A bill to protect banks that service state-legal marijuana businesses from being penalized by federal regulators has been reintroduced in the Senate—with nearly a third of the chamber as cosponsors. It’s a development that takes on a new light now that Democrats are back in control the chamber.
This comes days after the Secure and Fair Enforcement (SAFE) Banking Act was refiled in the House, where it passed with bipartisan support as a standalone bill in 2019 and also as part of two COVID-19 relief bills.
The Senate version is being sponsored by Sens. Jeff Merkley (D-OR) and Steve Daines (R-MT), and it currently has 27 other cosponsors. In the House, the legislation has more than 100 members who’ve signed on as cosponsors.
The SAFE Banking Act would ensure that financial institutions could take on cannabis business clients without facing federal penalties. Fear of sanctions has kept many banks and credit unions from working with the industry, forcing marijuana firms to operate on a cash basis that makes them targets of crime and creates complications for financial regulators.
“No one working in a store or behind a register should have to worry about experiencing a traumatic robbery at any moment,” Merkley said in a press release. “That means we can’t keep forcing legal cannabis businesses to operate entirely in cash—a nonsensical rule that is an open invitation to robbery and money laundering. Let’s make 2021 the year that we get this bill signed into law so we can ensure that all legal cannabis businesses have access to the financial services they need to help keep their employees safe.”
— Senator Jeff Merkley (@SenJeffMerkley) March 23, 2021
Daines added that “Montana businesses shouldn’t have to operate in all cash—they should have a safe way to conduct business.”
“My bipartisan bill will provide needed certainty for legal Montana cannabis businesses and give them the ability to freely use banks, credit unions and other financial institutions without the fear of punishment,” he said. “This in turn will help increase public safety, reduce crime, support Montana small businesses, create jobs and boost local economies. A win-win for all.”
Our bipartisan bill will help increase public safety, reduce crime, support Montana small businesses, create jobs and boost local economies. A big win for our communities.
— Steve Daines (@SteveDaines) March 23, 2021
With Democrats now in control of both chambers of Congress and the White House, industry stakeholders are optimistic that the legislation stands a solid chance of becoming law this year.
The Senate represented the bill’s most significant obstacle last session under GOP control.
After it passed the House last Congress, advocates and stakeholders closely watched for any action to come out of the Senate Banking Committee, where it was referred after being transmitted to the chamber. But then-Chairman Mike Crapo (R-ID) did not hold a hearing on the proposal, despite talk of negotiations taking place regarding certain provisions.
Crapo said he opposed the reform proposal, but he signaled that he might be more amenable if it included certain provisions viewed as untenable to the industry, including a 2 percent THC potency limit on products in order for cannabis businesses to qualify to access financial services as well as blocking banking services for operators that sell high-potency vaping devices or edibles that could appeal to children.
Sen. Sherrod Brown (D-OH), who took the top seat in that panel after Democrats secured a majority in the Senate, told reporters in February that he’s “willing” to move the cannabis banking bill, “but with it needs to come sentencing reform.”
“I don’t think we move on legalization the way that Colorado and some other states want us to, unless we really look more seriously at who’s in prison for how long for those kinds of offenses and we don’t do one without the other,” he said.
The committee’s ranking member, Sen. Pat Toomey (R-PA), said in November that “I am open to working with my colleagues on how we could enable businesses that are operating legally in their respective states to be able to have ordinary banking services” and that “I think that’s something we should work on.”
Beside the chief sponsors, here’s who’s signed on to this latest version so far: Sens. Kyrsten Sinema (D-AZ), Ed Markey (D-MA), Alex Padilla (D-CA), Patrick Leahy (D-VT), Dick Durbin (D-IL), Ron Wyden (D-OR), Mazie Hirono (D-HI), Tina Smith (D-MN), Angus King (I-ME), Catherine Cortez Masto (D-NV), Michael Bennet (D-CO), Bob Menendez (D-NJ), Jon Tester (D-MT), Jacky Rosen (D-NV), Kevin Cramer (R-ND), Dan Sullivan (R-AK), Kirsten Gillibrand (D-NY), Elizabeth Warren (D-MA), Chris Murphy (D-CT), Gary Peters (D-MI), Bernie Sanders (I-VT), Brian Schatz (D-HI), Patty Murray (D-WA), Amy Klobuchar (D-MN), Rand Paul (R-KY), Bill Cassidy (R-LA) and Cynthia Lummis (R-WY).
Businesses operating legally in #VT should be able to use the banking system. I’m proud to again cosponsor the SAFE Banking Act to give businesses access to the financial services they need in the dozens of states that have legalized cannabis businesses, including Vermont.
— Sen. Patrick Leahy (@SenatorLeahy) March 23, 2021
At the end of the last Congress, the prior version of the SAFE Banking Act had garnered a total of 35 senators signed on, including now-Vice President Kamala Harris.
Proud to cosponsor @SenJeffMerkley's SAFE Banking Act.
It’s about time that we remove the financial limitations on legitimate marijuana-related businesses and allow them to access banking services that are key to their survival.https://t.co/95I1McdNS8
— Senator Bob Menendez (@SenatorMenendez) March 23, 2021
When legislative leaders announced that the SAFE Banking Act was getting a House vote in 2019, there was pushback from some advocates who felt that Congress should have prioritized comprehensive reform to legalize marijuana and promote social equity, rather than start with a measure viewed as primarily friendly to industry interests.
Rep. Earl Blumenauer (D-OR), co-chair of the Congressional Cannabis Caucus and an original cosponsor of the bill, said on Friday that the plan is to pass the banking reform first this session because it “is a public safety crisis now,” and it’s “distinct—as we’ve heard from some of my colleagues—distinct from how they feel about comprehensive reform.”
Meanwhile, congressional lawmakers are simultaneously preparing to introduce legislation to end federal cannabis prohibition.
Senate Majority Leader Chuck Schumer (D-NY), Senate Finance Chairman Ron Wyden (D-OR) and Sen. Cory Booker (D-NJ) are in the process of crafting a legalization bill, and they’ve already met with advocates to get feedback on how best to approach the policy change. Wyden is the only member of the trio to be listed as an original cosponsor of the new SAFE Banking Act.
Schumer has said lawmakers must pursue broad justice-focused cannabis legislation and not stop at the industry-favored financial reform.
“Congress should not enact banking reform alone and think the job is done,” he tweeted in 2019. “We need decriminalization at the federal level, criminal justice reform, and investment in opportunity for minority & women-owned small businesses.”
It’s not clear if those views indicate that he opposes moving the SAFE Banking act ahead of a bill to end prohibition, or if he would allow it to come to the floor with the understanding the broader reform would follow.
House Judiciary Chairman Jerrold Nadler (D-NY) also recently said that he would be reintroducing the Marijuana Opportunity, Reinvestment and Expungement (MORE) Act, which would federally deschedule cannabis and contains a number of social equity provisions. That proposal passed in the House last year.
“With new Senate leadership now firmly in favor of cannabis policy reform, we are optimistic that this narrowly tailored—but absolutely necessary—legislation will be allowed to progress through the hearing process without delay,” Aaron Smith, co-founder and chief executive officer of the National Cannabis Industry Association, said in a press release. “This bill is a meaningful first step that will have immediate benefits in terms of safety, transparency, fairness, and much-needed economic opportunities while Congress continues working toward more comprehensive solutions to end prohibition and sensibly regulate cannabis.”
The American Bankers Association (ABA), for its part, says it’s important to advance marijuana banking reform. While the group doesn’t have a formal position on broader reform, it said in a letter to the House SAFE Banking Act sponsors last week that the cannabis financial services issue “has become a challenge for so many of our nation’s communities and the banks that serve them.”
“The bipartisan SAFE Banking Act would be an important step toward enabling financial services for cannabis-related businesses,” ABA wrote. “The SAFE Banking Act is not a cure all for the cannabis banking challenge, but it is a measure that helps clarify many issues for the banking industry and regulators.”
“Providing a mechanism for the cannabis industry to access the banking system would help those communities reduce cash-motivated crimes, increase the efficiency of tax collections, and improve the financial transparency of the cannabis industry,” the group said.
The office of Rep. Ed Perlmutter, chief sponsor of the House version of the bill, said the legislation is also being supported by the Credit Union National Association, Independent Community Bankers of America, National Association of Realtors, United Food and Commercial Workers and other groups.
As more states have legalized marijuana for recreational or medical use, financial institutions have relied on 2014 guidance from the Financial Crimes Enforcement Network (FinCEN) that requires them to submit suspicious activity reports if they elect to provide financial services to cannabis businesses. In the years since, the number of depositories taking on marijuana clients has gradually increased—until a more recent downward trend that now seems to be stabilizing.
The head of the Internal Revenue Service (IRS) told Congress last month that the federal agency would “prefer” for state-legal cannabis firms to be able to pay taxes electronically, as the current cash-based system under prohibition is onerous and presents risks to workers.
Former Treasury Secretary Steven Mnuchin similarly said in 2019 that he’d like to see Congress approve legislation resolving the cannabis banking issue, and he pointed to the fact that IRS has had to build “cash rooms” to deposit taxes from those businesses as an example of the problem.
Read the full test of the new Senate SAFE Banking Act below:
Virginia Has Sealed 64,000 Marijuana Distribution Charges Since Legalization Took Effect This Summer
“These aren’t just numbers and there are families attached.”
By Ned Oliver, Virginia Mercury
Virginia has sealed records documenting more than 64,000 misdemeanor marijuana distribution charges since the state legalized the drug in July.
The figure came out Thursday during a meeting of the legislature’s Cannabis Oversight Commission.
Officials said the records were scrubbed from the state’s criminal record database, which is used by employers like school boards, state agencies and local governments to screen employees.
The state had already sealed 333,000 records detailing charges of simple possession last year after the state reduced the offense to a civil infraction on par with a traffic offense, said Shawn G. Talmadge, the Deputy Secretary of Public Safety and Homeland Security.
Lawmakers directed the state to expand that effort when they voted to broadly legalize recreational use of marijuana earlier this year.
The legislature also agreed to a broader expungement reform that will automatically seal other misdemeanor charges, including underage possession of alcohol, use of a fake ID, petit larceny, trespassing and disorderly conduct. Talmadge said those charges will remain in the system until the state finishes updating the software it uses to track criminal records.
“As of right now, the process is proceeding,” he said.
The Virginia Joint Commission on Cannabis Oversight is meeting now. You can find the agenda and links to livestream and to provide public comment at https://t.co/f1wsPn7SV7
— Jennifer McClellan (@JennMcClellanVA) October 14, 2021
Members of the oversight commission also heard from two advocates who urged them to move fast to address people currently imprisoned for marijuana offenses—a category of people the legalization legislation passed this year did not address.
Chelsea Higgs Wise, the leader of the advocacy group Marijuana Justice, and Gracie Burger, with the Last Prisoner Project, said Department of Corrections data suggests there are currently 10 people being held solely on serious marijuana charges.
They said it remains unknown how many more are being held because of marijuana related probation violations.
“These aren’t just numbers and there are families attached,” Burger said.
DEA Proposes Dramatic Increase In Marijuana And Psychedelic Production In 2022, Calling For 6,300 Percent More MDMA Alone
The Drug Enforcement Administration (DEA) is proposing a dramatic increase in the legal production of marijuana and psychedelics like psilocybin, LSD, MDMA and DMT to be used in research next year.
In a notice scheduled to be published in the Federal Register on Monday, the agency said there’s been a “significant increase in the use of schedule I hallucinogenic controlled substances for research and clinical trial purposes,” and it wants authorized manufacturers to meet that growing demand.
DEA had already massively upped its proposed 2021 quota for cannabis and psilocybin last month, but now it’s calling for significantly larger quantities of research-grade marijuana and a broader array of psychedelics to be manufactured in 2022.
It wants to double the amount of marijuana extracts, psilocybin and psilocyn, quadruple mescaline and quintuple DMT. What especially stands out in the notice is MDMA. The agency is proposing an enormous 6,300 percent boost in the production of that drug—from just 50 grams in 2021 to 3,200 grams in the coming year—as research into its therapeutic potential continues to expand.
LSD would see a 1,150 percent increase, up to 500 grams of the potent psychedelic.
Marijuana itself would get a 60 percent boost under DEA’s proposal, up to 3.2 million grams in 2022 from the 2 million grams last year.
Here’s a visualization of the proposed quota increase from 2021 to 2022 for marijuana and cannabis extracts:
For all other THC, psilocybin, psilocyn and MDMA:
And for other psychedelic substances like LSD, mescaline and DMT:
DEA said in the Federal Register notice that it has been receiving and approving additional applications to “grow, synthesize, extract, and manufacture dosage forms containing specific schedule I hallucinogenic substances for clinical trial purposes” to achieve these ambitious quotas.
“DEA supports regulated research with schedule I controlled substances, as evidenced by increases proposed for 2022 as compared with aggregate production quotas for these substances in 2021,” the agency said, adding that it working “diligently” to process and approve marijuana manufacturers applications in particular, as there’s currently only one farm at the University of Mississippi that’s permitted to cultivate the plant for research.
“Based on the increase in research and clinical trial applications, DEA has proposed increases in 3,4- Methylenedioxyamphetamine (MDA), 3,4-Methylenedioxymethamphetamine (MDMA), 5-Methoxy-N,N-dimethyltryptamine, Dimethyltryptamine, Lysergic acid diethylamide (LSD), Marihuana, Marihuana Extract, Mescaline, Psilocybin, Psilocyn, and All Other Tetrahydrocannabinols to support manufacturing activities related to the increased level of research and clinical trials with these schedule I controlled substances.”
Here are the exact numbers for the proposed 2021 and 2022 quotas:
|All other tetrahydrocannabinol||1,000||2,000|
A 30-day public comment period will be open after the notice is formally published on Monday.
It’s difficult to overstate just how significant the proposed 2022 increases are, but it’s certainly true that scientific and public interest in marijuana and psychedelics has rapidly increased, with early clinical trials signaling that such substances show significant therapeutic potential.
National Institute on Drug Abuse (NIDA) Director Nora Volkow told Marijuana Moment in a recent interview that she was encouraged by DEA’s previous proposed increase in drug production quota. She also said that studies demonstrating the therapeutic benefits of psychedelics could be leading more people to experiment with substances like psilocybin.
Advocates and experts remain frustrated that these plants and fungi remain in the strictest federal drug category in the first place, especially considering the existing research that shows their medical value for certain conditions.
A federal appeals court in August dismissed a petition to require the DEA to reevaluate cannabis’s scheduling under the Controlled Substances Act. However, one judge did say in a concurring opinion that the agency may soon be forced to consider a policy change anyway based on a misinterpretation of the therapeutic value of marijuana.
Separately, the Washington State attorney general’s office and lawyers representing cancer patients recently urged a federal appeals panel to push for a DEA policy change to allow people in end-of-life care to access psilocybin under state and federal right-to-try laws.
Image element courtesy of Kristie Gianopulos.
Supreme Court Won’t Hear Case On Legalizing Safe Drug Consumption Sites, But Activists Are Undeterred
The U.S. Supreme Court (SCOTUS) has rejected a request to hear a case on the legality of establishing safe injection sites where people can use illicit drugs in a medically supervised environment.
The justices announced on Tuesday that they decided against taking up the case raised by the nonprofit Safehouse, despite the pleas of attorneys general from 10 states and D.C. who recently filed amici briefs urging the court’s involvement.
Representatives from 14 cities and counties, as well as the mayor of Philadelphia, which is at the center of the current case, also filed briefs in support of the case in recent days.
Safehouse was set to launch a safe consumption site in Philadelphia before being blocked by a legal challenge from the Trump administration. It filed a petition with the nation’s highest court in August to hear the case.
But while the Supreme Court declined to take action—and the Biden administration passed up its voluntary opportunity to weigh in at this stage, which may well have influenced the justices’ decision—activists say the battle will continue at a lower federal court level, where the administration will have to file briefs revealing its position on the issue.
Disappointed but not surprised U.S. Supreme Court declined to hear our case. We’re pursuing our claims in federal court. As that litigation proceeds, Biden administration will have to take a position, which it avoided by waiving its right to respond to our Supreme Court petition.
— Safehouse (@SafehousePhilly) October 13, 2021
“We were disappointed that the government chose not to respond to our petition,” Safehouse Vice President Ronda Goldfein told Filter. “They said, ‘We’re going to waive our right to respond,’ [and] the Supreme Court declined to review our case. Ordinarily that sounds like the end of the road—but in our case we are still pursuing our claims in a different venue.”
That venue will be the the federal district court in Philadelphia, where activists plan to submit multiple arguments related to religious freedom and interstate commerce protections. The Biden administration will be compelled to file a response in that court by November 5.
“If they don’t respond, they lose,” Goldfein said.
A coalition of 80 current and former prosecutors and law enforcement officials—including one who is President Joe Biden’s pick for U.S. attorney of Massachusetts—previously filed a brief urging the Supreme Court to take up Safehouse’s safe injection case.
Fair and Justice Prosecution, the group that coordinated the amicus brief, also organized a tour of Portugal for 20 top prosecutors in 2019 so they could learn about the successful implementation of the country’s drug decriminalization law.
If the Supreme Court were to have taken the case and rule in favor of Safehouse, it could have emboldened advocates and lawmakers across the country to pursue the harm reduction policy.
The governor of Rhode Island signed a bill in July to establish a safe consumption site pilot program where people could test and use currently illicit drugs in a medically supervised environment. It became the first state in the country to legalize the harm reduction centers. It’s not clear whether the Department of Justice will seek to intervene to prevent the opening of such facilities in that state.
Massachusetts lawmakers advanced similar legislation last year, but it was not ultimately enacted.
A similar harm reduction bill in California, sponsored by Sen. Scott Wiener (D), was approved in the state Senate in April, but further action has been delayed until 2022.