A major marijuana lobbying firm has apologized after sending a letter to Senate committee leadership concerning a bipartisan cannabis banking bill that contained “inappropriate” references to investments from China in a “misguided attempt” to push for amendments expanding the legislation.
The letter that was sent to Senate Banking Committee leaders last week took some by surprise—in part because it advocated for a significant revision to free up all financial services to the cannabis industry, including representation on major U.S. stock exchanges. But controversy also swelled around its argument that the expanded reform is necessary in order to compete against an illicit market funded by “Chinese-backed investors.”
The language was read by some as racially inflammatory, playing into xenophobic concerns over China and Chinese people in a way that risked alienating Asian advocates in the community.
Now The Liaison Group (TLG), which led the letter on behalf of SAFE Banking for Equity, is walking it back and apologizing to the various organizations that were listed as signatories but which did not receive an opportunity to review the draft before it was sent.
“The Liaison Group acknowledges that language referencing ‘Chinese-backed investments’ was a misguided attempt and poor judgment,” the statement says. “The reference was inappropriate and should not have been utilized. We wrongfully characterized and inappropriately singled out one element of the unregulated market by doing so.”
“TLG sincerely apologizes for the harm caused by this language and letter and is committed to doing better. Words matter, and it was never our intention to further harmful racist and xenophobic sentiments,” it says. “The SAFE4Equity affiliate organizations work to build and represent a more diverse and equitable industry and do not support the reference made in this letter. As the authors of this letter, we take full responsibility for our inappropriate actions and any harm they have caused.”
(Disclosure: TLG staffers support Marijuana Moment’s work through monthly pledges on Patreon.)
On Friday, several marijuana groups that comprise the SAFE Banking for Equity coalition submitted a revised letter to senators that omits the problematic language.
The coalition said in new statement attached to the letter that TLG “has sincerely apologized for the inclusion of such offensive sentiments and for the implied support of these individual organizations without their consent, unintentionally creating divisiveness that is distracting from the importance of Congress moving the SAFE Banking Act and other federal cannabis reforms forward that are desperately needed for the diverse array of equity operators, small operators, supporting small businesses, and other stakeholders of the state-legal, domestic cannabis industry we represent.”
The new, edited letter to lawmakers simply removes the references to Chinese investors but remained largely intact. Three of the nine affiliate organizations that were listed as signatories on the initial draft did not sign the amended version.
After the original letter was released, the Asian Cannabis Roundtable (ACR) released a statement imploring the authors to “retract inflammatory references and implied sentiments that equate ‘Chinese-backed’ investments to illegal activity.”
“Such statements are harmful as they perpetuate xenophobia and dehumanize the [Asian American, Native Hawaiian and Pacific Islander] population,” it says, adding that it encourages TLG and the affiliated National Cannabis Roundtable (NCR) to “make a meaningful donation to an organization working to support marginalized Asian communities.”
TLG did not mention whether in addition to revising the letter it would be taking the additional step of making the donation as recommended.
Kristin Jordan, founder and president of the board of ACR, told Marijuana Moment in a phone interview on Thursday that her hope is that responsible parties will take steps to educate themselves about “how to speak about issues like this that are sensitive to affinity groups like ours.”
But while the situation took time away from other work over recent days, Jordan said that she’s walked away from it with takeaways that underscored “that the advocacy community is strong.”
She and other leaders in the space “picked up the phone, because we know all these advocacy leaders—and folks were quick to respond, quick to recognize the issue and to identify their own culpability.”
“So I’ve been really excited and pleased to see the recognition that this is a harmful statement, that it has repercussions,” Jordan said. “We are in a month where we’re supposed to be celebrating Asian heritage, and this is a real blight on the advocacy that they are trying to do.”
“Our advocacy community—while there may be attempts to splinter us or maybe divide us in some way over policy issues—I think that the strength of our relationships, that the mutual respect that we have for one another, really trumps all of this,” she added.
The problematic language included in the letter to the committee last week seemed to echo rhetoric that’s become fairly common in Congress, where China-adjacent associations have been viewed with suspicion. Adding fuel to that fire in the marijuana space is recent reporting that’s linked investors from China to illegal cannabis cultivation domestically.
“The troubling thing is that when I talk to political insiders in D.C., they told me that this is D.C. parlance,” Jordan said. “This is not necessarily seen as inflammatory rhetoric.”
Advocates feel that quickly responding to this type of community concern is especially important in the marijuana space, given the movement’s focus on repairing the harms of racially disparate enforcement throughout the history of cannabis criminalization.
Ophelia Chong, founder of Asian Americans for Cannabis Education, wrote in a LinkedIn post on Wednesday that “TLG acted swiftly to correct this stumble and with grace.”
“I am grateful for the support our diverse communities in Cannabis,” she said. “We’ve all made stumbles and then turned them around to be a learning lesson.”
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While the pushback over the racially charged language in the letter led to the apology and reversal, the underlying ask from the coalition also rubbed some the wrong way, as it called for amendments to the SAFE Banking Act that go well beyond its current scope in a way that certain advocates feel would principally benefit large cannabis corporations without effectively addressing the harms of the drug war.
It’s one of the latest examples of how the debate over the banking legislation has evolved in the current Congress.
A marijuana financial services company separately revised its testimony on the legislation following pushback over remarks made at a Senate Banking Committee hearing this month where a compliance officer suggested a “pause” to further amend the legislation.
The next step for the SAFE Banking Act is to receive a committee markup, which Senate Majority Leader Chuck Schumer (D-NY) said he hopes will happen “in the near future.”
The plan is to pass the clean standalone bill out of committee—and then to offer amendments on the floor. Schumer and colleagues have emphasized that the legislation should be revised to include “criminal justice” provisions such as record expungements for people with prior marijuana convictions.
It’s also possible that the bill will be amended to account for concerns flagged by a Democratic senator, key federal officials and consumer advocacy groups, who said recently that a specific provision of the bill could inadvertently limit the ability of regulators to take action against people exploiting banking services.
Sen. Jacky Rosen (D-NV) also recently said that she wanted the SAFE Banking Act to pass with an amendment allowing cannabis businesses to access federal Small Business Administration (SBA) services.
Last month, Schumer said that he was “disappointed” that a so-called SAFE Plus package of cannabis reform legislation didn’t advance last year, saying “we came close,” but “we ran into opposition in the last minute.” He said lawmakers will continue to “work in a bipartisan way” to get the job done.
The majority leader has been holding meetings with Democratic and Republican members in the early months of the new Congress to discuss cannabis reform proposals that might have bipartisan buy-in this year.
Sen. Cory Booker (D-NJ) said recently that lawmakers are working to “resurrect” the cannabis reform package, acknowledging that failure to advance a banking fix for the industry “literally means that hundreds of businesses go out of business.
Rep. Earl Blumenauer (D-OR), who is a lead sponsor of the House version of the SAFE Banking Act, said at a recent press briefing that thinks it’s important that advocates and lawmakers align on any incremental proposals to end the drug war, warning against an “all-or-nothing” mentality.
The American Bankers Association (ABA) also recently renewed its call for the passage of the legislation. And all 50 of its state chapters did the same, as did insurance and union organizations, in recent letters to congressional leadership.
Read the revised letter from SAFE Banking for Equity below:
Photo courtesy of Philip Steffan.