The top financial regulators in 25 states and U.S. territories are joining together to pressure Congress to pass legislation allowing marijuana businesses to store their profits in banks.
“It is incumbent on Congress to resolve the conflict between state cannabis programs and federal statutes that effectively create unnecessary risk for banks seeking to operate in this space. The looming threat of civil actions, forfeiture of assets, reputational risk, and criminal penalties is not conducive to a legal, regulated marketplace,” the officials wrote to House and Senate Democratic and Republican leaders in a letter on Monday.
“We urge Congress to consider legislation that creates a safe harbor for financial institutions to serve a state-compliant business or entrusts sovereign states with the full oversight and jurisdiction of marijuana-related activity,” the regulators continued. “Establishing a safe harbor for banks to serve these entities would help reduce the risk associated with large cash-and-carry operations and bring the safeguards, activities, and sales associated with this business into the regulatory reporting compliance framework.”
Although a growing number of states are moving to legalize cannabis for recreational or medical use, continuing federal prohibition leaves many banks reluctant to work with marijuana businesses, forcing growers, processors and retailers to largely operate on a cash-only basis—which can make them targets for robberies.
In March, the House Financial Services Committee approved a bill to shield banks from being punished by federal regulators for providing financial services to marijuana businesses operating in accordance with state laws. Advocates expect the legislation, which cleared the panel in a bipartisan vote of 45-15, to be considered on the floor within the next several weeks.
Last week, more than a fifth of the U.S. Senate filed identical cannabis banking legislation, though it has not yet been scheduled for a hearing or a vote.
The new letter from state officials was led by Pennsylvania Secretary of Banking and Securities Robin L. Wiessmann and is co-signed by regulators from states such as Alaska, Colorado, Georgia, Massachusetts, New York, Oklahoma and Utah, among others.
“A majority of states now have medical marijuana programs and it has become increasingly necessary to craft policy to respond to emerging challenges in this rapidly growing industry,” Wiessmann said in a press release. “Establishing a safe harbor for banks to serve these entities would help reduce the risk associated with large cash-and-carry operations and bring the safeguards, activities, and sales associated with this business into the regulatory reporting compliance framework.”
Wiessmann led a group of 13 state financial regulators in sending a similar letter to Congress last year.
Trump administration officials have indicated they’d like Congress to resolve the issue sooner rather than later.
“There is not a Treasury solution to this. There is not a regulator solution to this,” Treasury Sec. Steven Mnuchin said during a House hearing last week. “If this is something that Congress wants to look at on a bipartisan basis, I’d encourage you to do this. This is something where there is a conflict between federal and state law that we and the regulators have no way of dealing with.”
In a separate hearing he pledged to have his staff review the pending cannabis banking legislation and provide a possible endorsement within two weeks.
Earlier this month, three Federal Reserve Bank presidents called on Congress to solve the issue.
In February, Federal Reserve Chairman Jerome Powell said during a Senate hearing that it “would be great to have clarity” on cannabis banking.
“Financial institutions and their regulators and supervisors are in a very difficult position here with marijuana being illegal under federal law and legal under a growing number of state laws,” he said. “It puts financial institutions in a very difficult place. It puts supervisors in a difficult place too.”
In the new letter to congressional leadership, the state banking officials wrote that “barriers for financial institutions to serve marijuana and ancillary businesses create a commercial risk from the lack of robust and comprehensive regulation and supervision and a diminished ability to identify operators acting to circumvent federal and state licensing and regulatory frameworks.”
“This raises concerns with respect to tracking the flow of funds, issues of public safety because of cash volume, and a loss of economic activity, workforce development and community development opportunities,” they wrote. “We must work together to look for solutions rather than ignoring the new policy landscape.”
Austin Police Chief Says Marijuana Arrests Will Continue Despite City Council Vote
Chief Brian Manley said he would continue to enforce marijuana laws the day after the city council unanimously approved stopping arrests and tickets for low-level cases.
The day after the Austin City Council approved a resolution to stop arresting or ticketing people for most low-level marijuana possession offenses, the police chief made clear he had no plans to do so.
“[Marijuana] is still illegal, and we will still enforce marijuana law if we come across people smoking in the community,” Chief Brian Manley said during a news conference Friday afternoon.
Though cracking down on those in possession of small amounts of marijuana has never been a priority for the department, he said, police will continue to either issue tickets under the city’s “cite-and-release” policy or arrest people if officers “come across it.”
The difference, according to City Council member and resolution sponsor Greg Casar, is that the council’s move now guarantees those actions will come with no penalty. Tickets will be meaningless pieces of paper and any arrests will result in a quick release with no charges accepted from prosecutors, he told The Texas Tribune after the news conference.
“What has changed since yesterday is that enforcement, almost in virtually all cases, is now handing someone a piece of paper with no penalty or no court date,” Casar said.
The move by the City Council came as a direct result from Texas’ new hemp law which complicated marijuana prosecution across the state. Last summer, when lawmakers legalized hemp, they also changed the definition of marijuana from cannabis to cannabis that contains more than 0.3% THC, the psychoactive ingredient in the plant.
Many prosecutors, including those in Austin’s Travis County, now won’t accept pot cases based on look and smell alone, requiring lab testing to determine THC levels before accepting a case. Such testing is not yet available in public crime labs, though some counties and cities have spent money to obtain test results from private labs.
The council’s resolution prohibited using city funds or personnel to conduct such testing in non-felony marijuana cases. It also directed the elimination, to the furthest extent possible, of arrests or citations for cannabis possession. As Manley also noted, the resolution clarifies it can’t technically decriminalize marijuana, since that is state law.
The resolution gave the city manager until May 1 to report back to the council on how police were trained in this new resolution, and Casar said he hopes Manley reviews his policies before then.
Manley said in the news conference that he would continue to review the resolution, as well as police policies.
But, he assured, “a City Council does not have the authority to tell a police department not to enforce a state law.”
The Texas Tribune is a nonprofit, nonpartisan media organization that informs Texans — and engages with them — about public policy, politics, government and statewide issues.
Andrew Yang Wants To Legalize Psychedelic Mushrooms For Military Veterans
Andrew Yang says he wants to legalize psilocybin mushrooms for military veterans to help them combat mental health conditions such as post-traumatic stress disorder (PTSD).
During a town hall event at an Iowa college on Thursday, the 2020 Democratic presidential candidate was asked whether he would take initiative and allow veterans to access medical marijuana if elected. Yang replied he “will be so excited to be that commander-in-chief” that he would not only end federal cannabis prohibition but would go one step further by legalizing the psychedelic fungus for veterans as well.
“We need to get marijuana off of the Controlled Substances Act and legalize it at the federal level, make it freely available,” he said. “I say this because I’ve talked to hundreds of veterans and other Americans who benefit from marijuana as a pain relief treatment, and it’s much less deadly than the opiates that many, many people are using for the same conditions.”
“I’ve talked to veterans who’ve also benefited from psilocybin mushrooms,” he added. “They said it was the only thing that actually has helped combat their PTSD. I’m for legalizing psilocybin mushrooms for veterans as well. Pretty much if it’s going to help a veteran, we should make it easier, not harder, for them to get access to it.”
Yang’s drug policy reform platform is unique in that respect. While the majority of Democratic candidates support marijuana legalization, he’s pushed unique proposals such as decriminalizing possession of opioids and making psilocybin mushrooms “more freely available” for therapeutic purposes. The candidate also wants to invest federal funds in safe injection facilities where individuals can use prohibited drugs in a medically supervised environment and receive help getting into treatment.
He hasn’t gone so far as embracing the decriminalization of all drugs, as former South Bend, Indiana Mayor Pete Buttigieg has, however.
That said, Yang did signal that he’s open to legalizing and regulating “certain drugs” beyond cannabis, which he argued would disrupt international drug cartels. Rep. Tulsi Gabbard (D-HI) recently said she backs “legalizing and regulating” currently illegal controlled substances to protect public safety and combat the illicit market.
At the Iowa town hall, Yang went on to say that he’s particularly interested in legalizing marijuana, and he again pledged to “pardon everyone who’s in jail for a non-violent marijuana-related offense because they shouldn’t be in jail for something that’s frankly legal in other parts of the country.”
“And I would pardon them all on April 20, 2021, high-five them on the way out of jail and be like, ‘things got a lot better in the last year,'” he said, referencing the unofficial cannabis holiday 4/20.
Photo element courtesy of Gage Skidmore.
Tom Steyer Calls For Marijuana Legalization And Opioid Decriminalization
Billionaire philanthropist Tom Steyer is calling for the legalization of marijuana and decriminalization of opioid possession.
In a criminal justice reform plan released on Thursday, the 2020 Democratic presidential candidate laid out a vision for ending the drug war, which he said has contributed to mass incarceration and is enforced in a racially disproportionate manner.
“Tom believes we must end the failed War on Drugs. Based on the flawed idea that incarceration is the answer to addiction, federal and state elected officials passed severe sentencing laws that encouraged incarceration for low-level drug offenses,” the plan states. “Unfortunately, communities of color were and continue to be disproportionately affected and targeted by these laws, even when other ethnicities were committing the same drug crimes at the same rates.”
Today @TomSteyer announced a new criminal justice plan to:
– Reform the juvenile system
– Improve prison conditions
– Redirect funds to education
– Eliminate cash bail
– Release more rehabilitated people
– End the war on drugs
And much more! 👉 https://t.co/3VYRw7ioXB
— TeamTom 🌎 (@TomHQ) January 24, 2020
There are six proposals in the drug war section, including legalizing cannabis and expunging prior marijuana convictions, ending mandatory minimum sentences and empowering judges to use more discretion in non-violent drug cases, diverting people convicted of drug offenses to treatment or drug court, ending the sentencing disparity between crack and powder cocaine, sealing the records of certain drug convictions and decriminalizing opioids while investing $75 billion in treatment programs and holding pharmaceutical companies accountable.
Steyer specifically endorsed House Judiciary Committee Chairman Jerrold Nadler’s (D-NY) Marijuana Opportunity Reinvestment and Expungement (MORE) Act, which would deschedule cannabis, expunge prior convictions and set aside tax revenue to support communities most impacted by the drug war.
“Policing marijuana use has led to too many unfair incarcerations and predominantly impacted communities of color,” the plan says. It also criticizes then-Attorney General Jeff Sessions’s 2018 move on “repealing leniency given to states for marijuana laws.”
Today, I'm meeting with formerly incarcerated individuals to talk about transforming the criminal justice system through police accountability, ending cash bail, providing adequate funding to re-entry programs, and so much more. pic.twitter.com/m9lDEKWwwU
— Tom Steyer (@TomSteyer) January 23, 2020
“A Steyer Administration will also open equitable pathways to banking for marijuana businesses,” it continues. “The federal government—including the Federal Deposit Insurance Corporation—should not be a barrier to marijuana businesses receiving support from their local banks.”
“Incarceration is not the answer to addiction, and low-level drug offenses should not carry a severe sentence. Tom will legalize marijuana, let states pass their own policies, expunge past records, and direct the federal government to open banking services to the marijuana industry. Tom’s administration will end the disparity between crack and cocaine sentences, decriminalize opioid possession, and invest $75 billion to address the opioid crisis.”
The opioid decriminalization proposal is similar to that of entrepreneur Andrew Yang, another 2020 candidate who said removing criminal penalties for possessing the substance is necessary in order to help get people into treatment and curb the opioid crisis. Former South Bend, Indiana Mayor Pete Buttigieg and Rep. Tulsi Gabbard (D-HI) have gone further, calling for the decriminalization of all drug possession and, in Gabbard’s case, also the legalization and regulation of illicit drugs.
“Tom supports decriminalizing small amounts of opioid possession for personal use at the federal level,” the plan states. “He will address the opioid crisis through $75 billion in new funding over ten years to resource state and local treatment programs, hold big pharmaceutical corporations and their executives accountable, and strongly enforce laws that end the illicit distribution and sale of opioids.”
This is a notable development for Steyer, who hasn’t discussed drug policy reform as much as many other candidates in the race and whose views on decriminalization of substances beyond marijuana were previously unknown.
Last year, Steyer said he supported creating a national referendum process so that Americans can made decisions about a wide range of policy issues, including cannabis legalization.
He also previously discussed his support for ending marijuana prohibition and providing the industry with access to banking, saying that he and his wife wanted to provide financial services to minority- and women-owned cannabis firms through their community bank, but federal prohibition means the business would be put at risk if they did that.
Steyer’s new plan also calls for juvenile justice reform, ending cash bail, banning facial recognition technology in policing, demilitarizing law enforcement, improving prison conditions and eliminating the death penalty, among other reforms.
Photo courtesy of Flickr/Gage Skidmore.