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Lawmakers Press Treasury Official On Marijuana Business Banking Access

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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.

Federal Reserve Head Calls For Clarity On Marijuana Banking Issues

Photo courtesy of YouTube/House Appropriations Committee.

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.

Politics

New Jersey Voters Will Decide On Marijuana Legalization Next Year, Senate Leaders Say

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New Jersey lawmakers are giving up on plans to enact marijuana legalization through the legislature and are now seeking to put the question before voters on the 2020 ballot.

Senate President Steve Sweeney (D) and Senate Judiciary Committee Chairman Nicholas Scutari (D) announced on Monday that while they had “made further attempts to generate additional support in the Senate to get this done legislatively,” the “votes just aren’t there.” As a result, they filed a proposal that would allow residents to vote on legalization as a constitutional amendment.

“We are moving forward with a plan to seek voter approval to legalize adult use marijuana in New Jersey,” the leaders said in a press release. “We introduced legislation today to authorize a public referendum for a proposal that will lead to the creation of a system that allows adults to purchase and use marijuana for recreational purposes in a responsible way.”

“This initiative will bring cannabis out of the underground so that it can be controlled to ensure a safe product, strictly regulated to limit use to adults and have sales subjected to the sales tax,” they said.

The plan, which NJ.com first reported, is to have the legislature to approve the referendum proposal and get the ballot measure set for a vote in the general election next November. Sweeney and Scutari said they are “confident it will be approved by the Senate, the Assembly and the voters.”

“We will now move forward with a plan that helps correct social and legal injustices that have had a discriminatory impact on communities of color,” they said. “We can make real progress towards social justice at the same time that cannabis is made safe and legal.”

Gov. Phil Murphy (D) said he is “disappointed that we are not able to get this done legislatively and that our failed status quo—which sends roughly 600 people to jail a week for possession, the majority of them people of color—will continue.”

“However, I have faith that the people of New Jersey will put us on the right side of history when they vote next November,” he said. “By approving this ballot measure before the end of this legislative session, New Jersey will move one step closer to righting a historical wrong and achieving what I have spent more than three years advocating for.”

After months of negotiation, it became apparent that that progress wasn’t going to happen legislatively in the short-term, with Sweeney indicating as early as May that legalization would likely have to be decided through a voter referendum.

Text of the resolution calling for a referendum doesn’t offer many details about what the proposed legal cannabis market would look like; rather it generally describes a system allowing adults 21 and older to use and purchase marijuana from authorized retail facilities. The state’s Cannabis Regulatory Commission would be responsible for regulating the program. And cannabis sales would be subject to the state sales tax, with no additional excise tax added.

As written, the draft ballot question is worded somewhat confusingly. Voters would be asked: “Do you approve amending the Constitution to legalize a controlled form of marijuana called ‘cannabis’?”

“Only adults at least 21 years of age could use cannabis,” it continues. “The State commission created to oversee the State’s medical cannabis program would also oversee the new, personal use cannabis market. Retail sales of cannabis products in this new market would be subject to the State’s sales tax, and no other form of tax.”

Assembly Speaker Craig Coughlin (D) said in a press release that his chamber “will vote on legislation to put an adult-use cannabis question before the voters.”

“We plan to pass the measure this year and next in order for New Jerseyans to have the opportunity to make the decision in November 2020 when we expect voter turnout to be high due to the presidential election,” he said.

Prohibitionist group Smart Approaches to Marijuana celebrated news of the legislature abandoning plans to pursue legalization legislatively this session and said it would invest resources into a campaign to dissuade voters from supporting the proposed ballot initiative.

While adult-use legalization hasn’t panned out as advocates hoped, Murphy did sign a bill significantly expanding the state’s medical cannabis program in July. Sweeney had pointed to that reform move as one reason legalization negotiations stalled.

It’s not clear how the ballot approach is going to impact discussions about regionally coordinating legalization plans in the Northeast, which has been ongoing since New York Gov. Andrew Cuomo (D) and Connecticut Gov. Ned Lamont (D) met to talk about the issue over the summer.

During a joint meeting of governors from around the region last month, Murphy said that “doing things in an intelligent, coordinated, harmonious way is good for the entirety of not just our states but our residents” and emphasized the need for social justice components in a legal cannabis market.

Read the text of the New Jersey marijuana legalization referendum resolution below:

NJ Marijuana Ballot Bill by Marijuana Moment on Scribd

Sanders Pledges Legal Marijuana ‘In Every State’ As Biden Faces ‘Gateway Drug’ Backlash

This story has been updated to include comments from the governor and assembly speaker.

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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Sanders Pledges Legal Marijuana ‘In Every State’ As Biden Faces ‘Gateway Drug’ Backlash

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As former Vice President Joe Biden faces a backlash over his suggestion that marijuana could be a ‘gateway’ drug, rival presidential candidates such as Sens. Bernie Sanders (I-VT) and Kamala Harris (D-CA), as well as entrepreneur Andrew Yang, are touting their own support for cannabis reform proposals

One day after Biden said he doesn’t support national cannabis legalization because there’s “not nearly been enough evidence that has been acquired as to whether or not it is a gateway drug,” Sanders offered a competing vision, emphasizing in a speech that he wants to “make marijuana legal in every state in the country,” rather than allow prohibition to continue in certain states.

The senator also discussed other elements of a cannabis reform plan he released last month, including his pledge to “expunge the records of those arrested for possession of marijuana” and provide funding to promote participation in the legal industry by individuals from communities most impacted by the war on drugs.

“It sounds unfair that when we legalize marijuana, you end up having a handful of corporations controlling that industry,” Sanders said during the Sunday event in Las Vegas. “We have built into our criminal justice program an effort to provide many billions of dollars in help to people in the African-American community, Latino community, other communities, the people who have been hit the hardest by the war on drugs, to help them profit off a legal marijuana system.”

Watch Sanders’s marijuana comments, around 33:00 into the video below: 

Sanders described his three-step plan to prevent large corporations from controlling the cannabis market during an interview on Showtime’s Desus & Mero last month.

Separately, he took to Twitter on Sunday to highlight new polling showing that a majority of Americans support legalizing marijuana.

Meanwhile, Harris also appeared to take a direct hit at Biden over his “gateway drug” comment, stating that the debate on that matter is already settled.

“Let’s be clear: marijuana isn’t a gateway drug and should be legalized,” she tweeted, adding that she’s glad that a bill she and House Judiciary Chairman Jerrold Nadler (D-NY) filed earlier this year to federally deschedule cannabis is scheduled for a vote in the House this week.

Harris herself has faced pushback from reform advocates and challengers who point out that the senator was involved in criminalizing cannabis consumers, and opposed legalization, during her time as a prosecutor.

Yang, for his part, presented a visual contrast to Biden on Monday, sharing photos of him smiling, surrounded by dozens of trimmed marijuana plants in an undisclosed facility.

He also wrote in a tweet that cannabis “should be legal nationwide” and linked to a campaign site page laying out his reform plan.

“It is already legal in several states, it reflects a safer approach to pain relief than opiates, and our administration of drug laws is deeply uneven and racist,” Yang said.

Biden has drawn criticism from lawmakers outside of the presidential race as well, with Rep. Earl Blumenauer (D-OR) calling him out on Monday.

“Get with the program, @JoeBiden,” the congressman, who has spearheaded Capitol Hill efforts to end federal prohibition, said. “Not only do we have legislation that would solve the issue of research, the American people overwhelmingly support legalizing cannabis—period.”

“The war on drugs has ruined countless lives,” he said. “It’s past time we end this senseless prohibition.”

AOC Calls For Decriminalizing The Use Of All Drugs

Photo courtesy of Facebook/Bernie Sanders.

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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AOC Calls For Decriminalizing The Use Of All Drugs

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Rep. Alexandria Ocasio-Cortez (D-NY) voiced support for decriminalizing the use of all drugs on Sunday.

The freshman congresswoman tweeted that drug decriminalization, as well as marijuana legalization, are “matters of public health.”

This marks a development in Ocasio-Cortez’s drug policy platform. Previously, she called for decriminalizing the use and research of psychedelics, emphasizing the therapeutic potential of the substances.

To that end, she introduced an amendment to a spending bill in June that would remove a rider that advocates argue has inhibited research into the potential therapeutic benefits of Schedule I drugs such as psilocybin and LSD. The House rejected that measure in a floor vote, however.

There’s a growing push to decriminalize the personal possession of drugs beyond cannabis. South Bend, Indiana Mayor Pete Buttigieg and Rep. Tulsi Gabbard (D-HI), both Democratic presidential candidates, are in favor of the policy. Entrepreneur Andrew Yang supports decriminalizing opioids as a means to combat the drug overdose crisis.

Ocasio-Cortez recently gave her endorsement to Sen. Bernie Sanders (I-VT). But while the senator was the first major presidential candidate to back marijuana legalization during his 2016 run, he said this year he’s “not there yet” on broader drug decriminalization. It’s not clear if the congresswoman’s role as a surrogate on his campaign will ultimately influence him to adopt the policy.

But as more candidates debate the best way forward on various drug reform proposals, with cannabis legalization being a given for almost all contenders, former Vice President Joe Biden remains several paces behind. He opposes adult-use legalization and said on Saturday that marijuana may be a gateway to other, more dangerous substances.

Biden Says Marijuana Might Be A Gateway Drug

Photo courtesy of C-SPAN.

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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