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Montana Governor’s Marijuana Bill Revived After Initial Committee Defeat

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Republicans joined with Democrats to vote down the cannabis implementation bill, only to resurrect it later.

By Arren Kimbel-Sannit, Daily Montanan

Mike Milburn, Gov. Greg Gianforte’s senior advisor, was on Thursday walking the Capitol halls past the legislative chambers—where the governor had just visited to gladhand and backslap with House Republicans—when Sen. Jason Ellsworth, R-Hamilton, appeared from a side door to the Senate floor to get his attention.

Milburn leaned in to listen.

“The bill is coming back,” Ellsworth told the former House Speaker. “701 is coming to the floor.”

That morning, grand ambitions from the governor’s office and the Republican legislative establishment for implementing recreational marijuana in Montana were nearly derailed in committee when the GOP’s right flank and Democrats joined to vote down this session’s flagship pot proposal, only for the bill to be revived less than an hour later after a series of frenzied negotiations within the majority party.

Democrats had already been planning to vote against the bill, House Bill 701; despite propping up a comprehensive recreational pot market, the proposal diverted most revenues from taxes on the product to the state general fund, a departure from the language in I-190, the legalization initiative that voters approved last year.

But a contingent of Republicans voted against the bill as well. Some just don’t like marijuana, or are sensitive about adult use due to the rocky rollout of medical marijuana many years before. Some, echoing a concern among Democrats, worried about the speed of the process. For months, lawmakers and stakeholders from the governor’s office and the industry had been crafting the bill, but it only had its first committee hearings this week, with the days ticking down until the deadline to transmit revenue bills to the opposite chamber.

HB701, sponsored by Rep. Mike Hopkins, R-Missoula, was slated to hit the floor Tuesday, the first day back after a four-day Easter break.

“We flat ran out of time,” said House Speaker Wylie Galt, R-Martinsdale.

But the primary reason for opposition, at least among the GOP, had less to do with what was happening in the House Taxation Committee and more to do with what was going on across the hall, where lawmakers in the Business and Labor Committee—which heard HB701 earlier in the week—were considering two other marijuana proposals.

The first, HB670, passed 11-9. That bill, crafted by Reps. Derek Skees and Matt Regier, both Kalispell Republicans, would tax recreational marijuana at a lower rate (15 percent) than HB701 (20 percent) while slightly raising the tax on medical marijuana. It would set aside most of the tax revenue for paying down public employee pension obligations while leaving some in a trust fund to address “the economic and social costs” of legalization, while HB701 would put most of the money into the state general fund.

The second was Rep. Brad Tschida’s HB707, which would overhaul I-190’s taxation structure entirely, only taxing wholesale marijuana at a rate of 20 percent, a system modeled after the state’s alcohol regulations. Tschida, R-Missoula, said earlier this week that he hoped to have part of his bill inserted into the main vehicle, HB701. But HB707 failed.

Meanwhile, the Taxation Committee was preparing to vote on HB701 as word reached from across the hall that one of the other bills had fallen. To some House Republicans, putting all of the Legislature’s weight behind HB701 without considering all other options didn’t make sense; they didn’t like aspects of the bill, especially its approach to spending and saving pot revenues, and the fact that there was little time for amendments in the House frustrated them.

So four Republicans voted no: Rep. Lola Sheldon-Galloway, R-Great Falls; Rep. Caleb Hinkle, R-Belgrade; Rep. Scot Kerns, R-Great Falls and Rep. Jeremy Trebas, also of Great Falls. Along with a unified Democratic block, which had been fighting to increase funding for the environment and public lands in HB701 per the language in I-190, it was enough to kill the bill 10-12.

“We wanted all three bills to come across the House floor. I didn’t realize that Taxation was going to be voting on the big bill, because we had the smallest hearing,” said Sheldon-Galloway, who preferred the Skees-Regier plan due to the fact that it invested weed revenues in an interest-collecting trust.

It was a rare moment of accidental transparency for the Republican majority. The hallway between the two committee rooms was abuzz, with more reporters and lobbyists arriving by the minute. At first, several key players—Hopkins, Rep. Becky Beard, the House Taxation Committee Chair, Rep. Mark Noland, R-Bigfork, the Business and Labor Chair, Sen. Jason Ellsworth, who will likely ferry the bill in the Senate, and others—huddled in a hallway behind a glass double door, out of earshot from the public, trying to put together the pieces.

The group dispersed. In one corner, Ellsworth leaned over Hinkle, speaking in quiet, urgent tones about vote counts. Other atomized groups clustered elsewhere in the vicinity, waiting for further clarity, processing what had happened. The bill that had failed, in addition to being the longest and most detailed marijuana plan, is also the bill that promised to fund the governor’s substance abuse treatment program, the HEART Fund, among other key priorities.

Even worse, from the perspective of the GOP, is total gridlock would mean that the Legislature could lose its chance to amend the language of I-190, an initiative that passed with 53 percent support in 2020 despite potentially violating the constitution by prescribing expenditure of tax revenues, a proprietary authority the Legislature guards jealously.

After the flurry, the committee decided to return just after noon, and the hallways cleared. Was one of the session’s weightiest bills—in both the literal and figurative sense—dead? Would its language be merged with Skees’ bill?

The key issue, as Sheldon-Galloway described, was the lack of options with limited time. She said she wanted to see the bills be reconciled in conference committee, and expected several amendments. Hinkle said something similar: All three bills should make it to the House floor, and ideally all three should make it to the Senate.

Lo and behold, Business and Labor returned from recess, Republicans took HB707 off of the table, and on a largely partisan vote passed it onto the floor. Noland and the rest of his committee hovered in front of the television that showed how the Taxation Committee, now back from its break, would act.

Indeed, Rep. Josh Kassmier, R-Fort Benton, moved to bring the bill off the table. Though it still lacked Democratic support, the motion passed, and shortly thereafter, Sheldon-Galloway, Hinkle, and the rest switched their votes, sending HB701 to the floor, alongside HB670 and HB707.

“We wanted more options, that’s what the whole thing was about,” Noland said. “More options gives we the people better chances. Some don’t like one of those bills. Some have hiccups with the big bill. If we get everything moving, then we can discuss all of these bills.”

Hopkins couldn’t be reached for comment in time for publication.

Beard and other lawmakers began working on amendments to HB701 after the dust settled. On the House floor Thursday, she said to expect some proposed changes to the tax rate, implementation date (retail could launch as early as next January), among other areas. Democrats, who want to expand HB701’s provision allowing for the re-sentencing of incarcerated people with marijuana convictions, loosen licensing restrictions on those with past drug charges, and above all put as much money toward lands and conservation as possible, plan to bring their amendments either or on the House floor or as the bill(s) makes its way through the Senate.

J.D. “Pepper” Petersen, a dispensary owner and CEO of the Montana Cannabis Guild, said he expects most of the action to occur in the upper chamber. Like many dispensary owners, he’s not a fan of HB701, which has one provision providing for counties to easily opt-out of recreational marijuana and another preventing outdoor grows. However, he predicted that to be the final vehicle.

“701 is the show,” Petersen said.

Galt couldn’t say with certainty that HB701 would get the votes in the House.

“It’s gonna be really interesting,” he said, referencing another profitable vice regulated in the state of Montana. “It’ll be a roll of the dice.”

This piece was first published by Daily Montanan.

Minnesota Marijuana Legalization Bill Will Get House Floor Vote Next Month, Majority Leader Says

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Business

New House Bills Would Make Cannabis Businesses Eligible For Federal Small-Business Aid

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Lawmakers in the U.S. House of Representatives have introduced three new bills to make state-legal marijuana businesses eligible for federal small business services, including loans, disaster relief and grant programs.

The package of legislation is aimed at establishing parity for cannabis businesses, which are currently prohibited from receiving federal aid due to marijuana still being classified as a Schedule I controlled substance. The country’s legal cannabis industry nevertheless now supports nearly 320,000 full-time jobs in the U.S., according to industry estimates.

The measures are largely similar to legislation introduced by the lawmakers in 2019, with some small changes.

One bill, sponsored by House Small Business Committee Chairwoman Nydia Velázquez (D-NY), would allow marijuana businesses to access resources from the federal Small Business Administration (SBA). The Ensuring Safe Capital Access for All Small Businesses Act of 2021, which had not been assigned a bill number as of Tuesday afternoon, would expand access to services such as microloans, disaster assistance and the agency’s loan guaranty program.

“With more and more states pursuing legalization, including my home state of New York, there are a growing number of legitimate small businesses that are excluded from critical SBA programs,” Velázquez said in a statement, noting that much of the cannabis industry consists of small businesses.

Compared to Velázquez’s 2019 bill, the new version adds clauses meant to expand the availability of services. While the 2019 bill applied to SBA itself, provisions in the new legislation also prevent SBA intermediaries, private lenders and state and local development companies from declining to work with businesses simply because of their marijuana-related work.

Another new section deals with debentures—certain unsecured loan certificates—and clarifies that SBA may not decline to purchase or guarantee a debenture just because of a business’s involvement in cannabis. Nor can other small business investment companies decline to provide assistance to the cannabis sector.

“This legislation will spark growth by extending affordable capital to small firms in the cannabis space,” she continued. “Simultaneously, the bill acknowledges the structural disadvantages facing entrepreneurs of color and seeks to level the playing field.”

Another newly refiled measure, H.R. 2649, sponsored by Rep. Dwight Evans (D-PA), would establish a U.S. Small Business Administration (SBA) grant program to provide funding to state and local governments to help them navigate the licensing process for cannabis businesses. The bill, which also removes marijuana from the Controlled Substances Act, specifies that the grant money should be used to benefit communities disproportionately impacted by the drug war.

“My bill would act as a poverty-buster and help homegrown small businesses, which are the backbone of our economy and our neighborhoods. We need to make sure that the booming legal cannabis industry does not become consolidated in the hands of a few big companies,” Evans said.


Marijuana Moment is already tracking more than 1,000 cannabis, psychedelics and drug policy bills in state legislatures and Congress this year. Patreon supporters pledging at least $25/month get access to our interactive maps, charts and hearing calendar so they don’t miss any developments.

Learn more about our marijuana bill tracker and become a supporter on Patreon to get access.

A third bill, H.R. 2649, from Rep. Jared Golden (D-ME), would prohibit SBA partners that provide guidance and training services from denying help to businesses solely because of involvement in cannabis. The changes would affect providers such as SBA’s Small Business Development Centers, Women’s Business Centers and the Veterans Business Outreach Centers, among others.

“Our continued economic recovery depends on the health of American small businesses of all kinds. Especially in this environment, no Maine small business owner should be turned away from crucial SBA programs that could help them create jobs and lift up the economy,” said Rep. Golden. “My bill would help address this problem by providing small business owners directly or indirectly associated with the cannabis industry with access to the services and resources they need to get their small businesses off the ground and grow.”

Meanwhile, federal lawmakers have been making headway on other cannabis-related proposals. The House passed a cannabis banking bill on Monday, and broader legislation to legalize cannabis at the federal level is expected to be introduced soon.

The banking legislation would ensure that financial institutions can 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. The full House passed the bill on a 321–101 vote.

“Even if you are opposed to the legalization of cannabis, you should support this bill,” sponsor Rep. Ed Perlmutter (D-CO) said on the House floor. “The fact is that people in states and localities across the country are voting to approve some level of cannabis use, and we need these cannabis businesses and employees to have access to checking accounts, payroll accounts, lines of credit, credit cards and more.

Other Democrats, including Senate Majority Leader Chuck Schumer (D-NY), Senate Finance Committee Chairman Ron Wyden (D-OR) and Sen. Cory Booker (D-NJ) are working on legislation that would end federal cannabis prohibition completely.

Schumer said last week that the long-awaited proposal would be introduced “shortly” and placed on the floor “soon.” Schumer has so far declined to discuss the bill’s specifics, though he’s stressed that it will prioritize small businesses and people most historically impacted by the drug war.

In an interview with Marijuana Moment this week, Schumer worried that passage of the House banking bill could actually undermine broader congressional cannabis reform this year.

On the House side, Judiciary Chairman Jerrold Nadler (D-NY) said recently that he plans to reintroduced his own legalization bill, the Marijuana Opportunity, Reinvestment and Expungement (MORE) Act, which cleared the House in a landmark vote last year but did not advance in GOP-controlled the Senate.

Meanwhile, support for legalization among U.S. voters continues to grow. More than 9 in 10 Americans (91 percent) now support legalizing cannabis for either medical or adult use, according to a Pew Research Center poll released on Friday. Sixty percent of respondents said that cannabis should be legal for both medical and adult use. Thirty-one percent said it should be legalized for therapeutic purposes only, while just eight percent said it should continue to be criminalized across the board.

A majority of those in every age, race and political demographic included in the poll said they feel marijuana should be legal in some form, although many Republicans remain wary of adult-use legalization. Seventy-two percent of Democrats favored both medical and adult-use legalization compared to only 47 percent of Republicans.

Among the minority in opposition to federal legalization: President Joe Biden (D). White House Press Secretary Jen Psaki said last month that the president’s position on the issue “has not changed,” meaning he still opposes the reform. on Tuesday, Psaki refused to say whether Biden would sign or veto a cannabis legalization bill if passed by Congress.

The president instead backs modestly rescheduling the plant, decriminalizing possession, legalizing medical cannabis, expunging prior marijuana records and letting states set their own policies.

Read the full text of the new legislation below:

Ensuring Safe Capital Access for All Small Businesses Act of 2021 by Marijuana Moment on Scribd

Ensuring Access to Counseli… by Marijuana Moment

Homegrown Act by Marijuana Moment on Scribd

Schumer Worries Senate Marijuana Banking Vote Could Undermine Broader Legalization Push

 

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Biden Won’t Commit To Sign Marijuana Bill If Passed By Congress, Press Secretary Says

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White House Press Secretary Jen Psaki on Tuesday declined to say whether President Joe Biden would sign or veto a bill to federally legalize marijuana if it arrives on his desk, noting that his cannabis policy position is at odds with broader proposals that congressional Democratic leaders are working on.

She was also asked about his stance on marijuana banking reform, the disconnect between public opinion favoring legalization and the president’s opposition and whether Biden plans to revisit clemency applications for those facing federal sentences over cannabis.

The noncommittal response to the legalization question comes on the unofficial cannabis holiday 4/20—a day that has seen a wide range of politicians, including Senate Majority Leader Chuck Schumer (D-NY), voice support for comprehensive marijuana reform.

Psaki was pressed on the Senate leader’s remarks and asked whether Biden would support legislation to end federal cannabis prohibition if Congress approved it.

“The president supports leaving decisions regarding legalization for recreational use up to the states, rescheduling cannabis as a Schedule II drug so researchers can study its positive and negative impacts and, at the federal level, he supports decriminalizing marijuana use and automatically expunging any prior criminal records,” she said. “He also supports legalizing medicinal marijuana so that’s his point of view on the issue.”

Biden’s positions to that end are well known, but an outstanding question has been whether his opposition to adult-use legalization is so strong that he would reject a reform proposal such as those currently being drafted in the House and Senate.

Asked directly what action the president would take if a federal legalization bill was sent to his desk, Psaki signaled that he wouldn’t be inclined to sign it, stating “I just have outlined what his position is, which isn’t the same as what the House and Senate have proposed, but they have not yet passed a bill.”

The reporter followed up to ask about a separate cannabis pledge Biden made as a presidential candidate, when he said people incarcerated in federal prisons over non-violent marijuana offenses should be released.

Psaki said that would be addressed if cannabis was rescheduled to Schedule II—a dubious claim given that there are still serious penalties for offenses involving substances in that category as well. She also didn’t provide any insight into whether the president is proactively pushing for the modest scheduling change.

Later in the briefing, the press secretary was asked where Biden stands on legislation to protect banks that service state-legal marijuana businesses from being penalized by federal regulators. The House approved the Secure and Fair Enforcement (SAFE) Banking Act along bipartisan lines on Monday.

She said it was a “good question,” but she wasn’t sure and told the reporter she would follow up with a response later.

When pushed on Biden’s opposition to the legalization in the face of mounting, majority support among Americans, Psaki said that while he’s in favor of decriminalization and legalizing medical marijuana, he wants more research on the “positive and negative effects” of adult-use legalization.

“He’ll look at the research once that’s concluded,” she said. “Of course we understand the movement that’s happening toward it. I’m speaking for what his position is and what long, consistently has been his position. He wants to decriminalize, but again, he’ll look at the research of the positive and negative impacts.”

The press conference ended with a final question about cannabis policy—specifically whether the Biden administration plans to revisit requests for clemency for federal cannabis convictions. The reporter cited the case of Luke Scarmazzo, who was sentenced to 22 years in federal prison for operating a state-legal medical cannabis business in California, as an example.

“Given, as you’ve noted in the briefing, the president’s support for decriminalization, support for expunging exactly these types of offenses, are there any plans to revisit some of those bids for clemency?” the reporter asked.

“Well, I would just take it as an opportunity to reiterate that the president supports legalizing medicinal marijuana,” Psaki said. “It sounds like this would have been applicable in this case, and of course decriminalizing marijuana use and automatically expunging any prior criminal records. In terms of individual cases, I can’t get ahead of those obviously.”

These question come, of course, on 4/20. But they also come at a time when there’s a concerted push in both chambers of Congress to seize the opportunity they have with Democratic control to pass legalization legislation.

Schumer, Senate Finance Committee Chairman Ron Wyden (D-OR) and Sen. Cory Booker (D-NJ) have been working on a bill on their side. The majority leader told Marijuana Moment on Monday that he’s working to push the president in a pro-legalization direction as they draft the measure.

Schumer said last week that the legislation will be introduced and placed on the floor “soon.”

On the House side, Judiciary Chairman Jerrold Nadler (D-NY) said recently that he plans to reintroduced his legalization bill, the Marijuana Opportunity, Reinvestment and Expungement (MORE) Act, which cleared the chamber last year but did not advance in the Senate under GOP control.

Schumer Worries Senate Marijuana Banking Vote Could Undermine Broader Legalization Push

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Culture

How Politicians Are Celebrating The Marijuana Holiday 4/20 This Year

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The country has come a long way since the days of politicians dismissing or shying away from marijuana issues. And a good example of that shift is the ever-growing number of lawmakers who are leaning into the cannabis holiday 4/20 with calls for reform.

For example, to kick of Tuesday’s Senate session, Majority Leader Chuck Schumer (D-NY) spoke on the floor about the need to end federal marijuana prohibition, saying that “hopefully the next time this unofficial holiday 4/20 rolls around, our country will have made progress.”

Then there are the tweets—so many tweets—from state and congressional lawmakers, office seekers and regulators marking the occasion. It’s become a theme each year, and as more states pursue legalization, it seems more elected officials have grown comfortable embracing the holiday in their own ways.

Here’s what politicians are saying about cannabis this 4/20: 

Members of Congress

Congressional candidates

State officials and parties

Local officials

Former federal officials

International lawmakers

Meanwhile, dozens of brands and organizations are also celebrating 4/20 with a variety of promotions, events and calls to action.

Schumer Worries Senate Marijuana Banking Vote Could Undermine Broader Legalization Push

Photo courtesy of Brian Shamblen.

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