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Rand Paul Pushes Hemp Banking Amendment



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:


       (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 
       (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 
       (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 
       (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.
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Tom Angell is the editor of Marijuana Moment. A 15-year veteran in the cannabis law reform movement, he covers the policy and politics of marijuana. Separately, he serves as chairman of the nonprofit Marijuana Majority. Previously he reported for 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.)


Major Alcohol Association Endorses States’ Rights To Legalize Marijuana



For the first time ever, a major alcohol association has come out in support of ending federal marijuana prohibition so that states can legalize cannabis without interference.

The Wine & Spirits Wholesalers of America (WSWA) announced “an official policy position in favor of a state’s right to establish a legal, well-regulated, adult-use cannabis marketplace,” in a press release on Thursday.

The announcement represented a significant departure from the association’s past statements on marijuana reform. Just two years ago, WSWA said in a sponsored advertisement that it was “neutral on the issue of legalization,” going on to caution congressional officials about the “dangers associated with the abuse and misuse of marijuana,” including drug-impaired driving.

Now the alcohol trade group is singing a different tune.

“The legal cannabis market continues to expand in the United States, generating $7.2 billion in economic activity in 2016,” Thursday’s press release reads. “WSWA believes that, similar to alcohol, the federal government should give states the power to legalize cannabis, but should ensure they meet an appropriate regulatory threshold.”

“Eight decades ago, Americans acknowledged that the Prohibition of alcohol was a failed policy. The state-based system of regulation, adopted after Prohibition, created a U.S. beverage alcohol market that is the safest, most competitive and best regulated in the world.” — WSWA Acting Executive Vice President for External Affairs Dawson Hobbs

WSWA went on to outline 13 policies it recommended for states that legalize recreational marijuana.

  • A minimum age of 21 for purchase, possession and use, along with penalties for providing cannabis to minors;
  • Establishment of Driving Under the Influence impaired driving standards;
  • Licensing of producers, processors, distributors and retailers; Policies to prevent vertical monopoly/integration;
  • Hours and days of sale parity with beverage alcohol;
  • Tax collection and enforcement; Measures to prevent diversion of cannabis to other states;
  • Restrictions on sale/common carrier delivery;
  • Labeling requirements that include potency and health requirements;
  • Testing of formulas to ensure product purity and consistency;
  • Advertising restrictions designed to discourage underage access and promote responsible consumption;
  • Restrictions on health claims on packaging;
  • Establishment of a designated agency overseeing cannabis industry regulation in each state;
  • Penalties for licensee violations on par with the state’s alcohol regulations;
  • and Regulations that ensure all products in market can be tracked/traced to source processor/producer.

So what changed from two years ago?

While the group’s sudden embrace of local cannabis legalization efforts might strike some as odd given the intrinsic, competitive dynamic that’s developed between alcohol and marijuana interests, one aspect of the press release reveals how the broader booze industry could stand to profit:

“Legalization should include regulations that set age restrictions on buyers, as well as license and regulate the supply chain of cannabis, including growers, distributors, retailers and testing laboratories.” [Emphasis added.]

In other words, marijuana legalization might take a bite out of alcohol sales—as recent studies have shown—but the cannabis industry has diverse roles for various players to fill. Ancillary operators such as distributors now working under the current three-tier model for alcohol could be used in states with legal, regulated marijuana markets.

Hobbs denied that the association was trying to help the alcohol industry cash in on legal cannabis during an interview with Fox Business on Thursday.

“No, what we’re talking about is just creating a pathway for states to have federal recognition of legalization by enacting appropriate regulation that creates a safe and reliable marketplace,” Hobbs argued. He also said that the association wouldn’t be lobbying Attorney General Jeff Sessions to take action on federal marijuana policy, but rather the group’s focus would be on Congress.

Marijuana Moment reached out to WSWA for comment, but a representative was not immediately available.

What remains to be seen is whether other alcohol associations will follow suit. After all, a handful of alcohol interests, including the Arizona Wine and Spirits Wholesale Association and the Boston Beer Company donated to campaigns opposing legalization efforts during the 2016 election.

With this latest development from a major alcohol association, it seems the industry is conceding: If you can’t beat ’em, join ’em.

Cuomo Administration Report Backs Marijuana Legalization In New York

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James Cole Talks Jeff Sessions And Marijuana Legalization



Former Deputy Attorney General James Cole wasn’t especially surprised when he learned earlier this year that Attorney General Jeff Sessions rescinded his 2013 landmark namesake memo that provided guidance to U.S. attorneys on marijuana enforcement priorities. But he’s also skeptical that the policy regression will stand the test of time.

In a phone interview with Marijuana Moment, Cole discussed how the memo came to fruition (he conversed with President Barack Obama during the drafting, but declined to comment on the substance of those conversations), the future of cannabis policy in the United States and how, contrary to Sessions’s past statements, good people do smoke marijuana.

Cole, who will be a keynote speaker at the National Cannabis Industry Association’s Cannabis Business Summit & Expo later this month, is currently a partner at the law firm Sidley Austin LLP.

This interview has been lightly edited for length and clarity. 

Marijuana Moment: Can you describe your reaction after hearing that Jeff Sessions rescinded your memo?

James Cole: I was not completely surprised. Certainly, the attorney general had expressed his views about marijuana and the marijuana industry. He had also, however, expressed views that he thought that the memo did a pretty good job of trying to rectify and regulate a difficult area because of the legal complications of it.

As to his reasons that it was unnecessary, I didn’t agree with that. I thought that, in fact, it was necessary. My concern in drafting the memo was public safety and trying to make sure that, accepting the fact that marijuana was going to be used on an increasing basis based on the resolutions in the states, you wanted to keep the cartels and the gangs out of it. And the best way to do that was by providing a regulatory scheme that would allow legitimate businesses that are well-regulated to exist so they can comply with the law, so that any revenue that may be generated can be brought into the state coffers, so that the enforcement of the regulations can be funded.

It just seemed to me that certainty being the hallmark of any business,  the uniformity of the policy throughout the United States was a necessary element. Right now you’ve got 93 different U.S. attorneys who are given the discretion to decide what to do, and that does not bring certainty or uniformity. Whether there will be a change of enforcement activity, I don’t know. There’s certainly a change in policy and there’s certainly less comfort in the industry about what to do.

MM: On that last point, it doesn’t appear that there’s been a lot of eagerness on the part of federal prosecutors to crack down on the legal marijuana industry since the memo was rescinded. What do you make of that?

JC: I think some of it is a political reality. In the states that have legalized marijuana, obviously U.S. attorneys—although a lot of them are not permanently appointed, many are just acting at this point—they are political creatures. They are politically appointed in one form or another, and many times they look at being a U.S. attorney as a political stepping stone. So I think they’re responsive to what the political will is in the states where they reside. 

That’s one of the realities that really enters into the enforcement mechanism. Is this really a place to use the resources of the federal government or not? The concerns that come in that jurisdiction can be vast and wide, and you may have a U.S. attorney in one jurisdiction—one that doesn’t have legalization—reaching out into a jurisdiction that does have legalization because there’s some kind of jurisdiction hook. I haven’t seen that yet. I don’t know if that’s ever going to happen, but that could be one of the concerns. At the end of the day, the rescission of the memo may prove to be more symbolic than it is substantive.

MM: When you started drafting the memo, were you having conversations about the issue with President Obama or White House staffers?

JC: Yes.

MM: Can you speak to the nature of those conversations?

JC: No, I cannot. No, I don’t talk about my conversations with the president.

MM: What would you tell marijuana business owners concerned about the possibility of a federal crackdown?

JC: Obviously, in most jurisdictions, lawyers are limited in what kind of advice they can give in this space because it is illegal under federal law. So we can advise quite easily about whether or not a particular course of conduct that somebody wants to take is legal or not. We can advise on what we believe the Department of Justice enforcement policy is—it’s a little less certain than it used to be. We can advise on what other laws come into play.

But ultimately, it comes down to a risk appetite for most companies that want to operate here as to whether or not they will accept a level of risk that whatever they’re doing may get prosecuted with whatever comes with that—which is both the threat of fines, maybe imprisonment, perhaps forfeiture.

MM: Do you feel that federal marijuana legalization is an inevitability?

JC: I believe it is. I look at the new [congressional] legislation that’s been proposed, which is, I believe, simple and straightforward. I think Congress is where the activity needs to take place. I think it is moving toward that. There’s growing acceptance of it. I think it’s a matter of ‘when’ and not ‘if’ at this point.

MM: Are there good people who smoke marijuana, contrary to what Sessions has said in the past?

JC: Yes, there are. There are. There are cancer patients, there are people with glaucoma, who get palliative effects from smoking marijuana. I wouldn’t call them bad people. I disagree with that.

Analysis: GOP Congress Has Blocked Dozens Of Marijuana Amendments

Photo courtesy of the Department of Justice. 

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Congress Could Vote On These Marijuana Amendments Next Week (Unless GOP Blocks Them Again)



The U.S. House of Representatives could vote next week on amendments that would let marijuana businesses access banks and allow the city of Washington, D.C. to spend its own money on legalizing and regulating recreational cannabis sales.

That’s if Republican leaders don’t block their colleagues from even being able to consider the measures on the floor.

The House Rules Committee, led by ardent prohibitionist Chairman Pete Sessions (R-TX) has already stymied nearly three dozen cannabis amendments from advancing during the current Congress, as shown by a Marijuana Moment analysis earlier this week. Exactly zero marijuana-related measures have been cleared by GOP leaders for floor votes since the summer of 2016.

Analysis: GOP Congress Has Blocked Dozens Of Marijuana Amendments

But that hasn’t stopped a growing bipartisan list of lawmakers who support cannabis law reform from continuing to try.

The two newly proposed amendments on banking and D.C. are being offered to a large-scale bill to fund parts of the federal government for Fiscal Year 2019. The legislation is expected to be considered by the Rules Committee next week before being sent to the floor.

The pending D.C. measure would allow the city to expand on its current voter-approved law that allows adults to legally use, possess and grow small amounts of marijuana. An ongoing federal appropriations rider has prevented officials from adding a system of taxed and regulated cannabis sales.

The amendment, filed by Rep. Eleanor Holmes Norton (D-DC), with the support of Reps. Dana Rohrabacher (R-CA), Barbara Lee (D-CA) and Earl Blumenauer (D-OR), would strip the marijuana regulation ban from the budget bill so the city could spend its own money enacting whatever cannabis laws it sees fit.

“I will expose any Member who interferes in D.C.’s local affairs so their constituents see them focusing on our business instead of theirs by trying to force a vote on the House floor on each and every anti-home-rule rider,” Norton said in a press release that also addressed other measures she filed to beat back congressional interference in the district’s lawmaking processes.

The second new cannabis amendment would prevent federal regulators from punishing a bank “solely because the institution provides financial services to an entity that is a manufacturer, producer, or a person that participates in any business or organized activity that involves handling marijuana or marijuana products and engages in such activity pursuant to a law established by a State or a unit of local government.”

Similar amendments to let cannabis businesses access banks were defeated in by House and Senate Appropriations committees last month.

A marijuana banking measure was approved on the House floor in 2014 by a margin of 231 to 192, but its language was not included in final enacted legislation that year.

The current amendment is sponsored by Rep. Denny Heck (D-WA), along with Rohrabacher, Blumenauer, Lee, and Norton. They are joined by Reps. Ed Perlmutter (D-CO), Jared Polis (D-CO), Dina Titus (D-NV), Don Young (R-AK), Jacky Rosen (D-NV), Jason Lewis (R-MN), Matt Gaetz (R-FL), Tom McClintock (R-CA), Jared Huffman (D-CA), Chellie Pingree (D-ME), Betty McCollum (D-MN) and Tulsi Gabbard (D-HI).

That is by far the most cosponsors of any of the 229 amendments filed on the pending FY2019 funding bill so far.

But huge bipartisan cosponsor lists haven’t prevented Pete Sessions and the Rules Committee from preventing floor votes on cannabis measures for the past several years. It remains to be seen if this time will be different.

Readers who support Marijuana Moment on Patreon can read the full text of the newly proposed cannabis amendments below:

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