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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.)

Politics

Missouri Marijuana Legalization Campaign In Jeopardy Due To Coronavirus

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Coronavirus has dealt another blow to the marijuana reform movement. This time, activists in Missouri announced on Saturday that their effort to put a cannabis legalization measure on the ballot has “no practical way” of succeeding amid the pandemic.

In recent weeks, the outbreak of COVID-19 has resulted in business closures and increased calls for social distancing in states across the country. That has made mass signature gathering for drug policy reform measures virtually impossible.

“Unfortunately, while there is widespread support from Missourians to tax and regulate marijuana, there is currently no practical way during the COVID-19 outbreak to safely, publicly gather the 170,000 plus signatures needed over the remaining 6 weeks to put this on the Missouri ballot in 2020,” John Payne, campaign manager for Missourians for a New Approach, said.

He added that the group is still “exploring our options at this point” but if it ultimately cannot find a path to the ballot for this November, “our supporters from every corner of this state will be back next cycle to put this on the 2022 ballot and finally bring Missouri the benefits of a safe, adult-use marijuana program.”

A total of 160,199 valid signatures from registered voters are needed in order to qualify the measure for this year’s ballot, and the campaign says it has so far collected roughly 80,000—though it is unclear how many of those have been validated. Organizers have aimed to collect more than needed in case some submissions are not accepted.

In a separate email circulated to supporters earlier on Saturday, Dan Viets, coordinator for Missouri NORML and an advisory board member for Missourians for a New Approach, said the “status of the effort to legalize adult use of marijuana in Missouri this year is unclear.”

“No official decision has yet been made regarding whether to suspend the campaign,” he said. “If we do so, it is likely we will return to pursue this goal in 2022.”

“It is, of course, virtually impossible to effectively gather signatures on petitions given the response to the coronavirus pandemic. Gatherings of more than a very few people in any one place have been banned. Almost all colleges and universities have switched to online teaching. No large meetings, conferences, or other gatherings are taking place. We should know within a very short time whether the campaign will be continuing this year or not.”

The language of the campaign messages indicates that activists aren’t entirely throwing in the towel just yet. But that’s a change of tone compared to a message sent to key organizers earlier this month by Graham Boyd, director of the national New Approach PAC, which has been a chief funder of the Missouri effort.

Boyd wrote in the March 17 email obtained by Marijuana Moment that after “much deliberation, we’re making the very difficult, but ultimately unavoidable, decision to end our 2020 adult-use legalization effort in Missouri.”

“As you can imagine, the onset of the coronavirus situation has made that already difficult process essentially impossible,” he said at the time, adding that after discussing the issue with reform campaigns in other states, it “seems likely that the situation will get much worse in many more states before it gets better.”

Since then, organizers have worked to try to salvage the effort.

Activists officially started signature gathering for the Missouri campaign in January, and they were optimistic that voters in the state would embrace the reform move. The proposed initiative would allow adults 21 and older possess and purchase cannabis from licensed retailers and cultivate up to three plants for personal use.

Additionally, it would impose a 15 percent tax on marijuana sales, with revenue going toward veterans services, substance misuse treatment and infrastructure projects. Individuals with cannabis convictions would be empowered to petition for resentencing or expungements.

Boyd stressed in his email that cancelling the campaign would be a “temporary setback” and that it’s “clear from the work and polling we’ve done so far that voters in Missouri are ready to approve a marijuana legalization law.”

Beyond Missouri, coronavirus has already proven to be a formidable presence in 2020 politics, with multiple drug policy reform campaigns having been impacted by the public health crisis.

Activists in California recently released a video asking California officials to allow digital signatures for a petition to revise the state’s adult-use marijuana program. In Washington, D.C., advocates for a measure to decriminalize psychedelics similarly wrote to the mayor and local lawmakers, imploring them to accept online signatures for their ballot petition.

Another California campaign to legalize psilocybin mushrooms is struggling and asking for electronic signature gathering to qualify for the ballot. An effort to legalize medical cannabis in Nebraska is facing similar signature gathering challenges.

In Oregon, advocates for a measure to decriminalize drug possession and a separate initiative to legalize psilocybin for therapeutic purposes have suspended in-person campaign events amid the pandemic.

Arizona activists shared some more positive news this week, however, announcing that they have collected more than enough signatures to qualify for the state’s November ballot—though they have not yet been submitted to or verified by the state.

Arizona Marijuana Activists Have More Than Enough Signatures To Put Legalization On Ballot, They Say

Photo courtesy of Philip Steffan.

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.
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Scientists Sue DEA Over Alleged ‘Secret’ Document That Delayed Marijuana Research Expansion

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The Drug Enforcement Administration (DEA) is finding itself in court over marijuana again after scientists filed a lawsuit against the agency, requesting “secret” documents that they allege DEA used to delay action on expanding cannabis research.

The Scottsdale Research Institute (SRI) is behind the suit. It’s one of more than 30 organizations that have submitted applications to DEA to become licensed cannabis manufacturers for research purposes.

Some background should be noted: In 2016, DEA announced it would expand marijuana research by approving additional growers beyond the sole source that has existed for half a century at the University of Mississippi. But after more than three years, applicants heard silence, and SRI filed an initial lawsuit alleging that the agency was deliberately holding up the process. A court mandated that it take steps to make good on its promise, and that case was dropped after DEA provided a status update.

This month, DEA finally unveiled a revised rule change proposal that it said was necessary due to the high volume of applicants and to address potential complications related to international treaties to which the U.S. is a party. A public comment period is now open, after which point the agency says it will finally approve an unspecified number of additional growers.

But what really accounted for the delay?

According to the plaintiffs in this new suit, after DEA said it would accept more cultivators, the Justice Department’s Office of Legal Counsel (OLC) secretly issued an opinion that interprets international treaty obligations as making it impossible to carry out the 2016 proposed rule while maintaining compliance.

The new revised rule aims to address the problem, in part by shifting jurisdiction over the cannabis to a single agency, DEA, which would purchase and technically own all of the cannabis grown by approved cultivators, and would then later sell the product directly to researchers.

That OLC document, which is not public, is the basis of SRI’s Freedom of Information Act (FOIA) complaint. The case was filed with the U.S. District Court for the District of Arizona on Wednesday and requests that the Justice Department be found guilty of unlawfully failing to make records available related to its interpretation of the Single Convention treaty, including the OLC opinion. It further states that DEA should release those documents and pay the plaintiff’s attorney fees.

Matt Zorn, an attorney working the case, told Marijuana Moment in a phone interview that it’s not clear what’s contained in the OLC opinion and that the uncertainty is “entirely the point” of the suit.

“I think we all know vaguely what it says—the subject matter of it—but we don’t know what it actually says,” he said. “That’s important because you need to know what that instruction was or what their interpretation of the law is to assess whether what they’re doing now is appropriate.”

The suit claims that SRI, “as a non-commercial company dedicated to advancing the state of medical care through clinical research, is directly harmed by this unlawful secrecy.”

“Because Defendants have failed to fully disclose their re-interpretation of federal law and treaty obligations as the law requires, Plaintiff lacks information necessary to protect its legal rights, including the right to have its application to manufacture marijuana for research processed in compliance with the Administrative Procedure Act and the [Controlled Substances Act],” the filing states.

SRI’s research objective for cannabis is to determine potential therapeutic benefits for veterans suffering from conditions such as post-traumatic stress disorder. “While DEA’s unlawful and dilatory conduct harms the public generally, the secrecy and delay have been especially harmful to our nations’ veterans,” the suit says.

“We deserve not only to know the scientific truth about medical marijuana use, but candor from our government, which includes disclosure of the ‘secret law’ the agency continues to rely on as a basis to delay and ultimately revamp the process for researching and manufacturing marijuana in this country,” the filing says. “Plaintiff brings this FOIA action so can understand the legal basis—if there is one—for the government’s conduct surrounding the Growers Program.”

While SRI acknowledged that DEA last week announced its revised rule change proposal, the suit states that the explanation about how it arrived at its determination “leaves Plaintiff and the public in the dark with respect to several critical considerations.” For example, it alleges, the notice doesn’t account for how the Justice Department advised the agency on the matter and which parts of the amended proposal would make the action compliant with international treaties.

“The answer to these questions and others presumably lies in the undisclosed OLC Opinion and related records that animated DOJ’s decision to sideline the Growers Program and prompted DEA to embark on this notice-and-comment rulemaking in the first place… In sum, using a secret OLC Opinion interpreting the CSA and a 1961 international treaty, DEA delayed processing applications to cultivate marijuana for research and now proposes to radically revamp federal law through rulemaking—rules which will loom large over the future of medical marijuana research, manufacture, and distribution going forward.”

The plaintiffs argue that DEA violated federal statute that prohibits the creation of a “secret law.” The statute says that federal agencies must make records—including final opinions and policy interpretations not published in the Federal Register—public.

“To block the Growers Program, DOJ formulated—through the OLC Opinion and related records—and DEA adopted to an undisclosed interpretation of the Single Convention and federal law contrary to the view espoused and published by DEA in the August 2016 Policy Statement, and contrary to the view of the State Department,” it continues, apparently referencing a letter the State Department sent to a senator in response to questions about the role of international treaties as it concerns expanding cannabis cultivation facilities.

In that letter, the department said nothing about the Single Convention prevents member nations from increasing the number of such facilities. “If a party to the Single Convention issued multiple licenses for the cultivation of cannabis for medical and scientific purposes, that fact alone would not be a sufficient basis to conclude that the party was acting in contravention of the Convention,” it read.

Read the State Department’s responses on international treaties and marijuana below:

State Dept Response on Single Convention by Marijuana Moment on Scribd

If the new lawsuit’s allegations prove accurate, it could help explain the role of former Attorney General Jeff Sessions, the anti-marijuana official who was reportedly involved in blocking research expansion.

The suit, which was first reported by Politico, goes on to say:

“For more than three years, Defendants relied on this undisclosed interpretation, contained in the OLC Opinion and related records, to make an end-run around the Administrative Procedure Act by unlawfully withholding and unreasonably delaying agency action on marijuana cultivation applications. The OLC Opinion has guided DEA’s actions—and its inaction… The government’s unlawful conduct under FOIA prevents Plaintiff and those similarly situated from timely and effectively vindicating legal rights under the Administrative Procedure Act, effectively rendering its protections and judicial review provisions meaningless.”

To resolve the issue, SRI said it wants DEA to be held accountable for violating federal law, release the documents and compensate them for the legal action. While this is a FOIA-related suit, the institute didn’t first seek the documents through a standard document request but instead filed the case under the law’s “Reading Room provision” that allows courts to force federal agencies to put records online, according to a Ninth Circuit ruling last year.

Sue Sisley, a researcher with SRI, told Marijuana Moment that the institute has generally had a good relationship with DEA over the years and doesn’t expect that it would unduly deny their application in retaliation for the institute’s repeated legal actions against the agency.

“I couldn’t fathom that that would happen, but I hope that the merits of our application are so clear that it would carry us forward,” she said. However, these licensing agreements are “not always a merit-based process so it is possible that if politics get deeply involved here that there could be a situation where licenses are awarded to friends of the government. We’re still praying that there is some merit-based system.”

Researchers and lawmakers have made clear that the current availability of federally authorized cannabis for research raises questions about the accuracy of tests that rely on it, as the quality is insufficient. As of now, there’s only one facility at the University of Mississippi that’s authorized to grow cannabis for researchers. The products developed at the university have been widely criticized by scientists and lawmakers. A study indicated that the facility’s cannabis is chemically more similar to hemp than marijuana available in state-legal markets.

“If adopted, these proposed rules would radically overhaul how medical marijuana manufacture and research will proceed in this country,” the plaintiffs wrote. “Better supply is needed for better research, and better research is needed not only because millions use medical marijuana every day, but also to facilitate informed policymaking at the federal and state levels, including legislation and drug scheduling decisions.”

Read the full lawsuit against DEA below:

SRI FOIA Complaint by Marijuana Moment on Scribd

Federal Agency Touts Hemp Progress While Refusing To Serve Marijuana Businesses

Photo courtesy of Mike Latimer.

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First Legal Marijuana Home Deliveries Begin In Colorado

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For the first time, people in Colorado will be able to legally have marijuana products delivered directly to their homes starting on Friday.

The launch of the limited program focused on medical cannabis patients comes one week after the dispensary chain Native Roots announced that its Boulder location The Dandelion had received the state’s first marijuana delivery license. And while the license wasn’t related to the coronavirus outbreak, the timing is opportune, as officials have increasingly cautioned against leaving home to avoid catching or spreading the virus.

The delivery service will be limited to patients living in either Boulder or Superior. They must also be registered with the dispensary, and those who are not already signed up must do so in-person for the time being—though Native Roots said it is “looking into a compliant, remote solution for patient registration.”

Native Roots said there is a $100 minimum purchase, and they’re encouraging patients to pay with a debit card rather than cash, presumably because drivers could be targets of burglaries if they’re transporting large amounts of cash or because of concerns that money changing hands could further the spread of COVID-19.

Cannabis delivery services are a new feature of Colorado’s legal marijuana program. Gov. Jared Polis (D) signed legislation last year allowing the option, though individuals jurisdictions must proactively opt-in, so as of now that number of cities permitting deliveries is limited. Native Roots said it’s been engaging with local governments about the issue for months.

Deliveries for recreational cannabis consumers won’t begin until January 2021 under the law.

As more businesses shutter as a result of the pandemic, there’s growing demand for alternative means of obtaining marijuana products, and several states have taken steps to address that concern by encouraging deliveries and curbside pickup, for example.

For patients and reform advocates, that represents an ideal solution compared to closing dispensaries altogether. Numerous legal states have categorized cannabis shops as essential services that are exempt from mandates to close down. And according to a poll released this week, a majority of Americans agree with that decision.

But while the market remains largely operational in the midst of this health crisis, reform advocates across the U.S. are feeling the impact and struggling to continue campaign activities, including in-person signature gathering.

Campaigns to change state marijuana programslegalize psilocybin mushroomslegalize psilocybin for therapeutic purposeslegalize medical and recreational cannabisdecriminalize psychedelics and broadly decriminalize drug possession have all faced challenges amid the pandemic, and several have implored officials to allow electronic signature gathering to overcome the barrier.

An exception to this appears to be Arizona, where activists recently said they’ve collected more than enough signatures at this point to qualify for the state’s November ballot.

Arizona Marijuana Activists Have More Than Enough Signatures To Put Legalization On Ballot, They Say

Photo courtesy of Philip Steffan.

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