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.
Legally-authorized cannabis businesses are forced to operate w/ cash only, which sometimes makes them targets for violent criminals. #HR1595, the #SAFEBankingAct will address this issue by creating a safe harbor that allows banks & credit unions to provide services to these biz.
— Financial Svcs Cmte (@FSCDems) March 27, 2019
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.
My friendly amendment to the cannabis banking bill passed unanimously! Clarifies that *new* banks/credit unions are also protected by the bill. We need to level the playing field for new market entrants, in this growing industry and across our economy. https://t.co/IUYBMrszRq
— Rep. Katie Porter (@RepKatiePorter) March 27, 2019
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.
This country is in need of criminal justice reform, including addressing the historic racial & social inequities related to the criminalization of #marijuana. That is why @FSCDems support the #SAFEBankingAct which complements other cannabis reforms introduced by @HouseDemocrats pic.twitter.com/tl2x97vXVl
— Financial Svcs Cmte (@FSCDems) March 27, 2019
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.
A good start in our blueprint to legalization, but it's just the beginning. We will continue to work so all marijuana related bills see their day this Congress. The STATES Act, Veterans Equal Access, decriminalization, industry equity, and restorative justice all coming soon! https://t.co/5P1Zt0tY4m
— Earl Blumenauer (@repblumenauer) March 27, 2019
“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.
Company Gets Trademark For The Word ‘Psilocybin,’ Frustrating Decriminalization Advocates
As psychedelics reform efforts pick up across the U.S., there’s an increasing weariness among advocates about the potential corporatization that may follow.
That’s why many found it alarming when a California-based company announced on Thursday that it had successfully trademarked the word “psilocybin,” the main psychoactive constituent of so-called magic mushrooms.
Psilocybin™ is a brand of chocolates that do not contain the psychedelic itself but are meant to “begin educating, enlightening and supporting the community in upgrading their inner vibrations in order to get everything they want of their time here on earth,” according to a mission statement.
Soon after founder Scarlet Ravin shared news of the trademark on LinkedIn, advocates raised questions and concerns: What does that mean on a practical level for other psilocybin organizations? Why should one brand get exclusive rights (to a certain legal extent) to the scientific name of a natural substance?
The reality of this particular trademark is more nuanced than it might appear at first glance. While it’s true that the company was granted the distinction by the U.S. Patent and Trademark Office, it’s specifically for educational materials and it’s listed on the supplemental register, rather than the principal register, which means it would be incumbent upon the brand to prove that it has earned distinctiveness of the mark if the issue went to court.
“It’s certainly good for her business to have that mark, but I think at the end of the day, it’s going to be somewhat weak,” Larry Sandell, an intellectual property attorney at Mei & Mark LLP, told Marijuana Moment. He added that this example is “indicative that people are trying to stake early claims to IP.”
“Even if they might be somewhat overreaching, people see a potential new market here and they want to stake out their ground,” he said. “It’s a big next space that people are anticipating a legal market. Maybe it’s where cannabis was five to 10 years ago.”
Despite those legal limitations, reform advocates view the trademark as emblematic of a bigger issue—that someone would presume to take ownership of a substance that’s at the center of a national debate on whether or not to criminalize individuals for using it.
Kevin Matthews, who led the successful campaign to decriminalize psilocybin mushrooms in Denver last year and is the founder of the national psychedelics advocacy group SPORE, told Marijuana Moment that he didn’t doubt Ravin had the right intentions—to promote education into the substance—but he said the decision to trademark is nonetheless questionable.
“This being an open-source movement, trademarking the word psilocybin, in some ways it feels like—although I don’t think this is her intention—it’s lacking perspective,” he said. “Does that mean we can’t use psilocybin as SPORE because we’re an educational non-profit and she’s a for-profit branded company? It doesn’t make a lot of sense to me. She needs to let go of the trademark.”
Ravin said that her goal in trademarking psilocybin was to prevent the substance from being becoming the next cannabis, which she said has been corrupted from its “true spiritual, medicinal benefit” and turned into a corporate commodity.
“Knowing that psilocybin is going to be next [to be legalized] I feel strongly guided by the deepest part of my heart to really offer a sense of education of what could be when you take such a strong, beautiful medicine and to give people an education platform here and now to let them know what’s coming, how to receive it, how to get the most benefit from,” she told Marijuana Moment in a phone interview.
“We paved the way for this being a medicinal offering and not a consumer, recreational shitshow. That was our intention,” Ravin said. “The only way that we are going to have access to mainstream consumers is by having some sort of trademark on the word so that we can use it for something that’s not what it actually is.”
“With this being something that we can now put into market with a box of chocolates that has no psilocybin in it, but as you can already see, it creates a platform for discussion of what the beauty of this plant can do,” she said. “Me and my movement and my team, we don’t own the word. We’re not going to ever sue anyone who also uses the word—we’re opening a doorway for ourselves and anyone that wants to see this educated upon so that we can hit people who are unfamiliar with it now with downloads to actually have this be a safe, successful psychedelic transition.”
Asked to react to criticism about the trademark from advocates, Ravin said “we’re all here to follow spirit guidance to show love and light, and the visions I had of doing what we’re doing now was based upon breaking boundaries and breaking perceptions and allowing people to have an opportunity to sink into being one unit.”
“Yeah, it might be coming out, we might be using the platform of psilocybin. We can use any platform to do this,” she said. “We can use any platform to come together as a whole, and the longer that people sit in duality and say, ‘oh now she’s going to have a stronger voice than me is just looking at something not through their heart,’ it’s looking at it through ego and judgement.”
“The more that we describe what we’re doing, the more people I think will start to feel our unity and we’ll be able to move together as a stronger force than pointing fingers and trying to separate one another,” she said. “Those days are done.”
Ravin said that once the Psilocybin™ chocolates are ready for market, she plans to contribute 10 percent of profits to the Multidisciplinary Association for Psychedelic Studies (MAPS), which is involved in researching therapeutic benefits of psychedelic substances.
Photo courtesy of Wikimedia/Workman.
China Must Import More Hemp From U.S. Under New Trade Deal
After years of being one of the United States’s main sources of hemp imports, China will now be required to buy a lot more of the non-intoxicating cannabis crop from the U.S. under a new trade deal.
Hemp, which was federally legalized under the 2018 Farm Bill, is one of a long list of agricultural products that China agreed to import on a larger scale over the next two years as part of an international trade agreement that was signed on Wednesday.
“The Parties acknowledge that trade and economic structural changes resulting from this Agreement and from other actions being taken by China to open up its economy and improve its trade regime should lead to improved trade flows, including significant increases in exports of goods and services to China by the United States and other countries,” the accord says.
“The Parties believe that expanding trade is conducive to the improvement of their bilateral trade relationship, the optimal allocation of resources, economic restructuring, and sustainable economic development, given the high degree of complementarity in trade between them. The Parties recognize that the United States produces and can supply high-quality, competitively priced goods and services, while China needs to increase the importation of quality and affordable goods and services to satisfy the increasing demand from Chinese consumers.”
While the deal didn’t specify just how much more hemp China will be importing, the document states that the country must spend at least $12.5 billion more than it did in 2017 on more than 200 agricultural commodities, including the cannabis plant, for calendar year 2020. The following year, it must spend at least $19.5 billion more.
Included in the deal is a particular form of cannabis, which is referred to as “true hemp” in the document.
“True hemp (cannabis sativa l.), raw or processed but not spun; tow and waste of true hemp (including yarn waste and garnetted stock),” the description of the item states.
Jonathan Miller, general counsel for the U.S. Hemp Roundtable, told Marijuana Moment that hemp’s inclusion in the trade deal is a “really good development.”
“The fact that China would be importing our hemp and would be giving a new market for American farmers is pretty exciting,” he said, referring to the fact that the U.S. has historically imported the crop from China and that it has sometimes been criticized as being of inferior quality.
While cannabis has been cultivated in China for thousands of years, the country has only recently begun expanding the industry domestically. Part of the delay has to do with strict anti-drug laws, but as the legalization has spread internationally, more businesses are getting into the hemp, and particularly CBD, market.
Meanwhile, in the U.S., the hemp industry has exploded, with bipartisan lawmakers working with regulators to ensure that hemp farmers have access to the resources they need to expand and meet booming consumer demand for CBD products. The U.S. Department of Agriculture (USDA) is currently finalizing its regulations for the crop after releasing an interim final rule last year.
USDA clarified in guidance last year that hemp plants and seeds are able to be imported from other countries. In 2018, the U.S. imported about $3.3 million in hemp from China, according to Hemp Industry Daily.
Photo courtesy of Pixabay.
Coca-Cola Denies CBD Beverage Rumor Spurred By Video
Coca-Cola denied that it has plans to enter the CBD market in a statement to Marijuana Moment on Thursday.
The comment comes after a man who said he obtained a prototype of a childproof can of Coke claimed to have insider knowledge of the soda company’s intent to launch a line of CBD-infused drinks in partnership with the Canadian cannabis company Aurora.
In a video shared on YouTube on Wednesday, the individual, who goes by Gabor the Blind Guy, said his father is an engineer for a company that “produces bottling and capping machines” for pharmaceutical and food businesses.
“Recently he was approached by Coca-Cola in Canada to design a machine that puts a childproof cap on cans of Coca-Cola,” he said. “In Canada, Coca-Cola is coming out with a new line of Coca-Cola that contains CBD extracts—pretty much cannabis-based drugs.”
“Obviously, they don’t want little kids popping open those cans and drinking them…so my dad was tasked with designing a cap that will prevent little kids from opening these cans of CBD Coca-Cola,” he said.
The description of the video on YouTube mentioned the alleged partnership with Aurora.
Watch a mirrored version of the now-deleted YouTube video below:
But on Thursday, a media relations officer for Coca-Cola told Marijuana Moment that the “rumors are untrue.”
“As we have stated many times, we have no plans to enter the CBD market.”
Gabor claimed that his father gave him a prototype of a non-CBD can with the cap he designed because he wanted to see if a blind person could open it. The video led some to speculate that he inadvertently disclosed confidential information that could be in violation of a non-disclosure agreement.
On Reddit, users questioned whether the video was authentic. Some wondered if the claim was an attempt to boost Aurora’s stock. However, marijuana wasn’t a main focus of Gabor’s YouTube prior videos posted over a period of years.
Marijuana Moment also reached out to Aurora for comment, but a representative was not immediately available.
This isn’t the first time that people have speculated about Coca-Cola’s potential interest in entering the cannabis space. Bloomberg reported last year that the company was monitoring the industry but hadn’t made any decisions yet.
Coca-Cola CEO James Quincey has said on several occasions that the company isn’t planning to get involved in the cannabis market.
“There’s been no change in my position, which is: there’s nothing happening,” he said in July.
“We want to sell drinks that people can drink each day. So it’s not like you have something once,” he told CNBC last year. “You have one a day. And if you can’t cross [off] those three things of legal, safe and consumable, it’s not an ingredient that’s going to work for us.”
— CNBC (@CNBC) October 30, 2018
Also in a statement last year, Coca-Cola said the company has “no interest in marijuana or cannabis.”
“Along with many others in the beverage industry, we are closely watching the growth of non-psychoactive CBD as an ingredient in functional wellness beverages around the world,” the statement read. “The space is evolving quickly. No decisions have been made at this time.”
With respect to prior rumors about talks specifically between Coca-Cola and Aurora, the soda company declined to comment when previously pressed. Aurora said in a statement that it had “no agreement, understanding or arrangement with respect to any partnership with a beverage company.”
Image via Gabor the Blind Guy.