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Rand Paul Pushes Hemp Banking Amendment

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Federal authorities would no longer be able to punish banks that work with businesses that grow, process and sell hemp products under an amendment up for consideration in the U.S. Senate this week.

The measure, submitted on Tuesday by Sen. Rand Paul (R-KY), seeks to include the protections for hemp banking in the large-scale Farm Bill, which is currently on the Senate floor. The legislation, as currently drafted, already includes provisions that would legalize the cultivation of the non-psychoactive marijuana cousin.

Paul’s fellow home-state senator, Majority Leader Mitch McConnell, has been the leading force for hemp legalization in Congress this year.

“American consumers are buying hemp but thanks to heavy-handed regulation, the only option at scale is importing hemp from foreign producers,” he said in a Senate floor speech on Wednesday. “Enough is enough.”

Watch Mitch McConnell Push Hemp Legalization On The Senate Floor

It is unclear if Paul’s amendment will receive a floor vote.

See the full text of the new hemp banking amendment below:

                    ______
                                 
  SA 3198. Mr. PAUL submitted an amendment intended to be proposed by 
him to the bill H.R. 2, to provide for the reform and continuation of 
agricultural and other programs of the Department of Agriculture 
through fiscal year 2023, and for other purposes; which was ordered to 
lie on the table; as follows:

       At the end of subtitle F of title XI, add the following:

     SEC. 11618. SECURE AND FAIR BANKING ENFORCEMENT.

       (a) Safe Harbor for Depository Institutions.--A Federal 
     banking regulator may not--
       (1) terminate or limit the deposit insurance or share 
     insurance of a depository institution under the Federal 
     Deposit Insurance Act (12 U.S.C. 1811 et seq.) or the Federal 
     Credit Union Act (12 U.S.C. 1751 et seq.) solely because the 
     depository institution provides or has provided financial 
     services to a hemp-related legitimate business;
       (2) prohibit, penalize, or otherwise discourage a 
     depository institution from providing financial services to a 
     hemp-related legitimate business or to a State or Indian 
     tribe that exercises jurisdiction over hemp-related 
     legitimate businesses;
       (3) recommend, incentivize, or encourage a depository 
     institution not to offer financial services to the owner, 
     operator, or an individual that is an account holder of a 
     hemp-related legitimate business, or downgrade or cancel 
     financial services offered to an account holder of a hemp-
     related legitimate business solely because--
       (A) the account holder later becomes a hemp-related 
     legitimate business; or
       (B) the depository institution was not aware that the 
     account holder is the owner or operator of a hemp-related 
     legitimate business; and
       (4) take any adverse or corrective supervisory action on a 
     loan to an owner or operator of--
       (A) a hemp-related legitimate business solely because the 
     business owner or operator is a hemp-related business without 
     express statutory authority, as in effect on the day before 
     the date of enactment of this Act; or
       (B) real estate or equipment that is leased or sold to a 
     hemp-related legitimate business solely because the owner or 
     operator of the real estate or equipment leased or sold the 
     equipment or real estate to a hemp-related legitimate 
     business.
       (b) Protections Under Federal Law.--
       (1) In general.--In a State, political subdivision of a 
     State, or Indian country that allows the cultivation, 
     production, manufacturing, transportation, display, 
     dispensing, distribution, sale, or purchase of hemp pursuant 
     to a law (including regulations) of the State, political 
     subdivision of the State, or the Indian tribe that has 
     jurisdiction over the Indian country, as applicable, a 
     depository institution and the officers, director, and 
     employees of the depository institution that provides 
     financial services to a hemp-related legitimate business may 
     not be held liable pursuant to any Federal law (including 
     regulations)--
       (A) solely for providing the financial services pursuant to 
     the law (including regulations) of the State, political 
     subdivision of the State, or Indian tribe; or
       (B) for further investing any income derived from the 
     financial services.
       (2) Forfeiture.--A depository institution that has a legal 
     interest in the collateral for a loan made to an owner or 
     operator of a hemp-related legitimate business, or to an 
     owner or operator of real estate or equipment that is leased 
     or sold to a hemp-related legitimate business, shall not be 
     subject to criminal, civil, or administrative forfeiture of 
     that legal interest pursuant to any Federal law for providing 
     the loan or other financial services solely because the 
     collateral is owned by a hemp-related business.
       (c) Rule of Construction.--Nothing in this section shall 
     require a depository institution to provide financial 
     services to a hemp-related legitimate business.
       (d) Requirements for Filing Suspicious Activity Reports.--
     Section 5318(g) of title 31, United States Code, is amended 
     by adding at the end the following:
       ``(5) Requirements for hemp-related businesses.--
       ``(A) Definitions.--In this paragraph--
       ``(i) the term `financial service' means a financial 
     product or service, as defined in section 1002 of the Dodd-
     Frank Wall Street Reform and Consumer Protection Act (12 
     U.S.C. 5481);
       ``(ii) the term `hemp' has the meaning given the term in 
     section 10111 of the Agriculture and Nutrition Act of 2018;
       ``(iii) the term `hemp-related legitimate business' has the 
     meaning given the term in section 11618(e) of the Agriculture 
     and Nutrition Act of 2018;
       ``(iv) the term `Indian country' has the meaning given the 
     term in section 1151 of title 18; and
       ``(v) the term `Indian tribe' has the meaning given the 
     term in section 102 of the Federally Recognized Indian Tribe 
     List Act of 1994 (25 U.S.C. 479a).
       ``(B) Reporting of suspicious transactions.--A financial 
     institution or any director, officer, employee, or agent of a 
     financial institution that reports a suspicious activity 
     related to a transaction by a hemp-related legitimate 
     business shall comply with appropriate guidance issued by the 
     Financial Crimes Enforcement Network. The Secretary shall 
     ensure that the guidance is consistent with the purpose and 
     intent of this paragraph and does not inhibit the provision 
     of financial services to a hemp-related legitimate business 
     in a State, political subdivision of a State, or Indian 
     country that has allowed the cultivation, production, 
     manufacturing, transportation, display, dispensing, 
     distribution, sale, or purchase of hemp, or any other conduct 
     relating to hemp, pursuant to law or regulation of the State, 
     the political subdivision of the State, or Indian tribe that 
     has jurisdiction over the Indian country.''.
       (e) Definitions.--In this section:
       (1) Company.--The term ``company'' means a partnership, 
     corporation, association, (incorporated or unincorporated), 
     trust, estate, cooperative organization, State, or any other 
     entity.
       (2) Depository institution.--The term ``depository 
     institution'' means--
       (A) a depository institution as defined in section 3(c) of 
     the Federal Deposit Insurance Act (12 U.S.C. 1813(c));
       (B) a Federal credit union as defined in section 101 of the 
     Federal Credit Union Act (12 U.S.C. 1752); or
       (C) a State credit union as defined in section 101 of the 
     Federal Credit Union Act (12 U.S.C. 1752).
       (3) Federal banking regulator.--The term ``Federal banking 
     regulator'' means each of the Board of Governors of the 
     Federal Reserve System, the Bureau of Consumer Financial 
     Protection, the Federal Deposit Insurance Corporation, the 
     Office of the Comptroller of the Currency, the National 
     Credit Union Administration, or any Federal agency or 
     department that regulates banking or financial services, as 
     determined by the Secretary of the Treasury.
       (4) Financial service.--The term ``financial service'' 
     means a financial product or service, as defined in section 
     1002 of the Dodd-Frank Wall Street Reform and Consumer 
     Protection Act (12 U.S.C. 5481).
       (5) Hemp.--The term ``hemp'' has the meaning given the term 
     in section 10111.
       (6) Hemp product.--The term ``hemp product'' means any 
     article which contains hemp, including an article which is a 
     concentrate, an edible, a tincture, a hemp-infused product, 
     or a topical.
       (7) Hemp-related legitimate business.--The term ``hemp-
     related legitimate business'' means a manufacturer, producer, 
     or any person or company that--
       (A) engages in any activity described in subparagraph (B) 
     pursuant to a law established by a State or a political 
     subdivision of a State; and
       (B)(i) participates in any business or organized activity 
     that involves handling hemp or hemp products, including 
     cultivating, producing, manufacturing, selling, transporting, 
     displaying, dispensing, distributing, or purchasing hemp or 
     hemp products; or
       (ii) provides--
       (I) any financial service, including retirement plans or 
     exchange traded funds, relating to hemp; or
       (II) any business services, including the sale or lease of 
     real or any other property, legal or other licensed services, 
     or any other ancillary service, relating to hemp.
       (8) Indian country.--The term ``Indian country'' has the 
     meaning given the term in section 1151 of title 18, United 
     States Code.
       (9) Indian tribe.--The term ``Indian tribe'' has the 
     meaning given the term in section 102 of the Federally 
     Recognized Indian Tribe List Act of 1994 (25 U.S.C. 479a).
       (10) Manufacturer.--The term ``manufacturer'' means a 
     person or company who manufactures, compounds, converts, 
     processes, prepares, or packages hemp or hemp products.
       (11) Producer.--The term ``producer'' means a person or 
     company who plants, cultivates, harvests, or in any way 
     facilitates the natural growth of hemp.
       (12) State.--The term ``State'' means each of the several 
     States, the District of Columbia, Puerto Rico, any territory 
     or possession of the United States.
                                 ______
Marijuana Moment is made possible with support from readers. If you rely on our cannabis advocacy journalism to stay informed, please consider a monthly Patreon pledge.

Tom Angell is the editor of Marijuana Moment. A 20-year veteran in the cannabis law reform movement, he covers the policy and politics of marijuana. Separately, he founded the nonprofit Marijuana Majority. Previously he reported for Marijuana.com and MassRoots, and handled media relations and campaigns for Law Enforcement Against Prohibition and Students for Sensible Drug Policy. (Organization citations are for identification only and do not constitute an endorsement or partnership.)

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Legal Marijuana States Have Generated Nearly $8 Billion In Tax Revenue Since Recreational Sales Launched, Report Finds

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States that have legalized marijuana for adult use have collectively generated nearly $8 billion in tax revenue from cannabis since legal sales first began in 2014, according to a new report from the Marijuana Policy Project (MPP).

The analysis examined the tax structure and revenue streams of all 18 states that have legalized recreational cannabis, though sales have not launched yet in seven of those states. Overall, it shows that establishing regulated marijuana markets gives states a steady and generally growing source of revenue that can support various programs and services.

Last year alone, the adult-use states collected $2.7 billion in taxes from cannabis sales. And as more markets come online and others mature, that’s expected to continue to grow.

For example, California took in more than $1 billion in tax revenue from recreational marijuana in 2020—a 62 percent increase from 2019.

Illinois has consistently been breaking monthly cannabis sales records since its program started in January 2020, and if the trend keeps up, it could create upwards of $1 billion in tax revenue this year. For the first time, marijuana taxes outpaced those derived from alcohol in the state last quarter.

The report does not factor in local tax revenue that individual municipalities may impose on cannabis sales, like in Denver where residents pay an additional 5.5 percent tax that has generated hundreds of thousands of dollars for the city.

“Legalizing cannabis for adults has proven to be a wise investment,” Jared Moffat, state campaigns manager at MPP, said in a press release. “Not only are states seeing the benefits of a regulated market and far fewer cannabis-related arrests—they’re benefitting in a direct, economic way, too.”

MPP also broke down different ways that adult-use states are using those tax dollars.

In Colorado, $404.5 million in marijuana tax revenue has supported the state’s public school system. Oregon invests 40 percent of its cannabis revenue to public education, as well as 25 percent to fund mental health and treatment programs. And in California, $100 million in cannabis tax dollars have gone to community groups to help people most impacted by punitive drug laws.

“Before legalization, money from cannabis sales flowed through an underground market that endangered public safety and disrupted communities. But now, we see all across the country that revenue from the legal cannabis industry is supporting schools, health care, and a range of other beneficial public programs,” Moffat said. “It’s no wonder that residents in legalization states overwhelmingly see legalization as a success.”

Reform advocates aren’t the only ones interested in seeing how states are approaching the tax side of marijuana legalization. The U.S. Census Bureau also has plans to begin collecting and compiling data on revenue that states generate from legal cannabis.

Delaware’s Democratic Governor Reaffirms Opposition To Legalizing Marijuana, Which He Says Can Be A ‘Gateway’ Drug

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Illinois Will ‘Blow Past’ $1 Billion In Legal Marijuana Sales In 2021, Chamber Of Commerce President Says

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“Are we going to get to a billion dollars? I think we’re going to blow past the billion dollars based on the experience in smaller states,” the Chamber leader said.

By Elyse Kelly, The Center Square

Illinois’s cannabis industry is growing up fast, with adult-use recreational cannabis sales expected to hit $1 billion by year-end.

In March alone, Illinoisans spent $110 million on recreational marijuana.

Todd Maisch, president and CEO of the Illinois Chamber of Commerce, said one factor contributing to Illinois’ explosive growth is that most neighboring states haven’t legalized marijuana yet.

“What we saw early on in states like Washington and Colorado is they did have demand come in from surrounding states, which frankly benefits our industry and benefits the taxes collected,” Maisch said.

Cannabis sales have already surpassed alcohol’s tax revenues for the state, and Maisch said he thinks $1 billion estimates are conservative.

“Are we going to get to a billion dollars? I think we’re going to blow past the billion dollars based on the experience in smaller states,” Maisch said.

There are only a couple of things that could stop Illinois’ explosive cannabis market growth, Maisch said. He said that policymakers could ruin things by pushing taxes too high as evidenced by the tobacco market.

“As taxes have gone up and up and up, they’ve pushed people all the way into the black market or they’ve created this grey market in which people are ostensibly paying some of the taxes, but they’re still getting sources of tobacco products that avoid much of the tax,” Maisch said.

The other thing that could head off continued growth is other states opening up recreational-use markets.

“So if you start to see surrounding states go to recreational, that’s definitely going to flatten the curve because we’re not going to be pulling in demand from other states,” Maisch said.

Maisch points out some concerns that accompany the explosion of Illinois’s recreational cannabis market including workforce preparedness.

“All of those individuals who are deciding to go ahead and consume this product are really taking themselves out of a lot of job opportunities that they would otherwise be qualified, so there’s a real upside and a downside,” Maisch said.

While it’s easy to track the revenues this industry brings into state coffers, he points out, it will be harder to track the lack of productivity and qualified individuals to operate heavy machinery and other jobs that require employees to pass a drug test.

This story was first published by The Center Square.

DEA Finally Ready To End Federal Marijuana Research Monopoly, Agency Notifies Grower Applicants

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Missouri Regulators Derail Medical Marijuana Business Ownership Disclosure Effort With Veto Threat

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Missouri regulators say they feel requiring medical marijuana business license ownership disclosures under a House-approved amendment could be unconstitutional, and they may urge the governor to veto the legislation. 

By Jason Hancock, Missouri Independent

An effort by lawmakers to require disclosure of ownership information for businesses granted medical marijuana licenses was derailed on Thursday, when state regulators suggested a possible gubernatorial veto.

On Tuesday, the Missouri House voted to require the Department of Health and Senior Services provide legislative oversight committees with records regarding who owns the businesses licensed to grow, transport and sell medical marijuana.

The provision was added as an amendment to another bill pertaining to nonprofit organizations.

Its sponsor, Rep. Peter Merideth, D-St. Louis, said DHSS’s decision to deem ownership records confidential has caused problems in providing oversight of the program. He pointed to recent analysis by The Independent and The Missourian of the 192 dispensary licenses issued by the state that found several instances where a single entity was connected to more than five dispensary licenses.

The state constitution prohibits the state from issuing more than five dispensary licenses to any entity under substantially common control, ownership or management.

On Thursday, a conference committee met to work out differences in the underlying bill between the House and Senate.

Sen. Eric Burlison, a Republican from Battlefield and the bill’s sponsor, called the medical marijuana amendment an “awesome idea. I think it’s awesome.”

However, he said opposition from the department puts the entire bill in jeopardy.

“The department came to me,” he said, “and said they felt that this was unconstitutional.”

DHSS has justified withholding information from public disclosure by pointing to a portion of the medical marijuana constitutional amendment adopted by voters in 2018 that says the department shall “maintain the confidentiality of reports or other information obtained from an applicant or licensee containing any individualized data, information, or records related to the licensee or its operation… .”

Alex Tuttle, a lobbyist for DHSS, said if the bill were to pass with the medical marijuana amendment still attached, the department may recommend Gov. Mike Parson veto it.

The threat of a veto proved persuasive, as several members of the conference committee expressed apprehension about the idea of the amendment sinking the entire bill.

Merideth said the department’s conclusion is incorrect. And besides, he said, the amendment is narrowly tailored so that the information wouldn’t be made public. It would only be turned over to legislative oversight committees.

Rep. Jered Taylor, R-Republic, chairman of the special committee on government oversight, said the amendment is essential to ensure state regulators “are following the constitution, that they’re doing what they’re supposed to be doing.”

The medical marijuana program has faced intense scrutiny in the two years since it was created by voters.

A House committee spent months looking into widespread reports of irregularities in how license applications were scored and allegations of conflicts of interest within DHSS and a private company hired to score applications.

In November 2019, DHSS received a grand jury subpoena, which was issued by the United States District Court for the Western District. It demanded the agency turn over all records pertaining to four medical marijuana license applications.

The copy of the subpoena that was made public redacted the identity of the four applicants at the request of the FBI. Lyndall Fraker, director of medical marijuana regulation, later said during a deposition that the subpoena wasn’t directed at the department but rather was connected to an FBI investigation center in Independence.

More recently, Parson faced criticism for a fundraiser with medical marijuana business owners for his political action committee, Uniting Missouri.

The group reported raising $45,000 in large donations from the fundraiser. More than half of that money came from a PAC connected to Steve Tilley, a lobbyist with numerous medical marijuana clients who has been under FBI scrutiny for more than a year.

This story was first published by Missouri Independent.

GOP Senator Who Trashed Marijuana Banking Amendment Years Ago Is Now Cosponsoring Reform Bill

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