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Key Virginia Senate Committee Approves Marijuana Decriminalization Bill, While Broader Legalization Study Advances

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A key Virginia Senate committee approved a bill to decriminalize possession of marijuana on Wednesday. Meanwhile, a House panel approved separate legislation to create a joint subcommittee tasked with studying the broader legalization of cannabis production and sales in the state.

The Judiciary Committee advanced the modest decriminalization proposal in a 11-2 vote. This comes one week after the panel’s Criminal Law Subcommittee passed the bill in a voice vote.

If enacted, the measure would make simple possession a civil penalty punishable by a maximum $50 fine. Current policy stipulates that a first offense is punishable by a maximum $500 fine and up to 30 days in jail.

“Years of hard work by so many open-minded organizations and legislators have made this bill more equitable and just,” Sen. Adam Ebbin (D), the legislation’s sponsor, told Marijuana Moment. “It is time to recognize that the prohibition on cannabis has failed, and move together away from an outdated system that has disproportionately affected people of color in the Commonwealth. I look forward to continuing my years of work to ensure this bill’s passage in 2020.”

Reform advocates have mixed opinions about the proposal. The state’s ACLU chapter opposes the legislation because members feel it doesn’t go far enough to repair the damages of prohibition and leaves in place penalties that will be unfairly targeted toward communities of color.

Other advocates, including those at NORML, share that concern but support the bill as a step in the right direction that can be built upon.

“It’s well past time that public policy catch up with public opinion, and the Judiciary Committee’s swift 11-2 advancement of SB2 illustrates the legislature’s appetite for just that,” Virginia NORML Executive Director Jenn Michelle Pedini told Marijuana Moment.

In addition to removing criminal penalties for simple possession, the legislation would also raise the threshold for what can be considered “intent to distribute” from a half ounce to one ounce, and it would remove a separate definition of hashish from state law, meaning that it would be treated the same as cannabis flower.

As introduced, the bill included provisions providing for expungements for prior cannabis convictions, but those were removed during the subcommittee hearing last week because the policy is being addressed in separate legislation that is also advancing.

After clearing the Judiciary panel, the decriminalization bill next heads to the Finance Committee, where it could be further amended prior to arriving on the Senate floor.

Meanwhile, the House Rules Committee cleared a resolution that calls for the formation of a joint subcommittee to consider establishing a “Cannabis Control Commission” to regulate a commercial marijuana market, provide “regulatory guidance” for such a system, make recommendations on licensing, fees, advertising and expungement protocol and analyze existing marijuana programs in legal states.

“Virginia needs to move forward with legalization of adult usage of marijuana in a responsible manner,” Del. Steve Heretick (D), the resolution’s sponsor and the chair of the Virginia Legislative Cannabis Caucus, said. “This comprehensive study will make sure we learn from all the lessons other states have experienced and make sure we put the best practices in place to avoid any unforeseen problems. From a personal liberty, criminal justice and medical standpoint, the time has come for common sense reform of our marijuana laws.”

Pedini of Virginia NORML said that the state needs to “act swiftly and take the necessary steps to legalize and regulate the responsible adult use of cannabis, and begin undoing the harms of prohibition.”

“HJ 130 would begin that process,” they said. “Legalization will not introduce marijuana to Virginia, rather, it reflects the reality that cannabis is already here, and provides lawmakers and health and safety experts the opportunity to govern its use and sale accordingly.”

Gov. Ralph Northam (D) campaigned on decriminalization, and he included the policy change proposal in his annual State of the Commonwealth speech earlier this month, arguing that the state needs “to take an honest look at our criminal justice system to make sure we’re treating people fairly and using taxpayer dollars wisely.”

While lawmakers are currently focused on getting decriminalization approved, many expect the move to be a first step toward broader legalization—a policy changed supported by Attorney General Mark Herring (D), who is running for governor in 2021 to replace the term-limited Northam.

Last month, the attorney general hosted a cannabis summit where lawmakers heard from officials in legal marijuana states challenges and opportunities associated with implementing broad reform. Herring said his summit would provide the governor with the resources he needs to embrace comprehensive reform.

Before that summit, a Virginia lawmaker filed a legalization bill, which has been referred to the House Courts of Justice Committee.

This article has been updated to include information about additional cannabis reform legislation that was approved in a House committee.

Marijuana Tourism Will Boost Tax Revenue, Illinois Governor Says In State Of The State Speech

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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.

Kyle Jaeger is Marijuana Moment's Los Angeles-based associate editor. His work has also appeared in High Times, VICE and attn.

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GOP Senator Presses Treasury Secretary On Tax Credits For Marijuana Businesses

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A Republican senator recently pressed the head of the Treasury Department on whether marijuana businesses qualify for a federal tax benefit.

During a Senate Finance Committee hearing on Wednesday, Treasury Secretary Steven Mnuchin was asked about the “opportunity zone” tax credit, which is meant to encourage investments in “distressed,” low-income communities through benefits such as deferrals on capital gains taxes.

Sen. James Lankford (R-OK), whose state’s voters approved a medical marijuana ballot measure in 2018, told Mnuchin that businesses that derive more than five percent of their profits from things like alcohol sales are ineligible for the tax credit, but there’s “not a definition dealing with cannabis businesses.”

“Are they within that five percent amount or are they not at all because there’s a federal prohibition on cannabis sales?” the senator asked.

“I’m going to have to get back to you on the specifics,” Mnuchin replied.

“That’d be helpful to get clarity because there are cannabis businesses across the country that, if they fall in opportunity zones, they’ll need clarification on that,” Lankford said. “When you and I have spoken about it before—it’s difficult to give a federal tax benefit to something that’s against federal law.”

 

Lankford, who opposes legalization and appeared in a TV ad against his state’s medical cannabis ballot measure, has raised this issue with the Treasury secretary during at least two prior hearings. When he questioned whether cannabis businesses qualify for the program last year, he clarified that he personally does not believe they should.

While Mnuchin’s department has yet to issue guidance on the issue, he said in response to the earlier questioning that his understanding is that “it is not the intent of the opportunity zones that if there is this conflict [between state and federal marijuana laws] that has not been cleared that, for now, we should not have those businesses in the opportunity zones.”

Mnuchin has also been vocal about the need for Congress to address the lack of financial resources available to state-legal marijuana businesses. Because so many of these companies are forced to operate on a largely cash-only basis, he said the Internal Revenue Service has had to build “cash rooms” to store their tax deposits.

“There is not a Treasury solution to this. There is not a regulator solution to this,” he said during one hearing. “If this is something that Congress wants to look at on a bipartisan basis, I’d encourage you to do this. This is something where there is a conflict between federal and state law that we and the regulators have no way of dealing with.”

Last week’s Finance Committee hearing was centered around President Trump’s Fiscal Year 2021 budget request, which separately includes a provision calling for the elimination of an appropriations rider that prohibits the Justice Department from using its fund to interfere in the implementation of medical cannabis laws as well as a continued block on Washington, D.C. spending its own local tax dollars to legalize marijuana sales.

American Bar Association Wants Protections For Marijuana Banking And Lawyers Working With Cannabis Clients

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American Bar Association Wants Protections For Marijuana Banking And Lawyers Working With Cannabis Clients

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The American Bar Association (ABA) approved two marijuana-related resolutions during its midyear meeting on Monday.

The group’s House of Delegates voted in favor of proposals endorsing pending federal legislation to protect banks that service cannabis businesses and calling for a clarification of rules to ensure that lawyers will not be penalized for representing clients in cases concerning state-legal marijuana activity.

Under the banking resolution, ABA “urges Congress to enact legislation to clarify and ensure that it shall not constitute a federal crime for banking and financial institutions to provide services to businesses and individuals, including attorneys, who receive compensation from the sale of state-legalized cannabis or who provide services to cannabis-related legitimate business acting in accordance with state, territorial, and tribal laws.”

ABA added that “such legislation should clarify that the proceeds from a transaction involving activities of a legitimate cannabis-related business or service provider shall not be considered proceeds from an unlawful activity solely because the transaction involves proceeds from a legitimate cannabis-related business or service provider, or because the transaction involves proceeds from legitimate cannabis-related activities.”

A bill that would accomplish this goal was approved by the House of Representatives last year, but it’s currently stalled in the Senate, where it awaits action in the Banking Committee. That panel’s chair, Sen. Mike Crapo (R-ID) is under pressure from industry stakeholders to advance the legislation, but he’s also heard from anti-legalization lawmakers who’ve thanked him for delaying the bill.

“Passage of the [Secure and Fair Enforcement] Banking Act or similar legislation will provide security for lawyers and firms acting to advise companies in the industry against having their accounts closed or deposits seized,” a report attached to the ABA resolution states. “This will also foster the rule of law by ensuring that those working in the state-legalized legitimate cannabis industry can seek counsel and help prevent money laundering and other crimes associated with off-the-books cash transactions.”

“Currently, the threat of criminal prosecution prevents most depository institutions from banking clients, including lawyers, who are in the stream of commerce of state-legalized marijuana. This Resolution is necessary to clarify that such provision of legal and other services in compliance with state law should not constitute unlawful activity pursuant to federal law.”

The second marijuana-related resolution ABA adopted on Monday asks Congress to allow attorneys to serve clients in cannabis cases without facing federal punishment.

Text of the measure states that the association “urges Congress to enact legislation to clarify and explicitly ensure that it does not constitute a violation of federal law for lawyers, acting in accord with state, territorial, and tribal ethical rules on lawyers’ professional conduct, to provide legal advice and services to clients regarding matters involving marijuana-related activities that are in compliance with state, territorial, and tribal law.”

Such a change would provide needed clarity for lawyers as more states legalize cannabis for adult use. ABA’s own rules of conduct have been a source of conflict for attorneys, as it stipulates that they “shall not counsel a client to engage, or assist a client, in conduct that the lawyer knows is criminal or fraudulent.” Federal law continues to regard marijuana as an illegal, strictly controlled substance.

An ABA report released last year made the case that there’s flexibility within that rule, however, as “it is unreasonable to prohibit a lawyer from providing advice and counsel to clients and to assist clients regarding activities permitted by relevant state or local law, including laws that allow the production, distribution, sale, and use of marijuana for medical or recreational purposes so long as the lawyer also advises the client that some such activities may violate existing federal law.”

A new report attached to the resolution states that “statutory guidance is needed that explicitly ensures that attorneys who adhere to their state ethics rules do not risk federal criminal prosecution simply for providing legal counsel to clients operating marijuana businesses in compliance with their state law.”

“This Resolution accomplishes this elegantly by harmonizing federal criminal liability with States’ ethical rules regarding the provision of advice and legal services relating to marijuana business. If a state has legalized some form of marijuana activity and explicitly permitted lawyers to provide advice and legal services relating to such state-authorized marijuana activity, such provision of advice and legal services shall not be unlawful under the Controlled Substances Act or any other federal law.”

Last year, ABA adopted another cannabis resolution—arguing that states should be allowed to set their own marijuana policies.

Border Patrol Union Head Admits Legalizing Marijuana Forces Cartels Out Of The Market

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Border Patrol Union Head Admits Legalizing Marijuana Forces Cartels Out Of The Market

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The head of the labor union that represents U.S. Border Patrol agents acknowledged on Friday that states that legalize marijuana are disrupting cartel activity.

While National Border Patrol Council President Brandon Judd was attempting to downplay the impact of legalization, he seemed to inadvertently make a case for the regulation all illicit drugs by arguing that cartels move away from smuggling cannabis and on to other substances when states legalize.

Judd made the remarks during an appearance on C-SPAN’s Washington Journal, where a caller said that “the states that have legalized marijuana have done more damage to the cartels than the [Drug Enforcement Administration] could ever think about doing.”

“As far as drugs go, all we do is we enforce the laws. We don’t determine what those laws are,” Judd, who is scheduled to meet with President Trump on Friday, replied. “If Congress determines that marijuana is going to be legal, then we’re not going to seize marijuana.”

“But what I will tell you is when he points out that certain states have legalized marijuana, all the cartels do is they just transition to another drug that creates more profit,” he said. “Even if you legalize marijuana, it doesn’t mean that drugs are going to stop. They’re just going to go and start smuggling the opioids, the fentanyl.”

One potential solution that Judd didn’t raise would be to legalize those other drugs to continue to remove the profit motive for cartels. Former presidential candidate Andrew Yang made a similar argument in December.

Federal data on Border Patrol drug seizures seems to substantiate the idea that cannabis legalization at the state level has reduced demand for the product from the illicit market. According to a 2018 report from the Cato Institute, these substantial declines are attributable to state-level cannabis reform efforts, which “has significantly undercut marijuana smuggling.”

Additionally, legalization seems to be helping to reduce federal marijuana trafficking prosecutions, with reports showing decreases of such cases year over year since states regulated markets have come online.

In his annual report last year, Supreme Court Chief Justice John Roberts also noted reduced federal marijuana prosecutions—another indication that the market for illegally sourced marijuana is drying up as more adults consumers are able to buy the product in legal stores.

Top Mexican Senator Says Marijuana Legalization Bill Will Be Approved This Month

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