A panel of just five officials is now in charge of implementing Massachusetts’s voter-approved marijuana legalization law.
Advocates expressed concern amid news that four members of the new Cannabis Control Commission voted against last November’s marijuana initiative — opposite the 54% of voters who approved the measure. (A new poll released on Thursday found that 63% of Bay State voters now support legalization.)
Legal marijuana supporters took heart, however, in the appointment to the panel of Shaleen Title, a longtime anti-prohibition advocate and industry insider who actually helped to write the ballot measure.
Her new role marks the first time an activist who helped to craft a marijuana legalization law has been put in charge of implementing it.
Title first got involved in the fight to legalize marijuana in college as a member of NORML and Students for Sensible Drug Policy. After a stint working as a tax law consultant for Deloitte, she returned to activism as key staffer for Law Enforcement Against Prohibition, an organization of police professionals who speak out for drug policy reform.
In 2014, she co-founded THC Staffing Group, a recruitment firm that helps connect cannabis businesses with employees for the jobs they are looking to fill. Title chose to give up her ownership of the company in order to take on her new role as a public official regulating the marijuana industry.
(Full disclosure: Title has been a friend of mine for a decade, and serves with me on the board of directors for the nonprofit Marijuana Majority.)
Title was named to the new state cannabis regulatory commission this month in a joint appointment by Massachusetts Gov. Charlie Baker, Attorney General Maura Healey and Treasurer Deb Goldberg. She and her four new colleagues will craft regulations and licensing processes with the goal of rolling out legal cannabis in the Bay State early next year.
In this, the first interview she has granted since being named to the regulatory body, Title outlines her thinking as she takes on the most important role of her career and transitions from activist to public official.
In broad terms can you help us understand your main duties in your new role as a member of the Cannabis Control Commission?
The CCC is a brand new agency tasked with implementing Massachusetts’ new marijuana law. This entails setting up regulations for the new industry and a licensing process for cultivation, manufacturing, retail and testing, as well as policy development around things like edibles, packaging and advertising. Our deadline under the law is to begin accepting applications by April 1, 2018.
How meaningful do you think it is to have someone who helped draft the legalization measure be one of a small handful of people who are now in charge of implementing it? And how do you think your background working in the legalization movement and helping companies in the cannabis industry hire staff will inform your work as a public official?
I think it’s essential to have at least one person on the commission who has a historical understanding of the legal and cultural context around marijuana. To my mind, that holistic approach is crucial in order to fairly implement the law.
In terms of my legal and business background, having an existing knowledge of the complex cannabis laws and regulations is helping me to hit the ground running, but all of that can be learned from books. It’s the time I’ve spent organizing on the ground over the past fifteen years that leads me to honor different communities’ complex feelings toward cannabis, prohibition and regulation, particularly Black and Latino communities that have bore the brunt of prohibition.
Being of Indian descent, I also come from a culture myself in which cannabis has been used since the beginning of recorded history, so there’s a level of respect that comes with that.
Should voters who supported legalization be concerned that the four other members of the commission now charged with implementing the measure opposed it last November?
I don’t think so. None of them are knee-jerk prohibitionists. In my mind, voting yes on the initiative and having used marijuana before are not strict requirements to be able to do this job. While they may be relevant factors, there is a very long list of far more relevant requirements when you are creating a team of people to build a government agency from scratch.
I have been very vocal about my belief that working with people who are different from you yields better results, and that universal principle applies here as much as anywhere. You need people from different backgrounds and perspectives to criticize and challenge each other’s work. The more I get to know my new colleagues, the more impressed I am at the thoughtfulness that went into appointing a team with the diverse set of backgrounds needed to be able to tackle this difficult task.
What are some of the main challenges you and your fellow commissioners will face in getting Massachusetts’s new law up and running?
The primary challenge is meeting a tight deadline while being underfunded. The state treasurer estimated that our agency would need $10 million in the first fiscal year; as of now, we have about $2 million. Starting from scratch is also a major challenge. We currently have no staff and are operating out of temporary office space.
Most challenging for me personally has been the built-in inefficiencies for the sake of transparency. Because of the open meetings law, we can’t do regular check-ins or collaborate via Google Docs or Slack. We can’t even reply-all to emails.
But, anyone who has been involved in marijuana legalization knows that if you have the will, you can do what many people consider impossible, and often with very small groups working under the scrappiest of circumstances. I’m optimistic.
Finally, on a personal note, was it hard for you to give up your business to take on this new role? And do you still consider yourself an activist at the same time you’re a public official? How do you approach that balance?
All of my nonprofit, business and political projects have had the same goal: replacing prohibition with sensible policies that are fair and inclusive and promote health and safety. I will miss THC Staffing Group, but I’ll be working toward that same goal.
There have been a few turning points in my life where I was compelled to follow my gut instinct and immediately say yes, before I had a chance to think about it rationally. The first time was when I quit my job consulting in tax law to work on legalization full-time, and the second time was when I moved to Colorado by myself to work on Amendment 64. The third time was when the Treasurer’s office called me with the offer to appoint me as Commissioner.
While I’m admittedly going through a bit of a culture shock, being given a chance to help Massachusetts set a good example for other states in creating a newly legal market is a once-in-a-lifetime opportunity. Particularly as it relates to being able to implement the sections of the law that champions equity for communities that have been targeted by past criminalization policies — there’s nothing else I’d rather be working on.
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.