A powerful U.S. Senate panel has moved to block an amendment to let marijuana businesses store their profits in banks.
In a 21 – 10 vote, the Senate Appropriations Committee tabled an amendment on Thursday that would have shielded financial institutions that open accounts for cannabis businesses that are complying with state laws from being punished by federal regulatory authorities.
Current policy, which forces many marijuana businesses to operate on an all-cash basis, is “a big problem because it’s great for organized crime, it’s great for money laundering, it’s great for theft and larceny, it’s great for cheating on taxes, it’s great for cheating on your payroll,” Sen. Jeff Merkley (D-OR), the sponsor of the measure, said in a brief debate before the vote. “We’re really facilitating crime by not enabling the banking industry to provide basic services.”
Last week, the House Appropriations Committee defeated a similar cannabis banking proposal.
Several Democratic members of the Senate panel who said they otherwise support the ability of marijuana businesses in a growing number of states to access financial services objected on procedural grounds to the measure, which Merkley was seeking to attach to the Fiscal Year 2019 Financial Services and General Government funding bill.
Sen. Patrick Leahy (D-VT), for example, said that he wanted to keep spending legislation “free of new controversial policy riders” and that a more appropriate forum would be an authorizing committee that sets banking laws.
Nonetheless, Leahy himself has sponsored appropriations amendments to prevent the Justice Department from interfering with state medical cannabis laws instead of insisting that those measures go through the authorizing Judiciary Committee.
Also voicing opposition to the move were Sens. Christopher Coons (D-DE) and Jon Tester (D-MT).
“I’ve supported it in the past and I think it’s different today,” Tester said. “It adds a level of confusion to the folks who are out there doing business,” adding that it would give a “false hope” to cannabis providers because it only deals with the Department of the Treasury and not the Justice Department.
“Do I think these businesses ought to be able to bank?” he said. “Absolutely.”
Sen. James Lankford (R-OK), who is a vocal legalization opponent, also spoke up. “This amendment would [make] a confusing situation for banks and pot shops around the country…more confusing,” he said.
Legalization advocates were upset by the committee’s move.
“The Senate Appropriations Committee chose to bury its head in the sand rather than make it easier for licensed and regulated marijuana businesses to operate safely, transparently or effectively,” Justin Strekal, political director for NORML, said in an interview. “It’s absurd.”
Don Murphy of the Marijuana Policy Project added, “Today was a victory for the drug cartels and anyone else who benefits from billions of dollars of unaccountable, untraceable and unbankable cash.”
Ongoing federal marijuana prohibition and related money laundering laws have made many banks reluctant to work with cannabis businesses.
Nonetheless, new Treasury Department data first reported last week shows that a steadily increasing number of financial institutions have been opening accounts for marijuana growers, processors, retailers and related outfits even as Attorney General Jeff Sessions makes anti-cannabis moves and comments.
The House of Representatives passed a cannabis banking amendment in 2014 by a vote of 231 to 192, but the provision was not included in final spending legislation that year. Congressional Republican leadership has since blocked floor votes on cannabis measures.
Several Trump administration officials have indicated they would like to see a resolution to the issue.
Federal Reserve Chairman Jerome Powell said last week that the gap between state and federal cannabis laws “puts federally chartered banks in a very difficult situation.”
“It would great if that could be clarified,” he said.
Treasury Sec. Steven Mnuchin has implied in several appearances before congressional committees that he wants marijuana businesses to be able to access banks.
“I assure you that we don’t want bags of cash,” he testified before a House committee in February. “We do want to find a solution to make sure that businesses that have large access to cash have a way to get them into a depository institution for it to be safe.”
In another hearing he said that fixing cannabis banking issues is at the “top of the list” of his department’s concerns.
And Federal Deposit Insurance Corporation Chairwoman said on Tuesday that she’s asked staff to think about how to address marijuana banking issues, but that for now the agency’s hands are “somewhat tied.”
Despite the defeat of the banking amendments in House and Senate committees this month, there has been a recent string of other developments demonstrating marijuana’s political momentum.
Last week, the Texas Republican Party voted to adopt platform planks endorsing marijuana decriminalization, medical cannabis, industrial hemp and federal reclassification of the drug.
Earlier this month, President Trump voiced support for bipartisan congressional legislation that would allow states to enact marijuana legalization laws without federal interference. U.S. Senate Majority Leader Mitch McConnell (R-KY) is leading the charge for hemp legalization, with the support of Minority Leader Chuck Schumer (D-NY).
See the full text of the marijuana banking amendment as considered by senators below:
“None of the funds made available in this Act may be used, with respect to the States of Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, and Wyoming, or with respect to the District of Columbia, Puerto Rico, or Guam, to penalize a financial institution 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.”
See the full committee roll call vote on tabling the amendment (an Aye vote is to block the measure from advancing):
- Mitch McConnell, Kentucky – Aye by proxy
- Lamar Alexander, Tennessee – Aye
- Susan Collins, Maine – Aye
- Lisa Murkowski, Alaska – Aye
- Lindsey Graham, South Carolina – Aye by proxy
- Roy Blunt, Missouri – Aye
- Jerry Moran, Kansas – Aye by proxy
- John Hoeven, North Dakota – Aye
- John Boozman, Arkansas – Aye
- Shelly Moore Capito, West Virginia – Aye
- James Lankford, Oklahoma – Aye
- Steve Daines, Montana – No
- John Kennedy, Louisiana – Aye
- Marco Rubio, Florida – Aye by proxy
- Cindy Hyde-Smith, Mississippi – Aye
- Richard Shelby, Alabama, Chairman – Aye
- Patrick Leahy, Vermont, Ranking Member – Aye
- Patty Murray, Washington – No by proxy
- Dianne Feinstein, California – No by proxy
- Dick Durbin, Illinois – Aye by proxy
- Jack Reed, Rhode Island – Aye by proxy
- Jon Tester, Montana – Aye by proxy
- Tom Udall, New Mexico – No
- Jeanne Shaheen, New Hampshire – No by proxy
- Jeff Merkley, Oregon – No
- Chris Coons, Delaware – Aye
- Brian Schatz, Hawaii – No by proxy
- Tammy Baldwin, Wisconsin – No
- Christopher Murphy, Connecticut – Aye by proxy
- Joe Manchin, West Virginia – No
- Chris Van Hollen, Maryland – No
Company Gets Trademark For The Word ‘Psilocybin,’ Frustrating Decriminalization Advocates
As psychedelics reform efforts pick up across the U.S., there’s an increasing weariness among advocates about the potential corporatization that may follow.
That’s why many found it alarming when a California-based company announced on Thursday that it had successfully trademarked the word “psilocybin,” the main psychoactive constituent of so-called magic mushrooms.
Psilocybin™ is a brand of chocolates that do not contain the psychedelic itself but are meant to “begin educating, enlightening and supporting the community in upgrading their inner vibrations in order to get everything they want of their time here on earth,” according to a mission statement.
Soon after founder Scarlet Ravin shared news of the trademark on LinkedIn, advocates raised questions and concerns: What does that mean on a practical level for other psilocybin organizations? Why should one brand get exclusive rights (to a certain legal extent) to the scientific name of a natural substance?
The reality of this particular trademark is more nuanced than it might appear at first glance. While it’s true that the company was granted the distinction by the U.S. Patent and Trademark Office, it’s specifically for educational materials and it’s listed on the supplemental register, rather than the principal register, which means it would be incumbent upon the brand to prove that it has earned distinctiveness of the mark if the issue went to court.
“It’s certainly good for her business to have that mark, but I think at the end of the day, it’s going to be somewhat weak,” Larry Sandell, an intellectual property attorney at Mei & Mark LLP, told Marijuana Moment. He added that this example is “indicative that people are trying to stake early claims to IP.”
“Even if they might be somewhat overreaching, people see a potential new market here and they want to stake out their ground,” he said. “It’s a big next space that people are anticipating a legal market. Maybe it’s where cannabis was five to 10 years ago.”
Despite those legal limitations, reform advocates view the trademark as emblematic of a bigger issue—that someone would presume to take ownership of a substance that’s at the center of a national debate on whether or not to criminalize individuals for using it.
Kevin Matthews, who led the successful campaign to decriminalize psilocybin mushrooms in Denver last year and is the founder of the national psychedelics advocacy group SPORE, told Marijuana Moment that he didn’t doubt Ravin had the right intentions—to promote education into the substance—but he said the decision to trademark is nonetheless questionable.
“This being an open-source movement, trademarking the word psilocybin, in some ways it feels like—although I don’t think this is her intention—it’s lacking perspective,” he said. “Does that mean we can’t use psilocybin as SPORE because we’re an educational non-profit and she’s a for-profit branded company? It doesn’t make a lot of sense to me. She needs to let go of the trademark.”
Ravin said that her goal in trademarking psilocybin was to prevent the substance from being becoming the next cannabis, which she said has been corrupted from its “true spiritual, medicinal benefit” and turned into a corporate commodity.
“Knowing that psilocybin is going to be next [to be legalized] I feel strongly guided by the deepest part of my heart to really offer a sense of education of what could be when you take such a strong, beautiful medicine and to give people an education platform here and now to let them know what’s coming, how to receive it, how to get the most benefit from,” she told Marijuana Moment in a phone interview.
“We paved the way for this being a medicinal offering and not a consumer, recreational shitshow. That was our intention,” Ravin said. “The only way that we are going to have access to mainstream consumers is by having some sort of trademark on the word so that we can use it for something that’s not what it actually is.”
“With this being something that we can now put into market with a box of chocolates that has no psilocybin in it, but as you can already see, it creates a platform for discussion of what the beauty of this plant can do,” she said. “Me and my movement and my team, we don’t own the word. We’re not going to ever sue anyone who also uses the word—we’re opening a doorway for ourselves and anyone that wants to see this educated upon so that we can hit people who are unfamiliar with it now with downloads to actually have this be a safe, successful psychedelic transition.”
Asked to react to criticism about the trademark from advocates, Ravin said “we’re all here to follow spirit guidance to show love and light, and the visions I had of doing what we’re doing now was based upon breaking boundaries and breaking perceptions and allowing people to have an opportunity to sink into being one unit.”
“Yeah, it might be coming out, we might be using the platform of psilocybin. We can use any platform to do this,” she said. “We can use any platform to come together as a whole, and the longer that people sit in duality and say, ‘oh now she’s going to have a stronger voice than me is just looking at something not through their heart,’ it’s looking at it through ego and judgement.”
“The more that we describe what we’re doing, the more people I think will start to feel our unity and we’ll be able to move together as a stronger force than pointing fingers and trying to separate one another,” she said. “Those days are done.”
Ravin said that once the Psilocybin™ chocolates are ready for market, she plans to contribute 10 percent of profits to the Multidisciplinary Association for Psychedelic Studies (MAPS), which is involved in researching therapeutic benefits of psychedelic substances.
Photo courtesy of Wikimedia/Workman.
China Must Import More Hemp From U.S. Under New Trade Deal
After years of being one of the United States’s main sources of hemp imports, China will now be required to buy a lot more of the non-intoxicating cannabis crop from the U.S. under a new trade deal.
Hemp, which was federally legalized under the 2018 Farm Bill, is one of a long list of agricultural products that China agreed to import on a larger scale over the next two years as part of an international trade agreement that was signed on Wednesday.
“The Parties acknowledge that trade and economic structural changes resulting from this Agreement and from other actions being taken by China to open up its economy and improve its trade regime should lead to improved trade flows, including significant increases in exports of goods and services to China by the United States and other countries,” the accord says.
“The Parties believe that expanding trade is conducive to the improvement of their bilateral trade relationship, the optimal allocation of resources, economic restructuring, and sustainable economic development, given the high degree of complementarity in trade between them. The Parties recognize that the United States produces and can supply high-quality, competitively priced goods and services, while China needs to increase the importation of quality and affordable goods and services to satisfy the increasing demand from Chinese consumers.”
While the deal didn’t specify just how much more hemp China will be importing, the document states that the country must spend at least $12.5 billion more than it did in 2017 on more than 200 agricultural commodities, including the cannabis plant, for calendar year 2020. The following year, it must spend at least $19.5 billion more.
Included in the deal is a particular form of cannabis, which is referred to as “true hemp” in the document.
“True hemp (cannabis sativa l.), raw or processed but not spun; tow and waste of true hemp (including yarn waste and garnetted stock),” the description of the item states.
Jonathan Miller, general counsel for the U.S. Hemp Roundtable, told Marijuana Moment that hemp’s inclusion in the trade deal is a “really good development.”
“The fact that China would be importing our hemp and would be giving a new market for American farmers is pretty exciting,” he said, referring to the fact that the U.S. has historically imported the crop from China and that it has sometimes been criticized as being of inferior quality.
While cannabis has been cultivated in China for thousands of years, the country has only recently begun expanding the industry domestically. Part of the delay has to do with strict anti-drug laws, but as the legalization has spread internationally, more businesses are getting into the hemp, and particularly CBD, market.
Meanwhile, in the U.S., the hemp industry has exploded, with bipartisan lawmakers working with regulators to ensure that hemp farmers have access to the resources they need to expand and meet booming consumer demand for CBD products. The U.S. Department of Agriculture (USDA) is currently finalizing its regulations for the crop after releasing an interim final rule last year.
USDA clarified in guidance last year that hemp plants and seeds are able to be imported from other countries. In 2018, the U.S. imported about $3.3 million in hemp from China, according to Hemp Industry Daily.
Photo courtesy of Pixabay.
Coca-Cola Denies CBD Beverage Rumor Spurred By Video
Coca-Cola denied that it has plans to enter the CBD market in a statement to Marijuana Moment on Thursday.
The comment comes after a man who said he obtained a prototype of a childproof can of Coke claimed to have insider knowledge of the soda company’s intent to launch a line of CBD-infused drinks in partnership with the Canadian cannabis company Aurora.
In a video shared on YouTube on Wednesday, the individual, who goes by Gabor the Blind Guy, said his father is an engineer for a company that “produces bottling and capping machines” for pharmaceutical and food businesses.
“Recently he was approached by Coca-Cola in Canada to design a machine that puts a childproof cap on cans of Coca-Cola,” he said. “In Canada, Coca-Cola is coming out with a new line of Coca-Cola that contains CBD extracts—pretty much cannabis-based drugs.”
“Obviously, they don’t want little kids popping open those cans and drinking them…so my dad was tasked with designing a cap that will prevent little kids from opening these cans of CBD Coca-Cola,” he said.
The description of the video on YouTube mentioned the alleged partnership with Aurora.
Watch a mirrored version of the now-deleted YouTube video below:
But on Thursday, a media relations officer for Coca-Cola told Marijuana Moment that the “rumors are untrue.”
“As we have stated many times, we have no plans to enter the CBD market.”
Gabor claimed that his father gave him a prototype of a non-CBD can with the cap he designed because he wanted to see if a blind person could open it. The video led some to speculate that he inadvertently disclosed confidential information that could be in violation of a non-disclosure agreement.
On Reddit, users questioned whether the video was authentic. Some wondered if the claim was an attempt to boost Aurora’s stock. However, marijuana wasn’t a main focus of Gabor’s YouTube prior videos posted over a period of years.
Marijuana Moment also reached out to Aurora for comment, but a representative was not immediately available.
This isn’t the first time that people have speculated about Coca-Cola’s potential interest in entering the cannabis space. Bloomberg reported last year that the company was monitoring the industry but hadn’t made any decisions yet.
Coca-Cola CEO James Quincey has said on several occasions that the company isn’t planning to get involved in the cannabis market.
“There’s been no change in my position, which is: there’s nothing happening,” he said in July.
“We want to sell drinks that people can drink each day. So it’s not like you have something once,” he told CNBC last year. “You have one a day. And if you can’t cross [off] those three things of legal, safe and consumable, it’s not an ingredient that’s going to work for us.”
— CNBC (@CNBC) October 30, 2018
Also in a statement last year, Coca-Cola said the company has “no interest in marijuana or cannabis.”
“Along with many others in the beverage industry, we are closely watching the growth of non-psychoactive CBD as an ingredient in functional wellness beverages around the world,” the statement read. “The space is evolving quickly. No decisions have been made at this time.”
With respect to prior rumors about talks specifically between Coca-Cola and Aurora, the soda company declined to comment when previously pressed. Aurora said in a statement that it had “no agreement, understanding or arrangement with respect to any partnership with a beverage company.”
Image via Gabor the Blind Guy.