The number of banks and credit unions that service the marijuana industry grew again in the third quarter of 2019, according to a federal report.
As of June 30, there were 553 banks and 162 credit unions that submitted documents indicating that they are providing financial services to state-legal cannabis businesses. That’s up from 493 and 140, respectively, in the previous quarter ending March 30.
While marijuana remains a federally controlled substance and accepting cannabis businesses as clients is largely viewed as risky within the financial sector, the increase reflects a growing willingness to take that chance as lawmakers work to resolve the marijuana banking issue.
Just before the end of the second quarter in March, the House Financial Services Committee approved the Secure and Fair Enforcement (SAFE) Banking Act, a bipartisan bill that would protect banks that service cannabis firms from being penalized by federal regulators. It’s possible that the development—along with expectations that the legislation would advance further—emboldened banks and credit unions to accommodate the industry.
The full House did vote in favor of the banking bill last month, sending it to the Senate. Rep. Ed Perlmutter (D-CO), sponsor of the legislation, has emphasized the need to provide these financial services to the industry in order to increase transparency and mitigate the risks associated with operating on a largely cash-only basis.
But Perlmutter is also focused on ensuring that hemp and CBD businesses have access to financial services. While the crop and its derivatives were federally legalized under the 2018 Farm Bill, there’s still some confusion that’s led banks to deny their services to the industry.
In an extension of remarks the congressman made on the House floor last month, he urged the Treasury Department to provide guidance for hemp and CBD businesses that are involved in lawful activities.
“While the SAFE Banking Act focuses on harmonizing federal and state banking laws regarding serving legitimate cannabis businesses and their service providers, there are still several issues where the federal government could provide more clarity,” Perlmutter said. “The Department of Treasury and its regulatory agencies should issue guidance on behalf of all federally licensed businesses engaging in, or considering engaging in, the legal cannabis trade, or hemp and CBD trade, with respect to their engagement in a legal business.”
The Financial Crimes Enforcement Network, or FinCEN, released this latest update on cannabis banking in August. The numbers are based on an analysis of suspicious activity reports, or SARS, that financial institutions are required to file in accordance with 2014 cannabis banking guidance issued under the Obama administration.
“As of 30 June 2019, FinCEN has received a total of 87,249 SARs using the key phrases associated with [marijuana related businesses],” FinCEN wrote.
The agency also broke down the types of SARs that banks and credit unions reported for cannabis businesses.
The overwhelming majority (68,378) were described as “marijuana limited,” which refers to marijuana firms that seem to be operating in compliance with state law, thus meeting the agency’s standard for being serviceable under existing federal guidelines.
About 6,900 fit the definition of “marijuana priority,” a term that means the business “may raise one or more of the red flags” under federal guidelines or they “may not be fully compliant with the appropriate state’s regulations” and so they’d be under investigation.
There were approximately 22,000 SARS marked as “marijuana termination,” defined as a cannabis business that has violated at least one federal enforcement priority or state regulation and so “the financial institution has decided to terminate its relationship with” the business.
Congressman Visits Marijuana Dispensary On Behalf Of Bernie Sanders’s Presidential Campaign
A congressman and staffers for Sen. Bernie Sanders’s (I-VT) presidential campaign toured a marijuana dispensary in Las Vegas on Monday and discussed the need for federal cannabis reform.
Rep. Mark Pocan (D-WI), who endorsed Sanders’s bid for the White House last week, shared photos on Twitter from the visit to NuWu Cannabis, a tribal-owned shop that features a consumption lounge and a drive-thru where consumers can buy marijuana products.
After years of an unjust War on Drugs, it’s time we work to ensure all communities can benefit from legalization—@BernieSanders marijuana legalization plan will do just that. pic.twitter.com/XFWmIZKuus
— Mark Pocan (@MarkPocan) January 21, 2020
“After years of an unjust War on Drugs, it’s time we work to ensure all communities can benefit from legalization—[Sanders’s] marijuana legalization plan will do just that,” the congressman tweeted.
While the 2020 Democratic presidential candidate wasn’t scheduled to attend the shop and has since had to drop campaign stops in order to participate in the Senate’s impeachment trial of President Donald Trump, Pocan and Nevada campaign staff were there on his behalf, Tick Segerblom, a Clark County commissioner and former state senator who helped coordinate the event, told Marijuana Moment.
“We showed him around, explained on how it works, explained how it’s organized under state law,” Segerblom said of Pocan. “He said he’d never seen anything like it.”
The congressman also talked with business owners about the importance of social equity within the marijuana industry. He didn’t purchase or sample any cannabis products, however.
Segerblom said that while Sanders wasn’t able to attend this tour, he believes it’s important for the candidate to participate in such events and talk about his reform agenda to distinguish himself in the race.
“There’s a lot of people who will vote on this issue, and since [former Vice President Joe Biden] has come out against legalizing cannabis, I think it’s a very important issue for him to emphasize,” he said.
It’s fitting that Pocan would tour a tribal-owned cannabis business, as he was the chief sponsor of a 2016 bill that would have protected tribes from losing federal funds if they enact a legal marijuana program. Although the congressman represents Wisconsin, which doesn’t even have a comprehensive medical cannabis program let alone full adult-use legalization, he has cosponsored several cannabis reform bills this Congress, including two that would end federal prohibition.
State-legal dispensaries are getting a lot of high-profile attention from politicians lately. For example, former South Bend, Indiana Mayor Pete Buttigieg visited a Las Vegas marijuana shop last year, Rep. Julia Brownley (D-CA) paid a visit to a California dispensary and Sen. Ron Wyden (D-OR) toured a business that makes CBD-infused chocolates.
Photo courtesy of Rep. Mark Pocan.
New Vermont Bill Would Decriminalize Psychedelics And Kratom
Vermont lawmakers filed a bill on Wednesday that would decriminalize three psychedelic substances as well as kratom.
Rep. Brian Cina (P/D) introduced the legislation, which would amend state law to carve out exemptions to the list of controlled substances. Psilocybin, ayahuasca, peyote and kratom would no longer be regulated under the proposal.
Cina told Marijuana Moment in a phone interview that he decided to pursue the policy change based on a “belief that I share with many people around the world that plants are a gift from nature and they’re a part of the web of life that humans are connected to.”
“Plants, especially plant medicines, should be accessible to people,” he said. “Use of plant medicine should be considered a health care issue, not a criminal issue.”
Whether plant medicines are used for treating pain or whether they’re used for seeking pleasure, that is a health care choice, and it’s a waste of society’s resources to criminalize healing practices that go back to the very roots of our humanity. https://t.co/hRDWWqa7yb
— Brian Cina (@briancinavt) January 22, 2020
While it remains to be seen whether the legislature will have the appetite to pursue the policy change, the bill’s introduction represents another sign that the psychedelics reform movement has momentum. Activists in about 100 cities across the U.S. are working to decriminalize a wide range of entheogenic substances, but the Vermont proposal is unique in that it’s being handled legislatively at the state level.
Text of the bill states that the four substances are “commonly used for medicinal, spiritual, religious, or entheogenic purposes.”
Larry Norris, cofounder of the national psychedelics reform group Decriminalize Nature, told Marijuana Moment that he’s especially encouraged by the use of the word “entheogenic,” a term that advocates are hoping to bring into the mainstream to more accurately describe the type of substances they want to decriminalize.
“It is exciting to see emerging interest at the state legislative level to support decriminalizing natural plants and fungi that are ‘commonly used for medicinal, spiritual, religious, or entheogenic purposes,'” he said. “The fact that the word entheogenic is making its way into the legislative lexicon speaks volumes for the shift in perspective that is happening nationwide.”
“While we were not involved in the drafting of this legislation, we look forward to offering any support and guidance to Representative Brian Cina in Vermont or any future state legislators aiming to decriminalize entheogenic plants and fungi,” Norris said.
Denver became the first city in the nation to decriminalize psilocybin mushrooms last year, followed by a unanimous City Council vote in Oakland to make a wide range of psychedelics among the city’s lowest law enforcement priorities. And while lawmakers have been comparatively slow to raise the issue in legislatures, activists in Oregon are working to put a therapeutic psilocybin initiative on the state’s 2020 ballot and, separately, a measure to decriminalize possession of all drugs with a focus on funding substance misuse treatment. In California, meanwhile, advocates are aiming to put psilocybin legalization before voters in November.
Part of the motivation behind the legislation was “recognizing that the decriminalization of mushrooms seems to be a next step in other places, and thinking that it might have greater success if we can make the point that in the path of decriminalization, the next step after cannabis is psilocybin mushrooms,” Cina said. “It was important for me to make a point about the significance of plants.”
“What it goes back to for me ultimately is that any kind of use of substances should be treated as a health care matter, not a criminal issue,” he said. “Whether those substances are used for treating pain or whether they’re used for seeking pleasure, that is a health care choice, and it’s a waste of society’s resources to criminalize a behavior that goes back to the very roots of our humanity.”
The bill currently has three cosponsors and has been referred to the Judiciary Committee. One of the cosponsors, Rep. Zachariah Ralph (P/D) told Marijuana Moment that he supports “the legalization of psychedelics because prohibition, generally, does not to work, and has continued to be enforced disproportionally against low income and minority communities.”
“Research at Johns Hopkins University and other facilities around the country on the medicinal use of psilocybin mushrooms are showing some promising results as a long term treatment of depression, addiction and anxiety,” he said. “This is especially important today as we deal with increased rates of suicides and drug overdoses across the nation and especially in Vermont.”
The bill’s introduction also comes as Vermont lawmakers express optimism about the prospects of expanding the state’s cannabis law to allow commercial sales.
While Gov. Phil Scott (R) has previously voiced opposition to allowing retail marijuana products to be sold, citing concerns about impaired driving, he recently indicated that he may be open to taxing and regulating the market. And according to top lawmakers in the state, the legislature is positioned to advance a cannabis commerce bill this session, with most members in favor of the reform move.
Vermont made history in 2018 by becoming the first state to pass marijuana legalization through the legislature, albeit with a noncommercial grow-and-give model. Now the question is whether lawmakers there will again make history by taking up psychedelics reform and decriminalizing these substances at the state level for the first time.
“We’ve decriminalized and then legalized and now might be regulating and taxing marijuana, which is a plant medicine,” Cina said. “But there are these other plant medicines that have been left behind.”
A Republican lawmaker in Iowa filed a bill to legalize certain psychedelics for medical purposes last year, but it did not advance.
Photo courtesy of Wikimedia/Mushroom Observer.
Mexican Lawmakers Plan To Pass Amended Marijuana Legalization Bill Before End Of April
An amended bill to legalize and regulate marijuana sales in Mexico is being circulated among lawmakers, setting the stage for a renewed reform push as the legislature goes back into session next month.
The new proposal, which was jointly submitted by the Justice and Health Committees, would allow adults to possess up to 28 grams of cannabis for personal use and cultivate up to six plants. Individuals could apply for a license to possess more than 28 grams but no more than 200 grams.
While Sen. Ricardo Monreal Ávila of the ruling MORENA party said the measure is not final, it’s a next step in the process. He said he’ll be meeting with Interior Secretary Olga Sánchez Cordero and Julio Scherer, legal advisor to the president, next week to discuss cannabis reform legislation.
Under the proposed bill, those who possess an amount of marijuana between 28 and 200 grams would be charged a fine amounting to roughly $560, while stricter penalties would be imposed for possession of more than 200 grams.
The Mexican Cannabis Institute, a new regulatory body, would be responsible for issuing business licenses and developing rules for the market. The bill also contains provisions aimed at promoting social equity, such as prioritizing cultivation licenses for individuals from communities most impacted by the drug war.
The institute would also be able to issue grants for research into the cultivation of cannabis for commercial use, according to Milenio.
The introduction of this revised legislation comes more than a year after the nation’s Supreme Court deemed federal laws prohibiting personal marijuana possession and cultivation unconstitutional—a ruling that was followed by a legislative mandate to end the policy. In the months since, lawmakers have worked to develop a regulatory scheme to legalize the plant for adult use.
But while there was progress—with the Senate holding numerous public educational meetings, including one that featured a former White House drug czar—the legislature was unable to reach a compromise on a passable bill before the court’s October 2019 deadline, prompting leading lawmakers to request an extension.
The Supreme Court agreed to extend the deadline for a policy change to April 30.
The new bill going before the Congress is largely similar to the one that Senate committees unveiled just before the earlier deadline, but there have been some minor changes. For example, it amends the business licensing scheme. There will be five types of licenses that the institute can issue: cultivation, transformation, marketing, exports/imports and research.
Monreal stressed that “there is nothing ensured yet” in terms of the prospects for the new draft legislation being passed as written.
— Senadores Morena (@MorenaSenadores) January 21, 2020
“There are those who are not in favor even of the legislation in this matter, so all that we have to pick it up and translate it into the will expressed on the opinion,” he said, adding that the legislature still hopes to pass legalization before the April deadline.
Read the full draft Mexican marijuana legalization bill below: