A coalition of more than 100 organizations—including NAACP, ACLU and Human Rights Watch—is coming together to call on congressional leadership to pass far-reaching legislation that would not only federally legalize marijuana but take additional steps to repair the damage of the war on drugs, which has been waged in a racially discriminatory manner.
“We are encouraged by the progress around marijuana reform at the state and federal level,” the groups wrote, pointing to rapidly changing local cannabis laws and a growing number of pending proposals on Capitol Hill. “While this progress is promising, we insist that any marijuana reform or legalization bill considered by Congress include robust provisions addressing social justice and criminal justice reform.”
The organizations are specifically backing the Marijuana Opportunity Reinvestment and Expungement (MORE) Act, a bill filed last month by House Judiciary Committee Chairman Jerrold Nadler (D-NY).
Among other things, the legislation would remove cannabis from the Controlled Substances Act, create processes for expungement and resentencing of prior convictions and block agencies from denying access to federal benefits or citizenship status for immigrants on the basis of marijuana use.
It would also set a new a five percent federal tax on marijuana sales, with some directed toward job training and legal aid for people impacted by prohibition enforcement as well as loans for small marijuana cannabis owned and operated by socially and economically disadvantaged individuals.
Sen. Kamala Harris (D-CA), a 2020 presidential candidate, is sponsoring companion legislation in the Senate.
Calling the bill an important step “to bolster communities ravaged by the war on drugs,” the letter pushes congressional leadership to ensure that it is “swiftly marked up and immediately scheduled for floor consideration.”
It was delivered on Thursday to the offices of House Speaker Nancy Pelosi (D-CA), Minority Leader Kevin McCarthy (R-CA), Majority Leader Steny Hoyer (D-MD) and Minority Whip Steve Scalise (R-LA).
Also included are Nadler and Judiciary Committee Ranking Member Doug Collins (R-GA), who is cosponsoring separate cannabis reform legislation that would allow states to implement their own legalization policies but does not contain restorative justice provisions.
“The war on drugs, which includes the war on marijuana, devastated the lives of generations of African American and Latinx Americans from low-income communities,” the groups, led by the Center for American Progress (CAP), wrote. “These individuals were disproportionately targeted and brought into the criminal justice system for engaging in marijuana activity that is increasingly lawful.”
Maritza Perez, senior policy analyst for Criminal Justice Reform at CAP, said in a press release that the bill is “the most far-ranging marijuana reform bill introduced in Congress to date.”
“Communities of color have been on the frontlines of this country’s drug war and should not have to continue waiting for a measure of justice, especially while others are generating extraordinary wealth for marijuana activity that sent Black and Latinx individuals to prison,” she added in an email.
Hilary O. Shelton, director of the NAACP Washington Bureau said that “many of the communities served and represented by the NAACP have been among the hardest hit by our nation’s outdated and misguided marijuana laws.”
“From robbing us of the talent and promise of our young people, to the breaking-up of families, to reabsorbing returning citizens who cannot take full advantage of many of the federal services offered to other Americans, our communities feel the urgency of enacting this legislation,” he said. “Thus, we have urged the Congress to act as quickly as possible to correct the flaws in the current law and move towards beginning to rectify decades of unnecessary harshness.”
Also signing on to the letter are Leadership Conference on Civil and Human Rights, Legal Aid Society, National Action Network, National Association of Criminal Defense Lawyers, National Association of Social Workers, National Immigrant Justice Center, National Immigration Law Center and United Food and Commercial Workers International Union.
“Criminal justice involvement deprives individuals from low-income communities of color equal access to economic opportunity,” the groups wrote. “Incarceration robs families and communities of breadwinners and workers. Thus, any marijuana reform bill that moves forward in Congress must first address criminal justice reform and repair the damage caused by the war on drugs in low-income communities of color.”
Cannabis industry and drug reform groups such as 4Front Ventures, Drug Policy Alliance (DPA), Harm Reduction Coalition, Law Enforcement Action Partnership, NORML and Students for Sensible Drug Policy are also signatories of the letter.
“This diverse assortment of organizations coming together to support Chairman Nadler’s bill to legalize marijuana underscores the strength of the reform movement,” said NORML Political Director Justin Strekal. “With the continued growth of support from nearly every corner of the political spectrum, comprehensive reform is closer than ever.”
Queen Adesuiyi, policy coordinator for DPA, said that “for advocates and communities most devastated by the war on marijuana, the current opportunity that Democratic leadership has to end prohibition with a racial and economic justice lens could not have come sooner.”
“From historic rates of public support for legalization to House Judiciary Chairman Nadler’s recent introduction of the most comprehensive marijuana reform bill strongly backed by civil rights and criminal justice groups – Democratic leadership have what they need to swiftly move on ending prohibition and repairing its damage,” she said.
The groups’ collective endorsement of the MORE Act comes at a time when the conversation around marijuana on Capitol Hill is increasingly shifting from whether to legalize it to how to do so.
Nadler filed the MORE Act shortly after the Judiciary Committee’s Crime, Terrorism and Homeland Security Subcommittee held a hearing focused on ending prohibition, which surfaced support for cannabis reform from both sides of the aisle while revealing disagreements on whether racial justice and equity measures need to be included in marijuana legislation.
“The MORE Act’s targeted programs will serve to empower historically underserved communities that bore this nation’s drug war,” the new letter says. “It will also reduce racial disparities in the criminal justice system and protect people from unequal marijuana enforcement. Justice requires that marijuana reform policy in Congress first de-schedule and repair past harms.”
Several of the signatory groups joined together last month to form the Marijuana Justice Coalition, which issued a statement of principles arguing that “any legislation that moves forward in Congress should be comprehensive” and “frame legalization as an issue of criminal justice reform, equity, racial justice, economic justice, and empowerment, particularly for communities most targeted by over-enforcement of marijuana laws.”
This story has been updated to reflect the fact that the Minority Cannabis Business Association removed itself as a signatory of the letter because it “does not want our support of the social equity provisions of the MORE Act to be conflated with opposition to the SAFE Banking Act or any other narrowly-tailored financial services legislation which would provide relief for minority cannabis businesses that are disproportionately impacted by the lack of access to capital.”
GOP Senator Presses Treasury Secretary On Tax Credits For Marijuana Businesses
A Republican senator recently pressed the head of the Treasury Department on whether marijuana businesses qualify for a federal tax benefit.
During a Senate Finance Committee hearing on Wednesday, Treasury Secretary Steven Mnuchin was asked about the “opportunity zone” tax credit, which is meant to encourage investments in “distressed,” low-income communities through benefits such as deferrals on capital gains taxes.
Sen. James Lankford (R-OK), whose state’s voters approved a medical marijuana ballot measure in 2018, told Mnuchin that businesses that derive more than five percent of their profits from things like alcohol sales are ineligible for the tax credit, but there’s “not a definition dealing with cannabis businesses.”
“Are they within that five percent amount or are they not at all because there’s a federal prohibition on cannabis sales?” the senator asked.
“I’m going to have to get back to you on the specifics,” Mnuchin replied.
“That’d be helpful to get clarity because there are cannabis businesses across the country that, if they fall in opportunity zones, they’ll need clarification on that,” Lankford said. “When you and I have spoken about it before—it’s difficult to give a federal tax benefit to something that’s against federal law.”
Lankford, who opposes legalization and appeared in a TV ad against his state’s medical cannabis ballot measure, has raised this issue with the Treasury secretary during at least two prior hearings. When he questioned whether cannabis businesses qualify for the program last year, he clarified that he personally does not believe they should.
While Mnuchin’s department has yet to issue guidance on the issue, he said in response to the earlier questioning that his understanding is that “it is not the intent of the opportunity zones that if there is this conflict [between state and federal marijuana laws] that has not been cleared that, for now, we should not have those businesses in the opportunity zones.”
Mnuchin has also been vocal about the need for Congress to address the lack of financial resources available to state-legal marijuana businesses. Because so many of these companies are forced to operate on a largely cash-only basis, he said the Internal Revenue Service has had to build “cash rooms” to store their tax deposits.
“There is not a Treasury solution to this. There is not a regulator solution to this,” he said during one hearing. “If this is something that Congress wants to look at on a bipartisan basis, I’d encourage you to do this. This is something where there is a conflict between federal and state law that we and the regulators have no way of dealing with.”
Last week’s Finance Committee hearing was centered around President Trump’s Fiscal Year 2021 budget request, which separately includes a provision calling for the elimination of an appropriations rider that prohibits the Justice Department from using its fund to interfere in the implementation of medical cannabis laws as well as a continued block on Washington, D.C. spending its own local tax dollars to legalize marijuana sales.
Photo courtesy of C-SPAN.
American Bar Association Wants Protections For Marijuana Banking And Lawyers Working With Cannabis Clients
The American Bar Association (ABA) approved two marijuana-related resolutions during its midyear meeting on Monday.
The group’s House of Delegates voted in favor of proposals endorsing pending federal legislation to protect banks that service cannabis businesses and calling for a clarification of rules to ensure that lawyers will not be penalized for representing clients in cases concerning state-legal marijuana activity.
Under the banking resolution, ABA “urges Congress to enact legislation to clarify and ensure that it shall not constitute a federal crime for banking and financial institutions to provide services to businesses and individuals, including attorneys, who receive compensation from the sale of state-legalized cannabis or who provide services to cannabis-related legitimate business acting in accordance with state, territorial, and tribal laws.”
HOD Res 103D: Adopted. Urges enactment of laws to ensure that it shall not constitute a federal crime for banks and financial institutions to provide cannabis-related services. #ABAMidyear
— American Bar Association (@ABAesq) February 17, 2020
ABA added that “such legislation should clarify that the proceeds from a transaction involving activities of a legitimate cannabis-related business or service provider shall not be considered proceeds from an unlawful activity solely because the transaction involves proceeds from a legitimate cannabis-related business or service provider, or because the transaction involves proceeds from legitimate cannabis-related activities.”
A bill that would accomplish this goal was approved by the House of Representatives last year, but it’s currently stalled in the Senate, where it awaits action in the Banking Committee. That panel’s chair, Sen. Mike Crapo (R-ID) is under pressure from industry stakeholders to advance the legislation, but he’s also heard from anti-legalization lawmakers who’ve thanked him for delaying the bill.
“Passage of the [Secure and Fair Enforcement] Banking Act or similar legislation will provide security for lawyers and firms acting to advise companies in the industry against having their accounts closed or deposits seized,” a report attached to the ABA resolution states. “This will also foster the rule of law by ensuring that those working in the state-legalized legitimate cannabis industry can seek counsel and help prevent money laundering and other crimes associated with off-the-books cash transactions.”
“Currently, the threat of criminal prosecution prevents most depository institutions from banking clients, including lawyers, who are in the stream of commerce of state-legalized marijuana. This Resolution is necessary to clarify that such provision of legal and other services in compliance with state law should not constitute unlawful activity pursuant to federal law.”
The second marijuana-related resolution ABA adopted on Monday asks Congress to allow attorneys to serve clients in cannabis cases without facing federal punishment.
Text of the measure states that the association “urges Congress to enact legislation to clarify and explicitly ensure that it does not constitute a violation of federal law for lawyers, acting in accord with state, territorial, and tribal ethical rules on lawyers’ professional conduct, to provide legal advice and services to clients regarding matters involving marijuana-related activities that are in compliance with state, territorial, and tribal law.”
HOD Res 103B: Adopted as revised. Urges enactment of laws to ensure lawyers can provide legal advice and services for clients' legal marijuana-related activities. #ABAMidyear
— American Bar Association (@ABAesq) February 17, 2020
Such a change would provide needed clarity for lawyers as more states legalize cannabis for adult use. ABA’s own rules of conduct have been a source of conflict for attorneys, as it stipulates that they “shall not counsel a client to engage, or assist a client, in conduct that the lawyer knows is criminal or fraudulent.” Federal law continues to regard marijuana as an illegal, strictly controlled substance.
An ABA report released last year made the case that there’s flexibility within that rule, however, as “it is unreasonable to prohibit a lawyer from providing advice and counsel to clients and to assist clients regarding activities permitted by relevant state or local law, including laws that allow the production, distribution, sale, and use of marijuana for medical or recreational purposes so long as the lawyer also advises the client that some such activities may violate existing federal law.”
A new report attached to the resolution states that “statutory guidance is needed that explicitly ensures that attorneys who adhere to their state ethics rules do not risk federal criminal prosecution simply for providing legal counsel to clients operating marijuana businesses in compliance with their state law.”
“This Resolution accomplishes this elegantly by harmonizing federal criminal liability with States’ ethical rules regarding the provision of advice and legal services relating to marijuana business. If a state has legalized some form of marijuana activity and explicitly permitted lawyers to provide advice and legal services relating to such state-authorized marijuana activity, such provision of advice and legal services shall not be unlawful under the Controlled Substances Act or any other federal law.”
Last year, ABA adopted another cannabis resolution—arguing that states should be allowed to set their own marijuana policies.
Border Patrol Union Head Admits Legalizing Marijuana Forces Cartels Out Of The Market
The head of the labor union that represents U.S. Border Patrol agents acknowledged on Friday that states that legalize marijuana are disrupting cartel activity.
While National Border Patrol Council President Brandon Judd was attempting to downplay the impact of legalization, he seemed to inadvertently make a case for the regulation all illicit drugs by arguing that cartels move away from smuggling cannabis and on to other substances when states legalize.
Judd made the remarks during an appearance on C-SPAN’s Washington Journal, where a caller said that “the states that have legalized marijuana have done more damage to the cartels than the [Drug Enforcement Administration] could ever think about doing.”
“As far as drugs go, all we do is we enforce the laws. We don’t determine what those laws are,” Judd, who is scheduled to meet with President Trump on Friday, replied. “If Congress determines that marijuana is going to be legal, then we’re not going to seize marijuana.”
“But what I will tell you is when he points out that certain states have legalized marijuana, all the cartels do is they just transition to another drug that creates more profit,” he said. “Even if you legalize marijuana, it doesn’t mean that drugs are going to stop. They’re just going to go and start smuggling the opioids, the fentanyl.”
One potential solution that Judd didn’t raise would be to legalize those other drugs to continue to remove the profit motive for cartels. Former presidential candidate Andrew Yang made a similar argument in December.
Federal data on Border Patrol drug seizures seems to substantiate the idea that cannabis legalization at the state level has reduced demand for the product from the illicit market. According to a 2018 report from the Cato Institute, these substantial declines are attributable to state-level cannabis reform efforts, which “has significantly undercut marijuana smuggling.”
Additionally, legalization seems to be helping to reduce federal marijuana trafficking prosecutions, with reports showing decreases of such cases year over year since states regulated markets have come online.
In his annual report last year, Supreme Court Chief Justice John Roberts also noted reduced federal marijuana prosecutions—another indication that the market for illegally sourced marijuana is drying up as more adults consumers are able to buy the product in legal stores.