Connect with us

Business

Marijuana Banking Bill Approved By Congressional Committee

Published

on

A congressional committee voted on Thursday to approve legislation aimed at increasing marijuana businesses’ access to banks.

Following multiple days of lengthy debate and consideration of several amendments, the House Financial Services Committee voted 45 to 15 to advance the legislation to the full body.

Floor action has not yet been scheduled, but cannabis reform advocates are hopeful that the committee approval of the banking bill is a sign Democrats are ready to move broad marijuana reforms this year.

Indeed, House Rules Committee Chairman James McGovern (D-MA) said in a radio interview on Wednesday that he expects the chamber to vote on legislation to end federal marijuana prohibition within a matter of “weeks.”

“We will guide it to the House floor for a vote, which I think it will pass with an overwhelming vote—Democrats and I think a lot of Republicans as well,” he said. “If we have a strong bipartisan vote that will increase the pressure on the Senate to do something.”

All of the party’s major 2020 presidential candidates now support outright legalization, as do a majority of its voters, according to polls.

The banking bill “addresses an urgent public safety concern for legitimate businesses that currently have no recourse but to operate with just cash,” Chairwoman Maxine Waters (D-CA) said at the start of the committee’s proceedings, which began on Tuesday and carried over through a second Wednesday meeting to votes on Thursday morning.

“However, I also consider this bill as part of a holistic approach toward providing criminal justice reform to those who have been harmed by criminalization of marijuana, and should not by any means be the only bill the House takes up on the important issue of cannabis reform,” she said.

While some surveys also show that a smaller majority of GOP voters back ending cannabis prohibition, Republican lawmakers in Congress had blocked marijuana amendments from even being considered over the course of the past several years during their House majority.

Last week, top Republicans on the Financial Services Committee requested that Waters delay the vote on the banking legislation, writing in a letter that they had several “unanswered questions” about the measure.

“Some on my side support the measure as written. Many oppose it,” Rep. Patrick McHenry (R-NC), the panel’s top Republican, said in his opening remarks at the committee meeting. “Most important for this committee, we need to ensure that we’re doing our due diligence before proceeding. One committee hearing is not enough to fully understand the consequences of this bill. It is a massive change in federal policy.”

That the vote went ahead over GOP objections is a sign that the effective marijuana roadblock on Capitol Hill has been lifted by the chamber’s new Democratic majority.

Under the approved bill, federal banking regulators would not be able to punish financial institutions just because they work with marijuana businesses that are legal under state or local laws, or those of an Indian tribe.

Currently, while a growing number of banks are opening accounts for cannabis businesses as more state policies change, many remain reluctant to do so out of fear of violating federal money laundering or drug laws. As a result, many marijuana growers, processors and sellers are forced to operate on a cash-only basis, which can make them targets for robberies.

The legislation approved by the committee, the Secure And Fair Enforcement (SAFE) Banking Act, currently has 152 cosponsors—more than a third of the entire House, which is far more support than any previous standalone cannabis bill has earned. Twelve Republicans have cosponsored the legislation.

The SAFE Banking Act’s approval by the financial services panel is only the third time in history that a standalone marijuana reform bill has cleared a congressional committee. Last year, other committees voted to advance legislation encouraging the Department of Veterans Affairs to study medical cannabis and to require the Department of Justice to license additional growers of marijuana for research, but those proposals never made it to the House floor for action.

“It is our job to address this and no longer ignore it. I have brought this legislation up for six years,” Rep. Ed Perlmutter (D-CO), the SAFE Banking Act’s lead sponsor, said prior to the vote. “The people of this country sort of took it into their own hands, state by state, to pass initiative for medical marijuana or for cannabis oil or fully legal.”

Committee Acts On Amendments

Prior to voting to advance the bill to the House floor, the committee took action on a number of proposed changes to the legislation.

Perlmutter put forth an amendment to his own bill, which was adopted via a voice vote. In addition to clarifying the definition of the financial services that are covered by the bill and specifying that its provisions would protect Federal Reserve banks, new additions would require the federal government to study diversity and inclusion in the marijuana industry—a key concern of legalization advocates seeking to undo the damage of the war on drugs, which has been waged in a racially disproportionate manner.

The new language would require federal financial regulators to publish annual reports tracking “information and data on the availability of access to financial services for minority-owned and women-owned cannabis-related legitimate businesses” and to issue “regulatory or legislative recommendations for expanding access to financial services” for those populations.

In addition, the amended bill directs that the Government Accountability Office to conduct a study “on the barriers to marketplace entry, including in the licensing process, and the access to financial services for potential and existing minority-owned and women-owned cannabis-related legitimate businesses.”

Also during the committee markup, Rep. Katie Porter (D-CA) moved a separate amendment that would extend protections to so-called “de novo” banking institutions that are seeking charters or master accounts from a Federal Reserve bank. It was adopted via a voice vote.

Rep. Steve Stivers (R-OH), one of the bill’s lead Republican cosponsors, filed an amendment expanding the legislation’s protections to insurance companies. It too was passed in a voice vote.

An amendment from Rep. Scott Tipton (R-CO) directs the Government Accountability Office to study previous reports that banks are required to file on their marijuana business customers to understand how effective they are in identifying bad actors. It was supported by the bill’s sponsors and approved on a voice vote.

Tipton filed an another amendment aimed at making sure drug cartels and organized crime networks aren’t able to benefit from the bill’s provisions, but he withdrew it instead of forcing a vote.

Rep. Bill Huizenga (R-MI) moved to delay the bill’s effective date until marijuana is federally descheduled, but withdrew the amendment rather than force a vote.

Rep. Blaine Luetkemeyer (R-MO) sought to attach an amendment that would add “legal entities operating in accordance with federal law” to those covered by the bill. In introducing the measure, he made reference to prior federal investigations of banks working with firearms dealers and payday lenders. It was ruled non-germane, however.

Rep. Andy Barr (R-KY) filed an amendment that would have delayed the bill’s enactment until the Treasury secretary certifies it wouldn’t leave any financial institution more susceptible to illicit financial activity and money laundering, and that it doesn’t inhibit their ability to comply with federal regulations. It was defeated in a voice vote and then again in roll call vote by a margin of 33 to 27.

Another Barr amendment would have restricted the bill’s reach to only protect hemp businesses instead of those that deal with marijuana. It also lost on both a voice vote and a recorded vote. The latter went down 42 to 18.

An amendment from Rep. John Rose (R-TN) would have required banks to attest that they have internal controls ensuring that no funds have been deposited in their institutions that are associated with illegal organizations. It too was rejected in voice and roll call votes, with the latter tallying 33 to 27.

A second Huizenga amendment would have postponed enactment until federal financial regulators are able to issue guidance to banks. It was rejected with a voice vote, and a roll call was requested, which came out 35 against to 25 for.

Rep. Sean Duffy (R-WI) offered an amendment to withdraw the bill’s protections from banks that serve marijuana businesses located within 1,000 feet of schools, youth centers, public parks, child care facilities, public housing, civic centers or designated drug-free zones. It was rejected via a voice vote, and then in a roll call vote by a margin of 34 to 26.

During the broader debate on the bill, Rep. Denny Heck (D-WA), who along with Perlmutter is a leading sponsor of the proposal, spoke about a Colorado marijuana dispensary security guard who was killed during an attempted robbery as an example of the public safety harms of blocking banking access. He added that allowing cannabis industry operators to store their profits in regulated financial institutions would “enhance supervision and audibility of marijuana businesses.”

Banking Is Just The First Step For Federal Marijuana Reform

The banking legislation, which was the subject of a separate lengthy committee hearing last month, is seen by advocates as just the first step in an ambitious cannabis reform agenda they want the Democratic House to pass this year. Several more far-reaching bills to change marijuana’s legal status so that states can implement their own policies without the looming threat of federal interference have not yet been scheduled for hearings. Other pending proposals seek to address medical cannabis access by military veterans, the removal of roadblocks to research and tax rates for marijuana firms.

“Congress must take the long view that all these efforts—and I will work to ensure that when it comes to passing [the banking bill] that the House does not take a ‘one and done’ approach but that we will also comprehensively work, especially with our colleagues on the Judiciary Committee, on a series of marijuana related reforms,” Waters, the Financial Services Committee chair, said prior to the vote.

Rep. Nydia Velazquez (D-NY) said at the Wednesday meeting that she will be exploring ways to expand credit opportunities for marijuana businesses, particularly those owned by women and minorities, in her role as chair of the House Small Business Committee.

Late last year, Rep. Earl Blumenauer (D-OR) authored a “blueprint” memo that lays out a step-by-step process Democratic leaders could take to federally legalize marijuana by the end of 2019. Passing a banking bill is a key part of his plan.

“This is a historic and critical step forward for the nation’s burgeoning cannabis industry. Lawmakers seem to recognize the urgency and public safety implications of ensuring cannabis businesses can access banking services,” Steve Hawkins, executive director of the Marijuana Policy Project, said in a press release. “Regardless of where members stand on legalization, they can agree that it is in the public interest to make banking available to cannabis businesses in states where it is legal.”

NORML Political Director Justin Strekal also praised the committee’s action.

“This is a positive step forward to address an untenable tension between state-legal cannabis marketplaces and federal marijuana prohibition,” he said. “Ultimately, the banking issue is just one symptom of the toxic and cruel policy of federal marijuana criminalization. In order to truly bring the vibrant marijuana economy out of the shadows, actions need to be taken by Congress to end federal prohibition and the discrimination that comes with this failed policy.”

Sens. Jeff Merkley (D-OR) and Cory Gardner (R-CO) are expected to file companion legislation on access to financial services for marijuana businesses in the Senate soon. A prior bill during the last Congress garnered 20 cosponsors in the chamber but did not receive a hearing or vote.

This piece was first published by Forbes.

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.

Tom Angell is the editor of Marijuana Moment. A 20-year veteran in the cannabis law reform movement, he covers the policy and politics of marijuana. Separately, he founded the nonprofit Marijuana Majority. Previously he reported for Marijuana.com and MassRoots, and handled media relations and campaigns for Law Enforcement Against Prohibition and Students for Sensible Drug Policy. (Organization citations are for identification only and do not constitute an endorsement or partnership.)

Business

Illinois Gets More Tax Revenue From Marijuana Than Alcohol, State Says

Published

on

Illinois took in more tax dollars from marijuana than alcohol for the first time last quarter, according to the state Department of Revenue.

From January to March, Illinois generated about $86,537,000 in adult-use marijuana tax revenue, compared to $72,281,000 from liquor sales.

Those following the cannabis market in Illinois might not be entirely surprised, as the state has consistently been reporting record-breaking sales, even amid the pandemic. In March alone, adults spent $109,149,355 on recreational cannabis products—the largest single month of sales since retailers opened shop.

Via Illinois Department of Revenue.

It was in February that monthly cannabis revenues first overtook those from alcohol, a trend that continued into March.

If the trend keeps up, Illinois could see more than $1 billion in adult-use marijuana sales in 2021. Last year, the state sold about $670 million in cannabis and took in $205.4 million in tax revenue.

Officials have emphasized that the tax dollars from all of these sales are being put to good use. For example, the state announced in January that it is distributing $31.5 million in grants funded by marijuana tax dollars to communities that have been disproportionately impacted by the war on drugs.

The funds are part of the state’s Restore, Reinvest, and Renew (R3) program, which was established under Illinois’s adult-use cannabis legalization law. It requires 25 percent of marijuana tax dollars to be put in that fund and used to provide disadvantaged people with services such as legal aid, youth development, community reentry and financial support.

Awarding the new grant money is not all that Illinois is doing to promote social equity and repair the harms of cannabis criminalization. Gov. J.B. Pritzker (D) announced in December that his office had processed more than 500,000 expungements and pardons for people with low-level cannabis convictions on their records.

Relatedly, a state-funded initiative was recently established to help residents with marijuana convictions get legal aid and other services to have their records expunged.

But promoting social equity in the state’s cannabis industry hasn’t been smooth sailing. The state has faced criticism from advocates and lawsuits from marijuana business applicants who feel officials haven’t done enough to ensure diversity among business owners in the industry.

New Mexico Governor Signs Marijuana Legalization Bill, Making State Third To Enact Reform Within Days

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.
Continue Reading

Business

Colorado Marijuana Sales Reached $167 Million In February

Published

on

Colorado’s overall cannabis sales for the first two months of 2021 are $78 million higher than those for January and February of 2020.

By Robert Davis, The Center Square

Total marijuana sales in Colorado reached $167 million in February, the state’s revenue department announced on Friday.

The total represents a $20 million decline in sales from the previous month. However, Colorado’s overall sales for the first two months of 2021 remain $78 million above the pace set between January and February of 2020.

Marijuana sales are calculated by adding the total sales for both medical and recreational marijuana sales in Colorado’s 64 counties.

Denver County led all others in total recreational sales with over $38 million. Arapahoe and Adams counties followed suit with $13 million and $11 million in recreational sales, respectively.

Denver also led the way in medical marijuana sales, bringing in a total of $14 million. El Paso County was a close second, reaping over $10 million in medical sales.

Sales are not automatically accounted for in the state’s accounting system. This means the Department of Revenue (CDOR) relies on each county to report their sales before reporting the total. In effect, marijuana sales are reported one month behind tax and fee revenue totals.

Meanwhile, Colorado collected over $33 million in tax revenue in March. This total represents both taxes levied from medical and recreational marijuana sales, as well as license and application fees.

Between February and March, state tax revenue from marijuana sales declined 4 percent, according to CDOR data.

Tax revenue comes from a 2.9 percent state sales tax on marijuana sold in stores, a 15 percent state retail marijuana sales tax, and a 15 percent state retail marijuana excise tax on wholesale sales or transfers of retail marijuana.

This piece was first published by The Center Square.

Colorado Is Auctioning Marijuana-Themed License Plates To Raise Money For People With Disabilities

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.
Continue Reading

Business

Uber Will ‘Absolutely’ Explore Marijuana Deliveries When Federal Prohibition Ends, CEO Says

Published

on

The CEO of Uber said on Monday that the ride share company will “absolutely” explore adding marijuana deliveries to its services when federal prohibition ends.

Dara Khosrowshahi was asked about the prospect of expanding his business to include cannabis deliveries during an interview with CNBC. He said while the company remains focused on grocery and alcohol deliveries, in addition to its core ridesharing service, that’s certainly in the cards if marijuana is federally legalized.

Uber is interested in “the types of deliveries that a high percentage of consumers are going to want delivered fast into their home and are quite frequent,” he said. “We think, obviously, food, grocery, pharmacy and alcohol are part of that category,” but cannabis also holds potential.

“When the road is clear for cannabis when federal laws come into play, we’re absolutely going to take a look at it,” Khosrowshahi said. “But right now with grocery, with food, with alcohol, et cetera, we see so much opportunity out there and we’re going to focus on the opportunity at hand.”

The tech executive was specially asked about the possible expansion into the cannabis market in light of legalization recently being enacted in New York. And if polling from that state is any indication, Uber would see the demand for deliveries that it’s looking for, as 53 percent of New Yorkers said in a survey that they would favor having that option available to consumers.

But for now, the CEO said the business is keeping its eyes on current expansions, which includes its recent acquisition of the alcohol delivery service Drizly. That company did launch an ancillary cannabis delivery service called Lantern—but following the Uber deal, it announced that the two entities would be separated, with Lantern operating independently as a private company.

Of course, as a national corporation, Uber is also making a risk assessment given the ongoing ban on cannabis at the federal level. But a policy change to that end could come sooner than later.

Senate Majority Leader Chuck Schumer (D-NY) has said that a bill to legalize marijuana that he’s been working on with Senate Finance Chairman Ron Wyden (D-OR) and Sen. Cory Booker (D-NJ) will be released “shortly.”

On the House side, Judiciary Chairman Jerrold Nadler (D-NY) has similarly signaled that his cannabis descheduling bill—the Marijuana Opportunity, Reinvestment and Expungement (MORE) Act—will be reintroduced this session. That proposal passed the House last year but did not advance in the Senate.

With Democrats in control of both chambers and the White House this session, there’s renewed hope among advocates that the days of prohibition are soon to be over. Still, questions remain about President Joe Biden’s role in the reform, as he opposes adult-use legalization and his press secretary said last month that his position “has not changed” to that end.

In any case, Uber’s apparent interest in participating in the market once those federal barriers are lifted is another sign of the industry’s potential. That said, many advocates have expressed that small businesses—particularly those operated by people most impacted by cannabis criminalization—should be prioritized in any legalization legislation over large companies.

Four More States Could Still Legalize Marijuana This Year After New Mexico, New York And Virginia

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.
Continue Reading
Advertisement

Marijuana News In Your Inbox

Support Marijuana Moment

Marijuana News In Your Inbox

Marijuana Moment