Rep. Earl Blumenauer (D-OR) and a collection of bipartisan cosponsors filed a bill on Thursday that would provide small marijuana businesses with access to federal coronavirus relief funds that are available to companies in any other industry.
The bill—titled the Emergency Cannabis Small Business Health and Safety Act—would make marijuana firms eligible for three Small Business Administration (SBA) services: the Paycheck Protection Program, Economic Injury Disaster Loans program and Economic Injury Disaster Loans Emergency Grants program.
Currently, SBA specifically prevents marijuana businesses from receiving COVID-related relief due to federal prohibition. That also includes companies that work indirectly with the industry, such as accounting and legal firms.
To address the problem, the bill would enact provisions stipulating that a business can’t be excluded from SBA programs simply because it is a state-legal cannabis company.
“Notwithstanding any other provision of law, a business shall not be ineligible for assistance,” the legislation reads, “on the basis that the business is a cannabis-related legitimate business or a service provider.”
That text would be added to three sections related to each SBA program the congressman wants the marijuana industry to be able to access.
It also includes language protecting SBA officials from being punished for providing these services to the industry, specifying that they “may not be held liable pursuant to any Federal law or regulation solely for providing a loan or a loan guarantee to a cannabis-related legitimate business or a service provider in carrying out” the relief legislation.”
“As Congress seeks to provide relief to small businesses across America, chief among those being left out are state-legal cannabis businesses that are essential to communities and have met the demands of this crisis,” Blumenauer said in a press release. “We should include state-legal cannabis in federal COVID-19 response efforts. Without providing these businesses the relief needed to carry out the recommended public health and worker-focused measures, we are putting these hard-working people—and ourselves—at risk.”
The language of the new standalone proposal is intended to show there is a legislative pathway for including similar cannabis business provisions in future coronavirus relief bills, Blumenauer’s office told Marijuana Moment.
Rep. Ed Perlmutter (D-CO), an initial cosponsor of the bill, said that marijuana businesses “are major employers and significant contributors to local economies in Colorado and across the country” and so they “should receive the same level of support as other legal, legitimate businesses and be eligible for SBA relief funds during this COVID-19 crisis.”
Perlmutter has also been advocating for the cannabis industry behind the scenes as it concerns coronavirus relief. And he said earlier this month that he’s working to allow marijuana businesses to access banking services amid the pandemic—a proposal that he said House Speaker Nancy Pelosi (D-CA) supports.
Other initial cosponsors of the new legislation include Reps. Jason Crow (D-CO), Barbara Lee (D-CA), Peter DeFazio (D-OR), Jan Schakowsky (D-IL), Rashida Tlaib (D-MI), Don Young (R-AK), Eleanor Holmes Norton (D-DC), Joe Neguse (D-CO), Debra Haaland (D-NM), Diana DeGette (D-CO), Jared Huffman (D-CA), Suzan DelBene (D-WA), Katie Porter (D-CA), Pramila Jayapal (D-WA) and Tulsi Gabbard (D-HI).
Brandon Banks, a cannabis business owner and chair of the Minority Cannabis Business Association, told Marijuana Moment that “we are an essential service discriminated against in accessing small business administration relief.”
“This has severely impacted our ability to keep providing jobs and safe and affordable medicine to an at-risk population,” he said. “By allowing small cannabis businesses to access the same resources as other industries, we can participate in helping our nation recover from COVID both physically and economically.”
The introduction of the new bill comes one week after Blumenauer led a letter of 34 bipartisan members of the House urging leadership to include this kind of language as they craft future coronavirus-related bills.
Sens. Jacky Rosen (D-NV) and Ron Wyden (D-OR) similarly implored action to that end in a letter released on Wednesday.
“The cannabis industry employs nearly a quarter of a million Americans and has been deemed essential in state after state, yet many businesses will not survive the pandemic without help,” Aaron Smith, executive director of the National Cannabis Industry Association, said in a press release. “They already face disproportionate financial burdens during normal conditions, and the strains created by the coronavirus response are putting them at an even greater disadvantage and jeopardizing their ability to provide vital healthcare services.”
“We are incredibly grateful for the dozens of lawmakers who are urging their colleagues to give cannabis businesses fair access to federal relief funds in these difficult times,” he said.
In a letter to state treasurers that was delivered earlier this month, a coalition of marijuana industry associations urged the officials to pressure their congressional delegations to include SBA access for cannabis firms in future coronavirus legislation. They also want the states to explore providing separate loan and lending programs for the market.
Reps. Joyce Beatty (D-OH) and Joe Kennedy III (D-MA) also asked leadership last week to make it so that business owners with prior convictions, including for simple marijuana possession, aren’t disqualified from SBA’s Paycheck Protection Program.
Colorado Gov. Jared Polis (D) recently sent a letter asking a congressman from his state to take up the issue with his colleagues and ensure SBA access for the cannabis industry.
These requests demonstrate a growing desire to normalize the marijuana industry at the federal level. At the state level, cannabis businesses are already an established part of society, widely deemed essential services that can continue to operate during the pandemic.
Lawmakers are also making a different kind of COVID-related cannabis push concerning veterans access to marijuana. In a letter led by Sen. Elizabeth Warren (D-MA) last week, members of the Massachusetts congressional delegation urged the head of the U.S. Department of Veterans Affairs to allow its doctors to issue verbal recommendations for medical cannabis amid the pandemic.
Read the Emergency Cannabis Small Business Health and Safety Act below:
This piece has been updated to include a broader list of initial cosponsors.
Nine Members Of Congress Tell DEA To Revise Proposed Hemp Rule On THC Content
Nine members of Congress sent a letter to the Drug Enforcement Administration (DEA) on Tuesday, urging the agency to revise its proposed hemp regulations.
DEA released an interim final rule (IFR) for the crop in August, and it said the regulations were simply meant to comply with the 2018 Farm Bill that legalized hemp and its derivatives. But stakeholders and advocates have expressed serious concerns about certain proposals, arguing that they could put processors at risk of violating federal law and hamper the industry’s growth.
Reps. David Joyce (R-OH) and Denver Riggleman (R-VA) led the letter and pointed specifically to a provision of DEA’s IFR that could impact processing hemp extracts. The agency stipulated that “any such material that contains greater than 0.3% of Δ9-THC on a dry weight basis remains controlled in schedule I.”
That’s problematic, the lawmakers said, because in many cases the process of extracting cannabinoids from hemp temporarily causes THC levels to increase beyond that threshold. And so while Congress intended to legalize those extracts, businesses that produce the materials could find themselves inadvertently breaking the law.
I sent a letter to the @DEAHQ asking them to protect hemp producers and clarify hemp regulations.
The DEA must specify their requirements and streamline hemp directives by clarifying the legal means of processing hemp products. Read more here, #VA05:https://t.co/wGabQePrts
— Congressman Denver Riggleman (@RepRiggleman) October 21, 2020
“Our offices have received countless calls from constituents involved in the hemp industry who are extremely fearful that simply following the provisions of the Farm Bill will result in criminal liability under the IFR,” the lawmakers’ letter states. “The IFR will likely have the effect of inhibiting these nascent state hemp programs thereby harming those American companies and workers who chose to pursue careers in the hemp industry and made significant investments to effectuate those aspirations.”
Therefore, the lawmakers are “requesting a resolution to this issue as quickly as possible,” adding that “DEA must revise the IFR to eliminate the ambiguities set forth above and provide peace of mind to all Americans who have chosen to pursue a career in the hemp industry.”
Reps. Rodney Davis (R-IL), Morgan Griffith (R-VA), Glenn Grothman (R-WI), Don Young (R-AK), Anthony Gonzalez (R-OH), Earl Blumenauer (D-OR) and Matt Gaetz (R-FL) also signed the letter.
A public comment period on DEA’s proposed rules closed on Tuesday. It saw more than 3,300 submissions, many of which focused on issues with the “work in progress” hemp THC issue.
“This IFR’s criminalizes work in progress hemp extract, a fundamental component of any consumer hemp/CBD product, and will negatively impact the hemp/CBD industry at a time when financial pressure is already high,” one commenter wrote. “Hemp and subsequent extracts are not controlled substances.”
Another issue identified by more than 1,000 commenters concerns delta-8 THC. The most widely known cannabinoid is delta-9 THC, the main component responsible for creating an intoxicating effect, but delta-8 THC from hemp is also psychoactive and is an object of growing interest within the market.
Because DEA’s proposed regulations state that all “synthetically derived tetrahydrocannabinols remain schedule I controlled substances,” some feel that would directly impact the burgeoning cannabinoid, as its converted from CBD through the use of a catalyst—and that could be interpreted as a synthetic production process.
In any case, it’s not clear whether DEA deliberately crafted either of these rules with the intent of criminalizing certain hemp producers—but stakeholders and advocates aren’t taking any chances.
The U.S. Department of Agriculture (USDA) has faced separate criticism over its own proposed hemp rules, though it has been more proactive in addressing them. Following significant pushback from the industry over certain regulations it views as excessively restrictive, the agency reopened a public comment period, which also closed this month.
USDA is also planning to distribute a national survey to gain insights from thousands of hemp businesses that could inform its approach to regulating the market.
Read the congressional coalition’s letter to DEA on its hemp rule below:
Pennsylvania House Votes To Protect Medical Marijuana Patients From DUI Charges
The Pennsylvania House of Representatives approved an amendment on Tuesday that would protect medical marijuana patients from being penalized under the state’s DUI laws for using their legal medicine.
The proposal cleared the chamber as an amendment to a broader piece of legislation concerning motor vehicle policies. It passed in a 109-93 vote.
As it stands, registered medical cannabis patients can be convicted of driving under the influence of a controlled substance if THC metabolites are detected in their blood. That’s despite the fact that marijuana can remain present in the body well after someone is considered impaired.
The House-approved amendment, which is now attached to a bill previously passed by the Senate, exempts “marijuana used lawfully in accordance with” the state’s medical cannabis law from DUI statutes.
“I think that you can ask any veteran or anybody that’s using medical cannabis right now, if they took the prescription on Monday, [on] Wednesday, they’re not high,” Rep. Ed Gainey (D) said in a floor speech before the vote. “And if they got pulled over, they darned shouldn’t be charged for being intoxicated or under the influence of medical marijuana.”
Medical marijuana has helped the people of the Pennsylvania. But even if you have a medical card, you can still get a DUI even if you’re not high – if you have a trace of THC in your system. Today I fought to pass a bill that would end that. pic.twitter.com/uxj8IsuVO9
— Ed Gainey (@RepGainey) October 21, 2020
“I think we’re putting an undue burden on the people of Pennsylvania if we’re saying this is what we want to do after we fought so hard to pass medical marijuana and we know what it’s done to help the people of Pennsylvania,” he said.
The amendment is similar in intent to separate standalone legislation introduced by Sen. Camera Bartolotta (R) in June to end the “zero tolerance” DUI policy for medical marijuana.
While Pennsylvania legalized medical cannabis in 2016, with the first dispensaries opening two years later, the law has not caught up as it concerns impaired driving. A person can test positive for THC for weeks after last consuming marijuana, rendering traditional roadside tests incapable of determining active impairment.
Several legal cannabis states have enacted per se THC limits in blood, similar to blood alcohol requirements. However, evidence isn’t clear on the relationship between THC concentrations in blood and impairment.
A study published last year, for example, concluded that those who drive at the legal THC limit—which is typically between two to five nanograms of THC per milliliter of blood—were not statistically more likely to be involved in an accident compared to people who haven’t used marijuana.
Separately, the Congressional Research Service in 2019 determined that while “marijuana consumption can affect a person’s response times and motor performance… studies of the impact of marijuana consumption on a driver’s risk of being involved in a crash have produced conflicting results, with some studies finding little or no increased risk of a crash from marijuana usage.”
The modest cannabis DUI reform approved by the Pennsylvania House comes amid repeated calls from the state’s leaders to more broadly legalize marijuana for adult use.
Last week, Gov. Tom Wolf (D) in a speech stressed that marijuana reform could generate tax revenue to support the state’s economic recovery from the coronavirus pandemic and that ending criminalization is necessary for social justice.
That marked the third time in three months that the governor has held events focused on making the case for legalization. Last month, he took a dig at the Republican-controlled legislature for failing to act on reform in the previous session. And in August, he suggested that the state itself could potentially control marijuana sales rather than just license private retailers as other legalized jurisdictions have done.
Lt. Gov. John Fetterman (D), a longstanding legalization advocate, has been similarly vocal about his position. In speeches and on social media, the official has expressed frustration that Pennsylvania has yet to enact the policy change, especially as neighboring like New Jersey are moving in that direction.
He said last month that farmers in his state can grow better marijuana than people in New Jersey—and that’s one reason why Pennsylvania should expeditiously legalize cannabis before voters next door in the Garden State enact the policy change this November.
Fetterman also recently hosted a virtual forum where he got advice on how to effectively implement a cannabis system from the lieutenant governors of Illinois and Michigan, which have enacted legalization.
While Wolf initially opposed adult-use legalization, he came out in support of the reform last year after Fetterman led a statewide listening tour last year to solicit public input on the issue.
Shortly after the governor announced that he was embracing the policy change, a lawmaker filed a bill to legalize marijuana through a state-run model.
A majority of Senate Democrats sent Wolf a letter in July arguing that legislators should pursue the policy change in order to generate revenue to make up for losses resulting from the COVID-19 pandemic.
Montana Supreme Court Rejects Challenge To Marijuana Legalization Initiative
The Montana Supreme Court on Wednesday rejected a lawsuit seeking to invalidate a marijuana legalization initiative that will appear on the state’s November ballot.
With weeks before the election, opponents asked the court to quash the measure, arguing that because it involves appropriating funds, it violates state statute on citizen initiatives.
The court didn’t weigh in on the merits of the challenge; rather, it said the petitioners with the campaign Wrong for Montana (WFM) failed to demonstrate “urgency or emergency factors” that would justify moving the case into its jurisdiction instead of going through trial and appeals courts first.
It left the door open for the opponents to take its challenge through the traditional process. Brian Thompson, the attorney representing the plaintiffs, told Marijuana Moment that they now intend to file the suit in district court “soon,” but he wasn’t able to provide an exact timeline.
“We express no opinion on the merits of WFM’s constitutional challenge, nor to its right to pursue this challenge in district court,” the justices wrote. “However, WFM’s claim does not present an appropriate basis on which to invoke this Court’s original jurisdiction. Even if it did, WFM has wholly failed to establish that urgency or emergency factors make litigation in the trial courts and the normal appeal process inadequate.”
Dave Lewis, policy advisor to the pro-legalization New Approach Montana, said in a press release that this “was an easy decision for the Montana Supreme Court.”
“At best, this lawsuit was a frivolous longshot,” he said. “At worst, it was an intentional effort to create confusion right before the election.”
The measure in question would establish that adult-use marijuana system. The lawsuit did not target a separate, complementary initiative that would specify that only those 21 and older could participate in the legal market.
It is the case that state statute says citizens “may enact laws by initiative on all matters except appropriations of money and local or special laws” and that the initiative does allocate cannabis tax revenue to certain programs. But prior measures that have appeared on the state’s ballot have done so as well.
Under the proposal, half of the public revenue generated from marijuana sales would go toward environmental conservation programs—a provision that earned the campaign key endorsements last month.
The initiative is already on the ballot and voting has started, so presumably if the court had sided with the plaintiffs, the votes simply wouldn’t have been counted or implementation would have been prevented. It is also possible that a court could rule that monies raised by legal cannabis sales under the initiative would simply into the state’s general fund instead of toward the specific programs delineated in its current text.
“We’re receiving strong support from voters across the state,” Lewis, who is a former Republican state senator and former budget director for three Montana governors, said. “Instead of making a coherent argument against the initiatives, our opponents tried to deprive Montanans of their constitutional right to a citizen initiative process.”
“Our opponents are desperately throwing everything at the wall in the hope that something sticks,” he added. “They’re resorting to fear tactics and misinformation because they know that a majority of Montana voters are ready to vote yes on legalizing, regulating, and taxing marijuana for adults 21 and over.”
In neighboring Nebraska, the state Supreme Court did rule last month that a measure to legalize medical cannabis that had qualified for the November ballot could not proceed because it violated the state’s single-subject rule for ballot initiatives.
Recent polling indicates that Montana voters are positioned to approve the legalization proposal. Forty-nine percent of respondents in a survey released last week said they support the policy change, with 39 percent opposed and 10 percent remaining undecided.
This story has been updated to include comment from Thompson.
Read the Montana Supreme Court’s ruling on the marijuana challenge and the original lawsuit below: