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Number Of Banks Reporting Marijuana Business Clients Declines, Federal Report Shows

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The number of banks and credit unions servicing marijuana businesses dipped in the last fiscal quarter, according to new federal data.

That said, the Financial Crimes Enforcement Network (FinCEN) is no longer counting financial institutions that work with hemp-only companies since the crop was federally legalized, making the overall decline seem more pronounced compared to past quarters.

In the quarter ending in March 2020, there were 710 banks and credit unions that reported servicing marijuana businesses, according to the update that FinCEN, which is part of the Treasury Department, published this week. The previous quarter’s data showed 739 instances of financial institutions working with the industry as of December 2019.

In both of those reports, analysts identified instances where banks were filing suspicious activity reports, or SARs, for companies that only dealt with legal hemp and excluded them from the updates.

Of the 203 financial institutions that “indicated that they were providing banking services to hemp-related businesses,” 142 also worked with marijuana companies so they were kept in the report. But that means 61 hemp-only businesses were left out, unlike in past quarters. That’s the same number that were excluded from the end-of-2019 report, meaning that 29 fewer banks reported maintaining marijuana accounts at the end of March as compared to three months earlier.

Via FinCEN.

Under FinCEN guidance issued by the Obama administration in 2014 that remains in effect, banks and credit unions are required to submit SARs if they elect to provide financial services to marijuana businesses. In the years since, the number of depositories taking on marijuana clients has gradually increased—with the exception of this more recent downward trend.

When breaking down the latest data between types of financial institutions, FinCEN reports that the number of banks working with marijuana businesses is on a decline, while credit unions seem to be gradually welcoming more cannabis clients.

Via FinCEN.

“Short-term declines in the number of depository institutions actively providing banking services to marijuana-related businesses (MRBs) may be explained by filers exceeding the 90 day follow-on Suspicious Activity Report (SAR) filing requirement,” FinCEN said. “Several filers take 180 days or more to file a continuing activity report. After 90 days, a depository institution is no longer counted as providing banking services until a new guidance-related SAR is received.”

A spokesperson for the Credit Union National Association (CUNA), which has pushed for congressional legislation to protect financial institutions that service the marijuana industry, told Marijuana Moment that there are multiple factors such as delayed SARs filing that could account for the overall decline shown in the new numbers.

That said, CUNA has “heard of no specific trends that would explain it.”

Last year, FinCEN and other federal regulators issued guidance clarifying clarified that because hemp was federally legalized, banks are no longer required to automatically submit SARs for businesses that produce, process or sell the crop and products derived from it.

“The guidance states that because hemp is no longer a controlled substance under federal law, banks are not required to file SARs on these businesses solely because they are engaged in the growth or cultivation of hemp in accordance with applicable laws and regulations,” FinCEN said in this latest update. “The guidance further notes that for hemp-related customers, banks are expected to follow standard SAR procedures, and file a SAR if indicia of suspicious activity warrants.”

Some in the industry expected to see a sizable spike in the number of banks that work with marijuana firms after the House of Representatives passed a bill last year that would protect financial institutions from being penalized for doing so by federal regulators. Even though the legislation has stalled in the Senate and has not yet been enacted into law, the bipartisan margin of support it got in the House has been seen as a signal that formal federal changes are likely on the way.

Morgan Fox, media relations director for the National Cannabis Industry Association, told Marijuana Moment that the new FinCEN report is “certainly disappointing to see.”

“I suppose there could be several factors at play, the biggest of which would probably be market contraction because of the economic downturn and risk-aversion on the part of banks,” he said. “I think the latter could be attributed to both the pandemic and the fear of potentially getting wrapped up in an antitrust investigation or something similar (since word of those investigations was making the rounds a couple months ago and created some nervousness in the industry).”

“Regardless of the causes, the effect is detrimental to cannabis businesses that are already struggling and is just one more reason the Senate must approve banking reform without delay,” he said.

House Democrats passed the cannabis banking legislation a second time last month as part of a coronavirus relief bill. As with the standalone marijuana financial services legislation, the Republican-controlled Senate has not followed suit.

Bipartisan Lawmakers Push Marijuana Reform In Floor Debate On Policing Overhaul Bill

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Kyle Jaeger is Marijuana Moment's Sacramento-based senior editor. His work has also appeared in High Times, VICE and attn.

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Florida Regulators Blast Oregon Hemp Products And Encourage Consumers To Buy Local In New Alert

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Florida regulators are calling out Oregon hemp businesses over products that they say contain rocks and sticks and have failed to meet regulatory guidelines on allowable THC content. Instead, consumers should buy local products made in Florida, officials say.

The Florida Department of Agriculture and Consumer Services (FDACS) recently released a consumer alert to warn Floridians about complaints it has received concerning poor quality hemp items from Oregon. Separate new guidance was issued on the cannabinoid delta-8 THC, a psychoactive compound that is increasingly being marketed and catching the attention of regulators.

“The department routinely finds violative products and conducts investigations based on consumer complaints,” FDACS said in the Oregon hemp warning. “Recently, the department has received several consumer complaints regarding shipments of hemp from Oregon.”

Those concerns are concentrated in three areas. The complaints have noted issues with Oregon hemp shipments for plants containing “rocks, sticks and other foreign material,” fraudulent certificates for laboratory analyses and items containing more than 0.3 percent THC, which is the allowable limit under federal statute.

“The department actively inspects for sanitary operating conditions and tests for label accuracy and contaminants unsafe for human consumption,” the notice states. “The department will continue to work with the United States Department of Agriculture (USDA) and the Oregon Department of Agriculture to contact firms in Oregon, notify consumers, and request remedial actions be taken.”

Regulators advised consumers to seek out products from businesses approved by USDA and to look for items that have a “Fresh From Florida” logo for quality assurance.

“Not only are you getting a product that is subject to Florida’s comprehensive seed to sale inspections, you’re also helping support Florida farmers,” the Florida Department of Agriculture and Consumer Services (FDACS) said.

Nikki Fried, who heads FDCAS as commissioner of agriculture and consumer services, has publicly stated that she’s a medical cannabis cardholder in the state—and she’s also running for governor. Prior to winning elected office, she previously lobbied on behalf of a plant farm that was later bought out by a major cannabis company.

Fried has made cannabis policy a priority throughout her tenure, and her agency has separately released new guidance on the marketing of delta-8 THC.

“The FDACS team is on the ground daily working to make sure the rules are being followed and that hemp extract products do not contain contaminants unsafe for human consumption,” it said. “Over the past year, the department has observed a growing interest in the sale of Delta-8-tetrahydrocannibinol (“Delta-8-THC”) and received numerous inquiries regarding its safety.”

It cautioned that the “until comprehensive, nationwide standards are adopted, consumers have no way of knowing what post-processing steps were taken to ensure the safety of these products” containing delta-8.

Colorado Governor Announces New Cannabis Business Office With Focus On Social Equity

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Colorado Governor Announces New Cannabis Business Office With Focus On Social Equity

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Colorado officials on Wednesday announced the launch of a new office to provide economic support for the state’s marijuana industry.

The Cannabis Business Office (CBO) “shows our administration’s focus on growing this thriving industry that supports jobs and our economy,” Gov. Jared Polis (D) said in a press release.

The division, which was created as part of a bill signed into law in March, is being funded by cannabis tax revenue. It will focus on creating “new economic development opportunities, local job creation, and community growth for the diverse population across Colorado.”

Importantly, it will be prioritizing social equity, offering resources to people from communities most impacted by marijuana criminalization. That includes loans for equity businesses, grants to support job creation and technical assistance.

“This office will offer tools like technical help and improve access to money for businesses,” Polis said. “Where the federal government has fallen behind, Colorado will lead. Colorado is, and always has been, the best place to live, work, grow and sell cannabis.”

The governor had initially asked lawmakers back in January to create a new a new cannabis advancement program as part of his budget proposal.

CBO will fall under the Colorado Office of Economic Development and International Trade. Tristan Watkins, the new Cannabis Program manager, said it will “provide novel and ambitious programming to provide more equitable opportunity in the cannabis industry.”

“As the office expands, we are confident it will further solidify Colorado as the leader in the nation’s cannabis industry,” he said.

Beyond this program, the state has worked to achieve equity and repair the harms of prohibition in other ways.

For example, Polis signed a bill in May to double the marijuana possession limit for adults in the state—and he directed state law enforcement to identify people with prior convictions for the new limit who he may be able to pardon.


Marijuana Moment is already tracking more than 1,100 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.

The governor signed an executive order last year that granted clemency to almost 3,000 people convicted of possessing one ounce or less of marijuana.

Funding for the new office is made possible by tax revenue from a booming cannabis market in the state. In the first three months of 2021 alone, the state saw more than half a billion dollars in marijuana sales.

The lack of access to federal financial support for marijuana businesses became a pronounced issue amid the coronavirus pandemic, with the Small Business Administration saying it’s unable to offer those companies its services, as well as those that provide ancillary services such as accounting and law firms.

Polis wrote a letter to a member of the Colorado congressional delegation last year seeking a policy change to give the industry the same resources that were made available to other legal markets.

Analysis: House Vote On AOC’s Psychedelics Research Amendment Shows Rising Support Despite Defeat

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Analysis: House Vote On AOC’s Psychedelics Research Amendment Shows Rising Support Despite Defeat

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The U.S. House of Representatives on Tuesday again defeated a spending bill amendment meant to promote research into the medical benefits of psychedelics like psilocybin and MDMA. But it picked up about 50 “yes” votes since it was last considered in 2019, signaling that Congress may be coming around on the issue as psychedelics reform advances at the state and local levels—similar to how support for marijuana law reform has increased over time.

Rep. Alexandria Ocasio-Cortez (D-NY) sponsored the amendment, with the hopes of attaching it to a wide-ranging appropriations bill. But it failed in a 140-285 vote. That’s a notably smaller margin compared to two years ago, when the proposal was rejected by a vote of 91-331.

Most Democrats supported the amendment this round, unlike in 2019 when a majority of Ocasio-Cortez’s party joined Republicans in quashing the reform.

The proposal, if adopted, would have removed a 1990s-era provision that’s long been part of spending legislation for the Department of Health and Human Services (HHS). The rider bars use of funds for “any activity that promotes the legalization of any drug or other substance in Schedule I” of the Controlled Substances Act, language that reform supporters say can have a chilling effect on even researching the therapeutic potential of restricted drugs.

Despite the growth in Democratic support over the past two years, enough members of the party helped take the measure down during Tuesday’s vote. Ocasio-Cortez said in a tweet that “we got a little closer to ending this outdated war-on-drugs-era policy last night” and pledged that she will “keep bringing it up until the times catch up.”

(The vote tallies cited in the following tweet are incorrect).

A handful of Republicans did vote to pass the amendment, showing that the issue isn’t totally partisan. However, it was just seven GOP members who supported the effort, which is the same number as 2019. Rep. Matt Gaetz (R-FL) gave Ocasio-Cortez credit for “vastly increasing dem support here.”

Here’s a look at which lawmakers flipped their votes from “no” to “yes” on the psychedelics research amendment from 2019 to 2021:

  • Rep. Lisa Blunt Rochester (D-DE)
  • Rep. Brendan Boyle (D-PA)
  • Rep. Anthony Brown (D-MD)
  • Rep. Tim Burchett (R-TN)
  • Rep. Matt Cartwright (D-PA)
  • Rep. Judy Chu (D-CA)
  • Rep. Katherine Clark (D-MA)
  • Rep. Gerald Connolly (D-VA)
  • Rep. Jim Cooper (D-TN)
  • Rep. Joe Courtney (D-CT)
  • Rep. Jason Crow (D-CO)
  • Rep. Sharice Davids (D-KS)
  • Rep. Madeleine Dean (D-PA)
  • Rep. Ted Deutch (D-FL)
  • Rep. Debbie Dingell (D-MI)
  • Rep. Lloyd Doggett (D-TX)
  • Rep. Veronica Escobar (D-TX)
  • Rep. Dwight Evans (D-PA)
  • Rep. Bill Foster (D-IL)
  • Rep. Sylvia Garcia (D-TX)
  • Rep. Al Green (D-TX)
  • Rep. Hakeem Jeffries (D-NY)
  • Rep. Robin Kelly (D-IL)
  • Rep. Daniel Kildee (D-MI)
  • Rep. John Larson (D-CT)
  • Rep. Al Lawson Jr. (D-FL)
  • Rep. Sean Maloney (D-NY)
  • Rep. Donald McEachin (D-VA)
  • Rep. Gregory Meeks (D-NY)
  • Rep. Donald Norcross (D-NJ)
  • Rep. Mike Quigley (D-IL)
  • Rep. Lucille Roybal-Allard (D-CA)
  • Rep. Mary Scanlon (D-PA)
  • Rep. Adam Schiff (D-CA)
  • Rep. Bobby Scott (D-VA)
  • Rep. Albio Sires (D-NJ)
  • Rep. Jackie Speier (D-CA)
  • Rep. Thomas Suozzi (D-NY)
  • Rep. Paul Tonko (D-NY)
  • Rep. Norma Torres (D-CA)
  • Rep. Lori Trahan (D-MA)
  • Rep. Maxine Waters (D-CA)
  • Rep. Bonnie Watson Coleman (D-NJ)
  • Rep. Peter Welch (D-VT)
  • Rep. Frederica Wilson (D-FL)

Burchett was the lone Republican flip from opposition to support. And while each member may have their own reason for moving to back the amendment, it stands to reason that the psychedelics reform movement that’s played out locally and in states over the past two years contributed to the sizable increase in support.

Larson, for example, told The News Station that his state legislature’s passage of a bill requiring Connecticut to carry out a study into the therapeutic potential of psilocybin mushrooms, which the governor signed last month, influenced his vote.

“I think that was part of it,” he said, adding that Ocasio-Cortez also proved convincing in their conversations.

There were also a number of flips for other members representing states where psychedelics reform has been pursued of late.

Six lawmakers from the California delegation switched to “yes” this vote, as the state legislature has been actively considering a proposal to legalize possession of certain psychedelics and advocates continue to push for psilocybin legalization via a ballot measure.

There were also a handful of Texas flips. The state legislature recently enacted a bill to require the state to study the therapeutic potential of psychedelics.

Welch of Vermont decided to support the amendment this round after lawmakers in his state have pursued psychedelics decriminalization.

A Florida lawmaker introduced a bill this year to establish a legal psilocybin model for therapeutic use in the state, similar to an initiative that Oregon voters approved in November. Wilson, representing the state, changed her vote, too.

Last month, a New York lawmaker introduced a bill that would require the state to establish an institute to research the therapeutic potential of psychedelics. And four members of that state’s congressional delegation flipped to support the Ocasio-Cortez amendment from last time.

In contrast, there were just three members who flipped from “yes” to “no” since the 2019 vote:

  • Rep. Sanford Bishop Jr. (D-GA)
  • Rep. Emanuel Cleaver (D-MO)
  • Rep. Glenn Grothman (R-WI)

There were some other newsworthy votes among congressional leadership. For example, House Majority Leader Steny Hoyer (D-MD), Appropriations Committee Chairwoman Rosa DeLauro (D-CT) and former Democratic National Committee Chairwoman Rep. Debbie Wasserman Schultz (D-FL) all voted against the measure.

On the flip side, House Majority Whip James Clyburn (D-SC), Democratic Caucus Chairman Hakeem Jeffries (D-NY) and Judiciary Committee Chairman Jerrold Nadler (D-NY)—who is sponsoring legislation to legalize marijuana federally—voted in favor of the proposal.

Separately on Tuesday, the House defeated a separate proposal from Rep. Debbie Lesko (R-AZ) to the HHS appropriations bill to eliminate a rider that’s currently in the legislation that “allows federal funding to go to institutions of higher education that are conducting research on marijuana.”

The amendment was rejected, with 147 votes in favor and 276 against. Every Democratic who voted opposed the proposal, and 60 Republicans joined their Democratic colleagues in defeating it.

Meanwhile, Congress will again vote on a proposal to protect all state and tribal marijuana programs from federal interference, a key committee decided on Wednesday.

The House Rules Committee made in order a bipartisan amendment to spending legislation that would provide the protections, which expand upon an existing rider that currently prevents the Justice Department from interfering in the implementation of medical cannabis laws alone. That more limited protection has been annually renewed as part of federal law since 2014.

The panel also advanced a competing amendment from Rep. Doug LaMalfa (R-CA) that would eliminate the current medical marijuana provision—despite the fact that it shields the decades-old program of the sponsor’s own state.

Congress Will Vote On Protecting All State Marijuana Programs From Federal Interference Under New Amendment

Photo courtesy of Dick Culbert.

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