Two members of a House appropriations subcommittee pressed a top U.S. Treasury Department official on the issue of banking access for the marijuana industry on Tuesday.
At a hearing, Rep. Mark Amodei (R-NV) commented on what he described as a double standard whereby private sector cannabis businesses are put through hoops to secure bank accounts while government entities are able to deposit tax revenue from cannabis sales into federally regulated institutions and “there is no scrutiny whatsoever.”
The congressman said he generally understood why banks like Wells Fargo, which “hasn’t had a great couple of years,” would be sensitive to federal drug laws and avoid servicing state-legal cannabis businesses.
He gave another hypothetical example of a bank rejecting a “plumber, who may have done work on a rental property for the landlord, which is leased to somebody who grows or distributes King’s X,” which appeared to be a reference to a strain of cannabis called King’s Cross.
That situation is “maybe not OK,” he said.
“I’m not trying to put that all on you because Congress has to fill a void. I get that,” Amodei told Sigal Mandelker, the Treasury official testifying before the panel. “But right now, status quo is if you’re a government entity, putting your cash from marijuana in a federal depository institution, as near as I can figure, it’s just fine.”
“Why are all the private sector people being told, ‘find a way to launder your money,’ but you have the government political subdivisions are [told], ‘pay the IRS in cash?'” he asked. “As a matter of fact, some of them are overpaying them and getting Treasury checks back, so we’ve essentially laundered the money for them.”
Mandelker, the Treasury Department’s under secretary for terrorism and financial intelligence, didn’t have a specific answer to that question. Instead, she said that marijuana remains federally illegal and there’s nothing her department’s Financial Crimes Enforcement Network (FinCEN) “does or can do in this area changes that.”
“That continues to be the state of federal law,” she said. “In that context, of course, banks have to make their own decisions about risk-based decisions as we ask them to do in a variety of circumstances about what they are and aren’t willing to bank.”
“We don’t tell them what to bank. They make those decisions based on a variety of circumstances, including their concerns about whether or not engaging in certain types of banking is going to bring regulatory scrutiny on them, or alternatively, concerns that it may be involved in money laundering or other illicit activity.”
Mandelker also assured the congressman that federal guidance on marijuana banking, which was issued in 2014 to inform financial institutions about the types of suspicious activity reports they should file with regard to state-legal cannabis companies, is still in effect.
“That guidance remains in place. We haven’t changed it. We continue to review it,” she said. “But as you mentioned, this is really something I think that Congress needs to look at because nothing that we do can or does change what is prohibited under federal law.”
Later in the hearing, Rep. Charlie Crist (D-FL) brought up his state’s medical marijuana program and said that “between the economic impact and the benefit to seniors, veterans, persons with certain disability and other conditions, I think that medical marijuana is extremely important in my state.”
But because of federal law, his state’s cannabis businesses are essentially treated “like criminal enterprises that your office might have to approach,” he said.
Crist wanted to know whether it would make Mandelker’s job easier if “every dollar of every transaction were banked, traced and taxed within our banking system.”
“Would this give your department more control and oversight over illicit activities that contribute to the problem of financial crimes and money laundering?” he asked.
Again, the witness said her department didn’t have a role in setting federal laws, but she did say she knew that some banks in certain states were accepting marijuana business accounts. Those that choose to work with cannabis companies can at least adhere to the Obama-era guidelines she mentioned earlier, she said.
However, she was not prepared to comment specifically on whether giving marijuana businesses legal access to banking services would bolster the Treasury’s ability to monitor financial crimes.
“We’re happy to take that question and do additional analysis,” she said.
It might not be longer before Congress sees firsthand how expanding banking access to marijuana businesses will affect federal financial regulation, though. A bipartisan bill that would shield banks that accept marijuana accounts gained five more cosponsors on Monday, meaning that more than a quarter of the House is now officially backing the legislation.
A draft of that bill was also the subject of the first cannabis-related hearing of the 116th Congress last month.
Photo courtesy of YouTube/House Appropriations Committee.
Trump Says Marijuana Makes People “Lose IQ Points” In Secret Recording
President Trump could be heard saying that using marijuana makes people “lose IQ points” in a secretly recorded conversation released on Saturday.
“In Colorado they have more accidents,” the president said in the clip captured by Lev Parnas, an associate of Trump attorney Rudolph Giuliani, who is at the center of the Ukraine scandal that led to the president’s impeachment. “It does cause an IQ problem.”
(Marijuana Moment’s editor provides some content to Forbes via a temporary exclusive publishing license arrangement.)
Photo courtesy of YouTube/White House.
Austin Police Chief Says Marijuana Arrests Will Continue Despite City Council Vote
Chief Brian Manley said he would continue to enforce marijuana laws the day after the city council unanimously approved stopping arrests and tickets for low-level cases.
The day after the Austin City Council approved a resolution to stop arresting or ticketing people for most low-level marijuana possession offenses, the police chief made clear he had no plans to do so.
“[Marijuana] is still illegal, and we will still enforce marijuana law if we come across people smoking in the community,” Chief Brian Manley said during a news conference Friday afternoon.
Though cracking down on those in possession of small amounts of marijuana has never been a priority for the department, he said, police will continue to either issue tickets under the city’s “cite-and-release” policy or arrest people if officers “come across it.”
The difference, according to City Council member and resolution sponsor Greg Casar, is that the council’s move now guarantees those actions will come with no penalty. Tickets will be meaningless pieces of paper and any arrests will result in a quick release with no charges accepted from prosecutors, he told The Texas Tribune after the news conference.
“What has changed since yesterday is that enforcement, almost in virtually all cases, is now handing someone a piece of paper with no penalty or no court date,” Casar said.
The move by the City Council came as a direct result from Texas’ new hemp law which complicated marijuana prosecution across the state. Last summer, when lawmakers legalized hemp, they also changed the definition of marijuana from cannabis to cannabis that contains more than 0.3% THC, the psychoactive ingredient in the plant.
Many prosecutors, including those in Austin’s Travis County, now won’t accept pot cases based on look and smell alone, requiring lab testing to determine THC levels before accepting a case. Such testing is not yet available in public crime labs, though some counties and cities have spent money to obtain test results from private labs.
The council’s resolution prohibited using city funds or personnel to conduct such testing in non-felony marijuana cases. It also directed the elimination, to the furthest extent possible, of arrests or citations for cannabis possession. As Manley also noted, the resolution clarifies it can’t technically decriminalize marijuana, since that is state law.
The resolution gave the city manager until May 1 to report back to the council on how police were trained in this new resolution, and Casar said he hopes Manley reviews his policies before then.
Manley said in the news conference that he would continue to review the resolution, as well as police policies.
But, he assured, “a City Council does not have the authority to tell a police department not to enforce a state law.”
The Texas Tribune is a nonprofit, nonpartisan media organization that informs Texans — and engages with them — about public policy, politics, government and statewide issues.
Andrew Yang Wants To Legalize Psychedelic Mushrooms For Military Veterans
Andrew Yang says he wants to legalize psilocybin mushrooms for military veterans to help them combat mental health conditions such as post-traumatic stress disorder (PTSD).
During a town hall event at an Iowa college on Thursday, the 2020 Democratic presidential candidate was asked whether he would take initiative and allow veterans to access medical marijuana if elected. Yang replied he “will be so excited to be that commander-in-chief” that he would not only end federal cannabis prohibition but would go one step further by legalizing the psychedelic fungus for veterans as well.
“We need to get marijuana off of the Controlled Substances Act and legalize it at the federal level, make it freely available,” he said. “I say this because I’ve talked to hundreds of veterans and other Americans who benefit from marijuana as a pain relief treatment, and it’s much less deadly than the opiates that many, many people are using for the same conditions.”
“I’ve talked to veterans who’ve also benefited from psilocybin mushrooms,” he added. “They said it was the only thing that actually has helped combat their PTSD. I’m for legalizing psilocybin mushrooms for veterans as well. Pretty much if it’s going to help a veteran, we should make it easier, not harder, for them to get access to it.”
Yang’s drug policy reform platform is unique in that respect. While the majority of Democratic candidates support marijuana legalization, he’s pushed unique proposals such as decriminalizing possession of opioids and making psilocybin mushrooms “more freely available” for therapeutic purposes. The candidate also wants to invest federal funds in safe injection facilities where individuals can use prohibited drugs in a medically supervised environment and receive help getting into treatment.
He hasn’t gone so far as embracing the decriminalization of all drugs, as former South Bend, Indiana Mayor Pete Buttigieg has, however.
That said, Yang did signal that he’s open to legalizing and regulating “certain drugs” beyond cannabis, which he argued would disrupt international drug cartels. Rep. Tulsi Gabbard (D-HI) recently said she backs “legalizing and regulating” currently illegal controlled substances to protect public safety and combat the illicit market.
At the Iowa town hall, Yang went on to say that he’s particularly interested in legalizing marijuana, and he again pledged to “pardon everyone who’s in jail for a non-violent marijuana-related offense because they shouldn’t be in jail for something that’s frankly legal in other parts of the country.”
“And I would pardon them all on April 20, 2021, high-five them on the way out of jail and be like, ‘things got a lot better in the last year,'” he said, referencing the unofficial cannabis holiday 4/20.
Photo element courtesy of Gage Skidmore.