Advocates of expanding marijuana businesses’ access to banks are pursuing two new strategies: amending pending standalone legislation to broaden its GOP appeal as well as supporting a separate a rider on the issue that was recently attached to a large-scale appropriations bill.
While lawmakers have primarily focused on the bipartisan standalone bill, which would provide safeguards for banks that service marijuana businesses in states where it’s legal, House Democratic leaders released a new version of an annual spending package on Sunday that includes language providing similar protections.
The section in the appropriations bill states that none of the funds it appropriates “may be used to penalize a financial institution solely because the institution provides financial services to an entity that is a manufacturer, a producer, or a person that participates in any business or organized activity that involves handling marijuana, marijuana products, or marijuana proceeds, and engages in such activity” in compliance with state law.
That’s not to say that momentum behind the more focused Secure And Fair Enforcement (SAFE) Banking Act is waning. The bill cleared the House Financial Services Committee in March, and it currently has 191 cosponsors, including 23 Republicans, with a floor vote expected within the next several weeks.
Despite its sizable bipartisan appeal in the House, however, its fate in the Republican-controlled Senate has been uncertain.
For one, the chair of the Senate Banking Committee, Sen. Mike Crapo (R-ID) has declined to commit to bringing a companion bill that now has 30 lawmakers signed on to a vote, though some of his Republican colleagues recently told Marijuana Moment that the chair could well come around to giving the legislation a fair hearing. And while Senate Majority Leader Mitch McConnell (R-KY) is a strong proponent of hemp, he remains opposed to more broadly reforming federal cannabis laws.
To sweeten the deal, lawmakers are looking at adding at least two provisions: one would expand the banking protections to businesses marketing hemp and hemp-derived CBD products and the other would block regulators from going after certain businesses such as payday lenders and firearm dealers on the alleged basis that they’re common vessels for money laundering.
Politico first reported about the proposals that Rep. Ed Perlmutter (D-CO), the chief sponsor of the marijuana banking bill, is actively discussing with Republicans.
While it’s unclear why the hemp protections would be necessary considering that the crop was federally legalized and descheduled under the 2018 Farm Bill, some lawmakers have indicated that uncertainty persists in the hemp market and have sought out added assurances on top of the agriculture legislation.
McConnell, for example, recently inserted a provision securing access to federal crop insurance for hemp farmers into disaster relief funding legislation even though similar language was already included in the Farm Bill that legalized the plant last year. It’s possible that he’d be more amenable to the banking legislation if it could help ensure access to financial services for the hemp industry, which is particularly important to Kentucky.
“While it is currently legal for banks to provide services to hemp companies as a result of the recent descheduling from the Controlled Substances Act, given the uncertainty of the marketplace and stringent definition of hemp and its derivatives, it’s understandable that increased protections would lead to a more stable economic climate,” Justin Strekal, political director for NORML, told Marijuana Moment. “At the end of the day, transparency and certainty is needed, which can only be achieved through thoughtful and effective regulatory climate for both consumers and companies.”
Rep. Andy Barr (R-KY), who voted against the cannabis banking bill in committee, told Politico that if the legislation did include the hemp provision, “then that helps me get to a yes.”
During a House hearing last month, Barr pressed federal financial officials about hemp businesses’ ongoing lack of access to financial services like credit card processing.
On a similar note, Crapo is strongly supportive of preventing regulators from interfering in businesses under the Obama-era “Choke Point” initiative, which many conservatives regard as a politically motivated means of punishing certain sectors—particularly gun sellers and small-dollar lenders.
Standalone legislation to block future programs along those lines passed in a 395 to 2 House vote in 2017.
“Our goal is for SAFE Banking to be a bipartisan slam dunk in the House and build a case that the Senate can no longer ignore this legislation, or this issue,” Michael Correia, director of government relations for the National Cannabis Industry Association, told Marijuana Moment. “Successful campaigns are built on consensus and compromise, and we welcome Rep. Perlmutter’s efforts to broaden support and find a solution to this critically important safety and accountability issue.”
Another potential incentive for those on the fence about the bill comes from the Congressional Budget Office (CBO). The CBO released its score of the banking legislation last month, finding that if passed, it would end up saving the federal government millions of dollars over time.
What happens in the next few weeks and months is not set in stone. But if both or either of the proposed amendments do make their way into the legislation, it’s reasonable to assume that the numbers will shift in the bill’s favor. And if all else fails, banks could get similar reassurances that they won’t be penalized for working with marijuana businesses, at least by the Treasury Department, if the appropriations legislation is approved.
Marijuana Legalization Measure Advances One Step In South Dakota
South Dakota’s attorney general filed an official explanation of a proposed ballot measure to legalize marijuana on Friday.
While separate organizations are working to get a medical cannabis-focused initiative on the state’s 2020 ballot, activists behind this measure are hoping to incorporate recreational legalization, medical marijuana reform and hemp into one package.
Adult-use legalization would be accomplished through a constitutional amendment under the initiative, which would separately require the legislature to pass legislation creating rules for medical cannabis and hemp.
South Dakota Attorney General releases explanation on proposed constitutional amendment to legalize, regulate, and tax marijuana; to require passage of laws regarding hemp as well as laws regarding marijuana for medical use. Read it here: https://t.co/k33buSKjIJ pic.twitter.com/pEG0RxbDj9
— SD Attorney General (@SDAttorneyGen) August 16, 2019
“The constitutional amendment legalizes the possession, use, transport, and distribution of marijuana and marijuana paraphernalia by people age 21 and older. Individuals may possess or distribute one ounce or less of marijuana,” Attorney General Jason Ravnsborg (R) wrote. “Marijuana plants and marijuana produced from those plants may also be possessed under certain conditions.”
The South Dakota Department of Revenue would be responsible for issuing licenses for cannabis cultivators, manufacturers, testing facilities and retailers. Individual jurisdictions would be able to opt out of allowing such facilities in their areas.
“The Department must enact rules to implement and enforce this amendment,” the explanation states. “The amendment requires the Legislature to pass laws regarding medical use of marijuana. The amendment does not legalize hemp; it requires the Legislature to pass laws regulating the cultivation, processing, and sale of hemp.”
The initiative calls for a 15 percent excise tax on marijuana sales. That revenue would be used to fund the Department of Revenue’s implementation and regulation of the legal cannabis system, with remaining tax dollars going toward public education and the state general fund.
Ravnsborg said that judicial clarification of the amendment “may be necessary” and notes that marijuana “remains illegal under Federal law.”
The attorney general issued a similar explanation of a proposed constitutional amendment to legalize medical cannabis earlier this month.
This latest move comes one day after advocacy organization New Approach South Dakota announced that their medical marijuana initiative was certified, enabling them to begin the signature gathering process.
Several other cannabis initiatives are in the process of being certified in the state, according to the attorney general’s website. In order to place constitutional amendments on the ballot, activists must collect 33,921 valid signatures from voters.
South Dakota is one of the last remaining states in the U.S. that has not legalized marijuana for any purposes.
Photo courtesy of Brian Shamblen.
Elizabeth Warren’s Plan For Indian Tribes Includes Marijuana Legalization
Sen. Elizabeth Warren (D-MA) unveiled a plan on Friday that’s aimed at holding the federal government accountable for following through on its obligations to Native American tribes, and that includes ensuring that tribal marijuana programs are protected against federal intervention.
The plan emphasized Warren’s support for a bill she filed earlier this year that “would protect cannabis laws and policies that tribal nations adopted for themselves.”
The 2020 Democratic presidential candidate, who has faced criticism over claims of Native American heritage, pointed to federal reports showing that tribal programs generally have not received adequate funding and said it is imperative that legislation be enacted to “provide resources for housing, education, health care, self-determination, and public safety” for those communities.
To that end, Warren is planning to introduce a bill called the “Honoring Promises to Native Nations Act” alongside Rep. Deb Haaland (D-NM), co-chair of the Congressional Native American Caucus. Before filing, however, the lawmakers are soliciting input on how best to draft the legislation, and are accepting written testimony until September 30.
While the proposed legislation itself doesn’t currently include marijuana-specific provisions, a press release and blog post on the topic address the senator’s sponsorship of the Strengthening the Tenth Amendment Through Entrusting States (STATES) Act, which would allow tribal communities and states to set their own cannabis policies without Justice Department interference.
In order to provide economic opportunities to Native people, that “requires streamlining and removing unnecessary administrative barriers that impede economic growth on Tribal lands, respecting tribal jurisdiction over tribal businesses, and promoting forward-looking efforts to ensure full access to new and emerging economic opportunities.”
“For example, while not every tribe is interested in the economic opportunities associated with changing laws around marijuana, a number of Tribal Nations view cannabis as an important opportunity for economic development,” Warren’s campaign blog post states.
“I support full marijuana legalization, and have also introduced and worked on a bipartisan basis to advance the STATES Act, a proposal that would at a minimum safeguard the ability of states, territories, and Tribal Nations, to make their own marijuana policies,” she wrote.
.@RepDebHaaland & I invite feedback about this proposal & look forward to working closely with tribal nations & citizens, experts, & other stakeholders to advance legislation in Congress that honors the United States’ promises to Native peoples. https://t.co/qc1fkBGb3I
— Elizabeth Warren (@SenWarren) August 16, 2019
A separate press release on Warren’s Senate website also touts her support for the STATES Act, saying she “worked hard to ensure” that it included tribal protections.
“It’s beyond time to make good on America’s responsibilities to Native peoples, and that is why I’m working with Congresswoman Haaland to draft legislation that will ensure the federal government lives up to its obligations and will empower tribal governments to address the needs of their citizens,” Warren said of the overall tribal plan. “We look forward to working closely with tribal nations to advance legislation that honors the United States’ promises to Native peoples.”
In an email blast to her campaign list, Warren included “a set of additional ideas to uphold the federal government’s trust and treaty obligations with Tribal Nations and to empower Native communities,” which includes her marijuana proposal:
“New economic opportunities: We also need to respect tribal jurisdiction over tribal businesses and promote forward-looking efforts to ensure full access to new economic opportunities. For example, a number of Tribal Nations view cannabis as an important economic opportunity. I support full marijuana legalization and have advanced the STATES Act, a proposal that would safeguard the ability of Tribal Nations to make their own marijuana policies.”
There’s increased interest in ensuring that Native populations receive the same benefits and protections as states as it concerns cannabis legislation.
In June, the House passed a spending bill that included a rider stipulating that Native American marijuana programs couldn’t be infringed upon by the Justice Department. And a GOP representative filed a bill in March that would provide similar protections.
FBI Seeks Tips On Marijuana Industry Corruption
The Federal Bureau of Investigation (FBI) is actively seeking tips on public corruption related to the marijuana industry, it announced on Thursday.
“States require licenses to grow and sell the drug—opening the possibility for public officials to become susceptible to bribes in exchange for those licenses,” FBI Public Affairs Specialist Mollie Halpern said on a short podcast the bureau released. “The corruption is more prevalent in western states where the licensing is decentralized—meaning the level of corruption can span from the highest to the lowest level of public officials.”
(Marijuana Moment’s editor provides some content to Forbes via a temporary exclusive publishing license arrangement.)