Not only are marijuana businesses excluded from federal coronavirus relief funds, but medical cannabis dispensaries in New York are also ineligible for a new COVID-19 loan program that the state is offering.
Under the New York Forward Loan Fund (NYFLF), marijuana shops are specifically excluded, alongside payday loan providers, pawn shops, strip clubs, liquor stores and astrologers. Information pages about the program don’t provide a reason for why dispensaries are considered ineligible.
“The working capital loans are timed to support businesses and organizations as they proceed to reopen and have upfront expenses to comply with guidelines (e.g., inventory, marketing, refitting for new social distancing guidelines) under the New York Forward Plan,” a description of the program states.
This eligibility requirement restrictions come despite the fact that most states, including New York, have deemed cannabis businesses as essential services that can continue to operate during the pandemic.
For the industry in the Empire State, the loan exclusion is another gut punch in a crisis. There have been widespread calls from stakeholders, advocates and legislatures to provide the market with equitable relief from the federal Small Business Administration and, while that so far has not panned out, there’s been hope that states could help fill the gap.
“Given that cannabis businesses are ineligible for federal relief, it is unconscionable for the state of New York to deny them access to state-based relief efforts,” Morgan Fox, media relations director for the National Cannabis Industry Association, told Marijuana Moment. “These businesses have been going above and beyond to provide continuous healthcare, protect jobs, and generate revenue for the state under terrible conditions just like other essential services.”
“Leaving them in the lurch like this is a tremendous disservice to the people who risked their health to provide medical cannabis to the people that need it, and will stunt the ability of the industry to recover and grow at a time when the economy needs it most,” he said.
Katie Neer, chair of the New York Medical Cannabis Industry Association and director of government relations for Acreage Holdings, told Marijuana Moment that it’s “unfortunate that medical cannabis operators, which are licensed and regulated in New York, and help thousands of patients manage a wide range of ailments, conditions, and illnesses, continue to be lumped in with other so-called ‘sin’ businesses, like pay-day loan stores, massage parlors, and strip clubs.”
“The reality is that New York’s medical cannabis program, established by the governor and Legislature in 2014, is one of the most restrictive in the nation,” she said. “As a result, the industry was struggling prior to the pandemic, even as it was deemed ‘essential’ and continues to serve patients throughout the crisis.”
“While we are eager to participate in the economic recovery at both the state and federal levels, accessing capital has long been a struggle for cannabis operators due to cannabis remaining a federally illegal schedule I drug. We applaud the state’s $100 million New York Forward Loan fund to support small businesses, but we regret not being able to participate due to inconsistencies between state and federal law. To that end, we urge the US Senate to include the SAFE Banking Act in the next federal aid package, which would improve the cannabis industry’s access to capital and ensure that state administered efforts like this one can include state-legal cannabis operators.”
It’s possible that because this loan program is the product of a private-public partnership involving several large national banks, the cannabis exclusion could be related to perceived risks associated with providing financial services to a federally illicit market.
While New York might not be extending state-level relief to cannabis businesses, lawmakers in Massachusetts are actively considering legislation that would establish a coronavirus relief program for marijuana firms and other companies that are left out of federal aid.
In the meantime, at the federal level, the House passed a COVID-19 package that does contain language that would protect banks that service cannabis businesses from being penalized by federal regulators. Advocates argue that this would mitigate the spread of the virus in a heavily cash-based industry.
Rep. Earl Blumenauer (D-OR) also introduced a bill last month that would extend SBA access to marijuana companies.
New York Gov. Andrew Cuomo (D) was recently asked why the state hasn’t legalized cannabis for adult use as a means to generate much-needed tax revenue during the pandemic. He said it’s a policy change he expects will happen, but it’s a “complicated issue and it has to be done in a comprehensive way.”
Massachusetts Lawmakers Discuss Drug Decriminalization And Safe Injection Sites At Hearing
Massachusetts lawmakers on Monday heard testimony on separate proposals to decriminalize drug possession and establish a pilot program for safe injection facilities where people could use illicit substances in a medically supervised environment to prevent overdose deaths and facilitate treatment.
The state legislature’s Joint Committee on Mental Health, Substance Use and Recovery held a hearing on the harm reduction proposals, with experts and people personally impacted by substance misuse advocating for new approaches to drugs that destigmatize addiction and offer people resources outside of a criminal justice context.
The decriminalization bill would replace criminal penalties for the possession of any controlled substance with a civil fine of up to $50. To avoid the fine, individuals could enroll in a “needs screening to identify health and other service needs, including but not limited to services that may address any problematic substance use and mental health conditions, lack of employment, housing, or food, and any need for civil legal services.”
For the safe injection site legislation, the state would establish a 10-year pilot program where at least two facilities would “utilize harm reduction tools, including clinical monitoring of the consumption of pre-obtained controlled substances in the presence of trained staff, for the purpose of reducing the risks of disease transmission and preventing overdose deaths.”
A separate, less far-reaching bill that was added to the agenda in a late addition would direct the Department of Public Health to simply “evaluate the feasibility” of safe consumption sites and then report back to lawmakers by July 31, 2022..
The joint committee listened to academics, health professionals, lawmakers discuss the reform proposals but did not take immediate action on any of the legislation. It’s unclear when the bills will be taken up again for further consideration.
“By every metric, the war on drugs has been a catastrophic failure,” Rep. Mike Connolly (D) said. “In the United States and here in Massachusetts, the criminalization of drug possession is a major driver of mass incarceration. We know that black people have been incarcerated at a rate eight times higher than white people, and there’s no question that the criminalization of substance use issues has contributed to these terrible disparities.”
Connolly is also the sponsor of legislation that received a Joint Judiciary Committee hearing in July on studying the implications of legalizing psychedelics like psilocybin and ayahuasca.
Officials with at least one Massachusetts city, Somerville, said that there are plans in the work to launch a safe injection facility in the jurisdiction. And they want to see the statewide bill pass to provide additional protections against being federally penalized.
“State legislation, wielding its constitutionally granted powers to enact laws for public health and safety, has the ability to greatly minimize these risks through legislation authorizing a pilot of safe consumption sites,” Hannah Pappenheim, assistant city solicitor at the City of Somerville, said. “In addition, state legislation would also minimize the risk of costly—but more importantly, lengthy—litigation.”
The official noted that a separate, Pennsylvania-based case on the legality of safe injection sites has been ongoing in federal courts for years at this point.
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—recently filed a brief urging the Supreme Court to take up the case.
Xavier Bacerra, the Biden administration’s secretary of health and human services, was among eight top state law enforcement officials who filed an earlier amicus brief in support of the Philadelphia-based Safehouse’s safe injection site plan when he served as California’s attorney general.
“State legislation paves the way for a more expedient process in Somerville, and of course elsewhere in the Commonwealth,” Pappenheim said.
Somerville Mayor Joseph Curtatone (D) said at Monday’s hearing that “it’s important for Massachusetts to finally lead—not just compiling, but implementing a strategy that reduces harm and save lives.” He conceded that he previously opposed the concept of allowing safe consumption sites; but his personal experience knowing people in his immediate family who suffered from addiction—as well as his own review of the scientific literature on harm reduction alternatives to criminalization—led him to embrace the reforms.
Massachusetts lawmakers advanced similar legislation last year, but it was not ultimately enacted.
The governor of neighboring 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.
Oamshri Amarasingham, deputy legislative director of the ACLU of Massachusetts, voiced support for both reform proposals at Monday’s hearing and told WGBH that establishing a safe injection site pilot program “is one piece of that puzzle” that is “critically important and that’s had great success in other countries.”
The ACLU has long supported shifting to a #PublicHealth approach to drug policy rather than a criminal one…
— ACLU Massachusetts (@ACLU_Mass) September 27, 2021
Shaleen Title, a former Massachusetts cannabis commissioner who now heads the Parabola Center, juxtaposed how laws handle substances like caffeine, alcohol and nicotine differently from currently illegal drugs.
“What separates that from when we have these illicit drugs, where handcuffs and cages are involved, and what led that to be? The reason has nothing to do with science, or evidence or the relative dangers of those drugs,” she said. “The reason is because—and this is well-documented—those drugs could be scapegoated and blamed on their association with indigenous and Indian and Mexican and Chinese and other cultures, and then used to target communities of color, particularly black and Latino people nationally and here in Massachusetts.”
At the same time that Massachusetts legislators are looking into harm reduction and broad drug decriminalization, local activists in the state have also been pursuing psychedelics reform.
Three Massachusetts cities—Northampton, Somerville and Cambridge—have each passed resolutions to deprioritize enforcement of laws against the possession, use and distribution of a wide range of psychedelics and other drugs. The Easthampton City Council is also exploring a resolution to decriminalize a wide range of entheogenic substances, with a meeting set for Friday.
Marijuana Arrests Dropped Sharply In 2020 As Both COVID And Legalization Spread, FBI Data Shows
Marijuana arrests declined significantly in 2020 amid the coronavirus pandemic, newly released FBI data shows.
There were 1,155,610 drug-related arrests overall last year, with cannabis sales and possession busts accounting for just over 30 percent (or 350,150) of those cases. The vast majority were for marijuana possession alone.
The agency’s data shows that there was a cannabis arrest every 90 seconds in the country in 2020, and there was a drug-related arrest every 27 seconds.
While these figures still highlight the rampant, ongoing criminalization of cannabis in states across the U.S., it’s a substantial deescalation compared to 2019, when FBI reported a total of 545,601 marijuana arrests. That amounted to a cannabis bust every 58 seconds.
Put another way, there was a 36 percent decrease in cannabis cases from 2019 to 2020. And while the federal agency doesn’t attempt to explain the statistical shift, there are a number of factors that could help explain it.
One of the more obvious societal changes during that timeframe is the COVID-19 health crisis, which involved social distancing requirements and generally discouraged people from being out in public where they might be at higher risk of being arrested for simple possession.
But advocates have also pointed out that the marijuana reform movement could be playing a role. Illinois’s adult-use cannabis law took effect at the beginning of 2020, for example. Hawaii, New Mexico and North Dakota also enacted decriminalization of marijuana possession in 2019, and Virginia followed suit the next year.
In Arizona, limited cannabis possession was legalized for adults starting on November 30, 2020 following voter approval of a reform initiative earlier that month.
“As more states move toward the sensible policy of legalizing and regulating cannabis, we are seeing a decline in the arrest of non-violent marijuana consumers nationwide,” NORML Executive Director Erik Altieri told Marijuana Moment. “The fight for legalization is a fight for justice. While these numbers represent a historic decline in arrests, even one person being put into handcuffs for the simple possession of marijuana is too many.”
Despite the decline in cannabis busts, the new data shows that American law enforcement still carried out more arrests for marijuana alone last year than for murder, rape, robbery, burglary, fraud and embezzlement combined.
It should be noted that not all local police participate in FBI’s reporting program, so these figures are not holistic and are estimates the agency makes based on those that do submit data.
The country had seen a consistent decline in cannabis arrests for roughly a decade prior to 2016, when those cases started to rise up until 2019.
Observers expect to see the downward trend in cannabis busts continue as more states move to end prohibition and law enforcement deprioritizes marijuana-relate cases. In New York, for example, police received new guidance this year stipulating that adults 21 and older can possess certain amounts of marijuana and consume it in places where tobacco use is permitted.
That directive alone seems to have led to a dramatic decrease in cannabis arrests in New York City.
Federal marijuana trafficking cases also continued to decline in 2020 as more states have moved to legalize, an analysis from the U.S. Sentencing Commission (USSC) that was released in June found.
Federal prosecutions of drug-related crimes overall increased in 2019, but cases involving marijuana dropped by more than a quarter, according to an end-of-year report released by Supreme Court Chief Justice John Roberts in December.
A study released by the Cato Institute in 2018 found that “state-level marijuana legalization has significantly undercut marijuana smuggling.”
New York Governor Says Marijuana Legalization Will Create ‘Thousands’ Of Jobs And Touts Regulatory Appointments
The governor of New York says marijuana legalization will generate “thousands and thousands of jobs” in the state, and she’s touting her recent actions to make regulatory appointments for the industry to get implementation underway.
At the Business Council of New York State’s annual meeting on Friday, Gov. Kathy Hochul (D) talked about the state’s business ethic and the importance of supporting markets of all sizes, including cannabis companies.
“We do want to go big or go home, and I want to help you get there,” she said. “I need you to survive because you’re the identity of New York that people create jobs and opportunities. You are who we are as New Yorkers. Your success means the success of this entire state.”
“So count me in as an ally—someone who’s going to be there for you, who will fight for you to make sure that we do not lose out to any competition, whether it’s in the space of cannabis, where I believe there’s thousands and thousands of jobs and new industries, to be created that were not even focused on,” Hochul said.
The governor has made a point of emphasizing her support for adult-use legalization and standing up the industry since replacing former Gov. Andrew Cuomo (D), who resigned amid a sexual misconduct scandal last month.
At Friday’s meeting, she said, “I had to unleash this opportunity that had been stifled for the first five months [after legalization was signed into law] because a few appointments hadn’t been made. Got that done.”
Hochul named two additional Cannabis Control Board members last week, which followed the Senate confirmation of previous appointees earlier this month. The newly named regulators do not require confirmation by lawmakers.
According to The New York Post, the governor reportedly recently dismissed Norman Birenbaum, director of cannabis programs under Cuomo, whom advocates had opposed becoming the head of the new Office of Cannabis Management.
Under New York’s legalization law, the independent Office of Cannabis Management within the New York State Liquor Authority was established and will be responsible for regulating the recreational cannabis market as well as the existing medical marijuana and hemp programs. It will be overseen by a five-member Cannabis Control Board.
Three members have now been appointed by the governor, and the Senate and Assembly have also appointed one member each.
As it stands, adults 21 and older can possess up to three ounces of cannabis or 24 grams of concentrates in New York—and they can also smoke marijuana in public anywhere tobacco can be smoked—but there aren’t any shops open for business yet.
The first recreational marijuana retailers in New York may actually be located on Indian territory, with one tribe officially opening applications for prospective licensees earlier this month.
In July, a New York senator filed a bill to create a provisional marijuana licensing category so that farmers could begin cultivating and selling cannabis ahead of the formal rollout of the adult-use program. The bill has been referred to the Senate Rules Committee.
Because the implementation process has been drawn out, however, one GOP senator wants to give local jurisdictions another year to decide whether they will opt out of allowing marijuana businesses to operate in their area—a proposal that advocates say is unnecessary and would create undue complications for the industry.
Under the law as enacted, municipalities must determine whether they will opt out of permitting marijuana retailers or social consumption sites by December 31, 2021. Sen. George Borrello (R) introduced legislation earlier this month that would push that deadline back one year.
Legalization activists aren’t buying the argument, however.
Adding pressure to get the market up and running is the fact that regulators in neighboring New Jersey recently released rules for its adult-use marijuana program, which is being implemented after voters approved a legalization referendum last year.
For the first year of cannabis sales, the state is expected to see just $20 million in tax and fee collections. That will be part of an estimated $26.7 billion in new revenues that New York is expected to generate in fiscal year 2021-2022 under a budget that the legislature passed in April.
Meanwhile, a New York lawmaker introduced a bill in June that would require the state to establish an institute to research the therapeutic potential of psychedelics.
Photo courtesy of Mike Latimer.