All of a sudden, a Mormon Republican senator from Utah is one of Congress’s leading champions for medical marijuana.
“The evidence shows that cannabis possesses medicinal properties that can truly change people’s lives for the better,” Sen. Orrin Hatch said last month when introducing legislation to remove roadblocks to studies on the drug’s medical potential. “I strongly support research into the medicinal benefits of marijuana, and I remain committed to helping patients find the help they need, whether they suffer from cancer, severe seizures or any other chronic disorder.”
In the days since that Senate floor speech, Hatch has spoken about medical cannabis at seemingly every opportunity. In tweets, press releases, committee hearings and videos, the senator and his staff have consistently maintained a focus on marijuana issues.
Hatch even cited his cannabis advocacy in pushing back against press reports about opioid-related legislation that led to President Trump’s nominee for drug czar withdrawing from consideration last week.
Hatch’s marijuana moves, and how his office has characterized them, have taken many longtime observers of marijuana policy by surprise in light of the Utah GOP senator’s longtime vocal opposition to cannabis law reform.
Hatch’s Cannabis History
Despite telling Rolling Stone last month that there’s been “no transformation” in his position on the issue and that he’s “always been for any decent medicine,” a review of Congressional records shows that Hatch’s views have indeed shifted over the years, in a very big way.
In 1977, when Hatch was a first-year freshman senator in, he voted no on a Judiciary Committee amendment to decriminalize possession of small amounts of marijuana. It cleared the panel over his objection, six votes to four.
“We’re sending out a message that really shouldn’t be sent out,” the Utah senator said.
But that was only a temporary setback for prohibitionist forces. After the vote, Hatch threatened to submit a substitute amendment establishing prison sentences for low-level cannabis possession, and the committee reversed itself the following week, undoing the decrim proposal.
Nearly two decades later, Hatch had ascended to the chairmanship of the panel. In December 1996, just weeks after California and Arizona voters became the first in the country to approve medical cannabis, he convened a Judiciary Committee hearing with the intent of pressing Clinton administration officials to work to overturn the state measures.
“Perhaps the most effective way to handle this would be to work with concerned citizens in Arizona and California who want to modify or repeal these initiatives,” he said, according to the hearing record. “I would like to know what the administration’s thinking is in this area and who is going to make these decisions as soon as possible because I think we can’t let this go without a response.”
Citing the DEA and other cannabis opponents, Hatch said that the “asserted medical benefits of marijuana have been rejected,” “marijuana is likely to be more cancer-causing than tobacco” and that the state initiatives “send the wrong message to our youth and easily could worsen the problem.”
He argued that the drug legalization movement essentially tricked voters into approving the ballot measures with “disingenuous tactics” such as misleading TV ads that “tug at the heartstrings.”
“Today, we will hear how the philanthropists of the drug legalization movement pumped millions of dollars in out-of-state soft money into stealth campaigns designed to conceal their real objective — the legalization of drugs. We will view some of their deceptive advertisements and we will learn the true threat these soft-headed campaigns pose to America…
“These were successful examples of stealth political strategies — that relied on misdirection and dissemblance to persuade the public that a campaign is devoted to salving the pain of the ill and dying or is designed to ‘get tough’ with drug offenders, but in truth were just a first step in a larger movement toward decriminalization of controlled drugs.”
Over the years, however, Hatch apparently met people whose real stories convinced him that cannabis actually does have medical benefits.
In the floor speech he gave introducing his marijuana research bill last month, for example, the senator told the story of a young constituent suffering from severe epilepsy, whom he called a “friend.”
“The current treatment for his condition, with no guarantee of success, would be invasive brain surgery,” Hatch said. “This poor family is seeking help, yearning for a way for their child to live a safe and healthy life. Compounds found in marijuana could significantly mitigate the severity of my friend’s seizures and even help him lead a normal life. But current regulations prevent the development of any such treatment from going forward. So this young man is left to suffer.”
Far from the dire warnings he deployed in the 1996 hearing, Hatch has even taken to jokingly using pot puns in his statements about cannabis. A lot of them.
“As I said last month on the Senate floor, it’s high time we give stone-cold serious consideration to medical marijuana research. For twenty years, states have delved into the weeds of potential uses, but research has often been stymied by a puffed-up regulatory bureaucracy. As doctors strain to find effective alternatives to addictive opioids, they need more than token gestures from Congress; they need potent solutions. That’s why the bill we have rolled out is not a half-baked policy proposal but an earnest effort to address a chronic problem in the system. With growing support from Democrats and Republicans alike, this joint effort represents a unique hash of ideas from members of both parties, and a budding opportunity for real bipartisan reform. We need to blaze a trail for a new era of medical research, and this legislation will light the way.”
While many experts maintain that marijuana is not addictive they have not made the same claim about puns.
— Senator Hatch Office (@senorrinhatch) October 13, 2017
Last week, Hatch’s office tweeted a link to a Marijuana Moment story about his pressing U.S. Attorney General Jeff Sessions on marijuana research during a committee hearing, and then followed up with a second tweet facetiously wondering “why anyone would be surprised to find out Orrin Hatch reads ‘Marijuana Moment.'”
— Senator Hatch Office (@senorrinhatch) October 19, 2017
Can’t figure out why anyone would be surprised to find out Orrin Hatch reads “Marijuana Moment.” https://t.co/YvCXHZTdbU
— Senator Hatch Office (@senorrinhatch) October 19, 2017
Hatch filed a similar marijuana research bill last year, but did not so clearly endorse cannabis’s medical potential in his related remarks upon introduction as he did this time. And his staff didn’t do nearly as much press outreach or social media work about the earlier bill.
Hatch’s State May Legalize Medical Marijuana Soon
The senator’s increasingly involved work on marijuana could be related to the issue’s growing prominence in Utah. Activists there are currently collecting signatures to place a medical cannabis measure on the state’s 2018 ballot.
While Hatch hasn’t publicly weighed in on how he plans to vote on the initiative if it qualifies, he did recently sit down with its organizers, and his office tweeted about the meeting.
— Senator Hatch Office (@senorrinhatch) September 22, 2017
Alex Iorg, campaign manager for the Utah Patients Coalition, which is behind the ballot measure, was at the half-hour meeting with the senator.
Hatch’s “change in direction and understanding is very similar to what most people have gone through since the mid-90s. Back then there wasn’t a lot of research,” Iorg told Marijuana Moment in an interview. “He’s learned more, and I think of my parents. Back then they would’ve been totally against it. And now they’re open to the medical value of cannabis, and they’re strong, conservative [Mormons]. I’m sure that his evolution in acceptance of this has evolved right along with most people in Utah.”
A big part of that evolution has been driven by the stories of patients like the young man with epilepsy that Hatch mentioned on the Senate floor last month.
“Those stories have made a huge impact and I think they are mostly to account for the change that you saw in Hatch in mid-90s to today,” said Iorg, who once interned in the senator’s office. “It is those patient stories. They are powerful.”
If Hatch does end up endorsing the ballot measure, it would put him opposite the official stance of The Church of Jesus Christ of Latter-day Saints, commonly referred to as the Mormon Church or LDS, of which he is a member.
“We believe that society is best served by requiring marijuana to go through further research and the FDA approval process that all other drugs must go through before they are prescribed to patients,” the Church said in a statement earlier this year.
But while the Church isn’t necessarily on board with the ballot measure, Iorg’s campaign is getting a lot of support from its individual devotees.
“Among LDS conservative members, we’re polling over half. These are conservative, very active Mormons and we’re finding that what we considered probably our toughest demographic, most of them support our cause,” he said.
While the campaign hasn’t specifically pressed Hatch for an endorsement yet, Iorg thinks the senator would be open to considering it once the measure qualifies for the ballot early next year.
“He was very open and genuinely interested,” the activist said of the senator’s disposition in the recent meeting. “He gave great feedback and asked good questions.”
Perhaps because of his faith, Hatch himself admits he is an “unlikely” ally for medical cannabis patients.
“I’m against illicit drug use and have always been very strong in these areas,” he told Roll Call. “But I’m also a pioneer in good medicine and how we can help doctors and scientists… I have to make these decisions based upon what’s right for the people of Utah and the people of this country. And there’s no reason to be afraid of medical marijuana.”
That’s a far cry from two decades ago, when Hatch argued from the dais of the Senate Judiciary Committee that there are many reasons people should fear legalizing medical cannabis.
Below, read documents from the 1996 Senate hearing Hatch chaired on state medical cannabis legalization, provided to Marijuana Moment by freedom of information journalist Emma Best:
Photo courtesy of Gage Skidmore.
Marijuana Banking Bill Would Save Federal Money, Congressional Budget Office Says
The federal government would save money if a bipartisan bill to give marijuana businesses access to banks is approved, according to a report released by the Congressional Budget Office (CBO) on Friday.
The legislation, which cleared the House Financial Services Committee in a bipartisan vote of 45 to 15 in March, would change federal law to protect financial institutions that service the cannabis industry from being penalized by regulators. That reform would set off a chain of events, beginning with a likely increase in the number of banks accepting deposits from those businesses, CBO reasoned.
Assuming the bill takes effect near the end of the 2019 fiscal year, the office estimates that starting in 2022, banks would see a $1.2 billion increase in deposits, and credit union deposits would grow by $200 million. By 2029, the amounts “would rise to $2.1 billion and $350 million, respectively.”
Because those deposits would have to be insured through the Federal Deposit Insurance Corporation (FDIC) and the National Credit Union Administration (NCUA), the CBO took into account the possibility that individual financial institutions will fail, and the estimated cost of resolving those failures is $5 million.
That said, those direct spending costs would be “offset by assessments levied on insured financial institutions,” which would amount to about $9 million.
“As a result, CBO estimates, H.R. 1595 would decrease net direct spending by $4 million over the 2019-2029 period,” the office reported.
Rep. Ed Perlmutter (D-CO), the bill’s chief sponsor, told Marijuana Moment that its enactment would have benefits beyond fiscal savings.
“Getting cash off our streets and making our communities safer will come at no cost to the federal government and actually save money while providing a much-needed long-term banking solution for legitimate marijuana businesses across the country,” he said.
“This CBO score should only increase the significant momentum in Congress behind passing the SAFE Banking Act,” Neal Levine, CEO of the Cannabis Trade Federation, told Marijuana Moment. “It is now apparent that we can help diminish a serious threat to public safety at no net cost to the federal government. We look forward to the bill passing through the House and hope the Senate will follow suit.”
There are some implementation costs to take into account, CBO says. The administrative costs are estimated to be $3 million. But the FDIC and NCUA are able to charge premiums on the financial institutions they regulate to cover much of those costs. The total net administrative costs would, therefore, be about $1 million.
The Federal Reserve would also have to spend funds to implement the bill, and that would reduce remittances to the Treasury Department. Those remittances are considered revenue, which is expected to decrease by about $1 million if the legislation is implemented.
Then there are costs related to other provisions of the bill. Financial regulators would have to update and issue new guidance, which would “cost less than $500,000 over the 2019-2024 period.”
The legislation also requires the Government Accountability Office to study barriers to entry in the marijuana industry and to financial services for minority- and women-owned cannabis businesses. The costs are estimated to be less than $500,000 annually from 2020 to 2024.
The CBO also estimated that enacting the legislation “would not increase on-budget deficits by more than $5 billion in any of the four consecutive 10-year periods beginning in 2030.”
The CBO outlined “several noteworthy areas of uncertainty” that could change the calculus.
1. New guidance from federal financial regulators could be more or less stringent than existing guidance implemented under the Obama administration, which could impact the amount of deposits banks and credit unions will receive.
2. Data on cannabis-related deposits is currently “limited,” as federal restrictions have forced marijuana businesses to operate on a largely cash basis. That means CBO’s estimates on the amount of deposits financial institutions will see could end up being “greater or smaller.”
3. If those estimates do end up being different, costs associated with the bank and credit union insurance funds “could be higher or lower depending on the amount of premium collections and capital deposits and on changes in the resolution costs for financial institutions.”
Sahar Ayinehsazian, an associate attorney at Vicente Sederberg LLP who specializes in cannabis banking, told Marijuana Moment that most of the figures lined up with her expectations. However, given that many marijuana businesses have gravitated toward credit unions rather than banks, she said the estimate increase in deposits to those financial institutions may well end up being larger.
“Looking at the chances of this legislation passing from an economic standpoint, I think [the CBO score is] good news,” she said.
Other advocates agreed that the CBO estimate should help efforts to advance the bill.
“For years, cannabis advocates have been preaching the net benefits SAFE Banking would have on consumers, patients, financial institutions, regulators and taxpayers. This CBO cost estimate confirms that,” Michael Correia, director of government relations for the National Cannabis Industry Association, told Marijuana Moment. “The increase of insured deposits, coming from the added certainty this legislation brings, far outweighs the minor administrative costs to implement this bill.”
The House marijuana banking bill currently has 184 cosponsors, and a companion Senate version has 30 lawmakers signed on. The committee of jurisdiction in the upper chamber has not yet set a hearing or a vote, but pressure is increasing.
Banking associations from all 50 states urged the Senate to take up the legislation earlier this week. Other organizations that have called for a resolution to the cannabis banking dilemma include the National Association of Attorneys General, which has endorsed the bill, and the National Association of State Treasurers, representing state treasurers and finance officials, which adopted a resolution last week in favor of the legislation’s passage.
Want 4 million more reasons why members of Congress should support the #SAFEBankingAct, which would allow cannabis businesses to access the banking system in the 33 states where it’s legal? @USCBO says the legislation will save taxpayers $4M over 10 years.
— American Bankers Association (@ABABankers) May 24, 2019
The new analysis is just the third time that the CBO, which is mandated to score bills that pass full committees, has issued a report on the economic impact of standalone cannabis legislation. The agency scored two marijuana research bills that cleared committees last year.
This story was updated to include comment from Perlmutter and Correia.
Federal Small Business Administration Pressed On Supporting Marijuana Industry
Sen. Jacky Rosen (D-NV) pressed a federal official responsible for advocating for small businesses on Wednesday about whether existing laws and regulations are preventing the growth of state-legal marijuana markets.
The line of questioning comes as members of Congress are preparing legislation aimed at removing barriers to small business assistance for cannabis industry participants.
The senator said at a hearing of the Senate Small Business and Entrepreneurship Committee that her state’s legal industry is attracting small businesses and entrepreneurs who are selling millions of dollars of product each month. She asked Major Clark, acting chief counsel of the office of advocacy at the Small Business Administration (SBA), about the unique barriers these companies face under federal prohibition.
“Senator, that’s a difficult question,” Clark replied. “We have not actually studied the issue of marijuana in that regard, and we have not because the federal government has not yet legalized it.”
“We do, in conversations with a lot of businesses, get inquires as to what they can do and how they can do it. But to actually do an analysis of it, we have not yet done that,” he said. “I’m sure that as soon as the federal government decides to legalize this substance, we will begin to study its impact and the ability to use it in a more economical context within the state.”
Watch the conversation about small business assistance for cannabis operators at 35:50 in the video below:
Rosen followed up to get Clark’s opinion about whether marijuana companies would benefit from some of the guidelines and resources the SBA offers to small businesses in other industries.
“These types of businesses can benefit from some of these types of things, but again, because this issue is an issue that has not reached the surface of being legalized, we have actually stayed away from trying to advise these businesses on these particular aspects,” he said.
Nevada’s cannabis industry cannot thrive without access to financial services. At yesterday’s @SmallBizCmte hearing, I asked what steps @SBAgov is taking to break down regulatory barriers for our nation’s legal marijuana businesses to ensure they can continue to grow. pic.twitter.com/lyfXGwpoRf
— Senator Jacky Rosen (@SenJackyRosen) May 24, 2019
Sen. James Lankford (R-OK), chair of the committee, weighed in on the issue after the Rosen’s time expired, saying that he recognizes the difficulty that federal agencies face when it comes to regulating a controlled substance.
“It is a unique challenge dealing with a Schedule I drug on the federal side and to also know that some states, including my own, have said that they want to allow it,” Lankford said, referring to the medical cannabis law that Oklahoma voters approved in 2018. “And the federal government and the [Food and Drug Administration] continues to study it and say there’s no medicinal gain from this product.”
“It’s a Schedule I drug. I get it,” he said. “The science, and whether it is SBA or whoever it is continues to be able to deal with that.”
While lawmakers push to get marijuana businesses access to federally authorized financial services, industry advocates say that SBA-specific reform legislation may be on the horizon.
The day after Rosen questioned the SBA official about cannabis policy, Khurshid Khoja, a board member for the National Cannabis Industry Association, said at a press conference on Capitol Hill that a bill was being drafted to “essentially get SBA services for cannabis businesses and for cannabis businesses from disproportionately impacted communities.”
Watch the SBA reform discussion at about 32:15 in the video below:
“The House Small Business Committee is looking into the issue and is interested in holding a hearing and drafting legislation this summer that addresses these issues,” a cannabis policy lobbyist who didn’t wish to be named in order to discuss plans that are in development, told Marijuana Moment separately.
Photo courtesy of Brian Shamblen.
GOP Congressman Exposes Flaws In VA Marijuana Research Projects
Rep. Matt Gaetz (R-FL) emphasized the importance conducting clinical trials on medical marijuana at the U.S. Department of Veterans Affairs (VA) on Tuesday, a topic on which he has often focused.
He also criticized the catch-22 of VA cannabis research, arguing that while the department is able to conduct clinical trials on marijuana, it doesn’t effectively publicize those studies, leaving veterans who might be interested in participating in the dark.
The congressman started by asking whether Mike Colston, director of mental health policy and oversight at the Department of Defense, felt that giving veterans access to medical cannabis could reduce suicides.
Colston said “there’s far more research to be done” and that there’s “insufficient evidence for or against that position.”
Gaetz cited research showing reductions in opioid use in states that have loosened cannabis laws, and he questioned whether “the current offramp for opioid addiction,” which typically involves prescribing long-term opioids that are less potent and less prone to abuse, “is a more effective offramp than medical cannabis.”
“I just think those are the three evidence-based therapies right now that meet the medical bar,” Colston said, referring to bupenehprine, methadone and naltrexone. “Obviously more research can change that.”
That prompted Gaetz to expand on VA policy as it pertains to medical cannabis. He asked for confirmation that the department’s doctors cannot currently recommend marijuana to veterans in states where it’s legal.
They can’t do that because “there’s a federal law against it right now,” Keita Franklin, national director of suicide prevention at the VA, claimed. (This has been a point of contention for legalization advocates, who argue that only the VA’s own internal administrative policies, and not an overarching federal law, blocks such recommendations.)
But VA officials can conduct clinical trials on marijuana, Franklin said.
“We have two ongoing research studies going on right now in this space,” she said. “I think we are open to research, yes.”
The congressman wanted to know if the VA publishes information about these studies and where to find it. The VA official wasn’t sure—and that was exactly Gaetz’s point.
“I don’t think anyone is clear, which is the source of my frustration because I think that there are a lot of these clinical trials that are seeking veterans,” he said. “The VA, due to a lack of clarity, won’t publicize that information or make it available, and then we’re unable to do the research that Captain Colston says is necessary to advance additional options for veterans trying to get off opioids and to stop them from killing themselves.”
Lawmakers have introduced legislation this session that would allow VA doctors to issue medical cannabis recommendations and require the department to conduct clinical trials on the plant’s potential therapeutic benefits for veterans, among other cannabis and veterans-related bills.
But if the VA is mandated to research the plant, Gaetz wants the department to better publicize the studies so that would-be participants actually know about them.
Photo courtesy of YouTube.