and control, especially in cases where victims have mental health concerns, as…in the case at bar.”

Fisher, the former commonwealth’s attorney of Fauquier County and onetime chair of the county’s Republican committee, was appointed by the General Assembly to an eight-year term in 2019. Efforts to reach his office were unsuccessful and judges in Virginia rarely comment on proceedings.

It is not the first time Fisher has jailed someone in his courtroom for contempt—a step that legal observers say is unusual in Virginia.

Fisher had divorce lawyer Rachel Virk jailed overnight in January 2020 after finding her in contempt of court during a hearing in which she pressed him to clarify a ruling. The Virginia Court of Appeals dismissed her appeal of the charge on a technicality, finding that because the order jailing her was signed by the clerk of court rather than the judge, there was no jurisdiction to contest it. Virk has since filed a lawsuit against the clerk of court and sheriff, which is still pending.

Under Virginia’s summary contempt statute, a judge can immediately fine someone up to $250 and jail them for a maximum of 10 days for misbehavior, violence, threats of violence or “vile, contemptuous, or insulting language” in court.

In last week’s domestic abuse trial, the witness’ lawyers say her actions did not meet that standard. The Mercury is not identifying her because she is an alleged domestic violence victim and has not given permission to use her name.

“She did not admit to doing any illegal activity nor did she admit to being under the influence in the courtroom,” said Tom Plofchan, a Loudoun attorney who is representing her with Ryan Campbell. “There was no slurring of her words, nothing that indicated that she had taken some sort of intoxicant that affected her speech or muscular movement.”

Plofchan also questioned the timeline, noting it was an afternoon trial and there was no inquiry as to when in the morning she had used marijuana and how much she had taken.

Both parties also took issue with the way Fisher questioned the witness, noting she was never advised of her constitutional and Miranda rights and that the “independent investigation” he conducted by asking her about her drug use is barred by judicial canon.

A hearing on the motion to vacate the contempt charge is scheduled for next week.

The case has not gone unnoticed by lawmakers from the region, who called Fisher’s decision to jail a domestic abuse victim troubling.

“Just in general when dealing with domestic violence victims, there’s a history of not treating the victim with respect and dignity and we’re supposed to be protecting them first,” said Sen. Jennifer Boysko, a Democrat who represents parts of Loudoun.

Sen. Scott Surovell, D-Fairfax, an attorney, questioned whether the witness would have been treated the same way if she had said she had a beer that morning instead.

“When we passed the marijuana legalization statute, one of the things we tried to do was ensure marijuana would be treated the same as alcohol,” he said. “I think it’s important going forward that everybody remember that marijuana possession and consumption is now legal.”

The case has also garnered attention from marijuana reform advocates, who called the case emblematic of the stigmatization cannabis users continue to face.

“In 2020, Virginia ended the practice of jailing individuals for using cannabis, and in 2021 made such use explicitly legal for those age 21 and older,” said Jenn Michelle Pedini, executive director of Virginia NORML, the state chapter of the National Organization to Reform Marijuana Laws. “Yet, these changes in code do not facilitate an immediate end to the stigmatization faced by those who choose to consume cannabis, many of whom will continue to be singled out for discrimination by those still wedded to longstanding stereotypes.”

This story was first published by Virginia Mercury.

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Photo elements courtesy of rawpixel and Philip Steffan.

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