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This Is The Marijuana Banking Bill Democrats Plan To Pass In 2019: Draft Text Released

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Congressional Democratic leaders are circulating the text of a bill allowing marijuana businesses to store their profits in banks that they are considering passing this year.

The document was released by the House Financial Services Committee ahead of a scheduled Wednesday hearing on the cannabis industry’s lack of access to banks.

Authored by Reps. Ed Perlmutter (D-CO), Denny Heck (D-WA), Steve Stivers (R-OH) and Warren Davidson (R-OH), the draft bipartisan legislation contains several new provisions that didn’t appear in past bills on marijuana businesses’ access to depository institutions.

For example it specifies for the first time that ancillary businesses providing products or services to the cannabis industry should be allowed to bank, and adds protections for marijuana-related “retirement plans or exchange traded funds” as well as “the sale or lease of real or any other property [and] legal or other licensed services…relating to cannabis.” The “distributing or deriving any proceeds, directly or indirectly, from cannabis or cannabis products” is also covered under the bill.

“Maintaining a checking account or utiliz[ing] payment processors can prove challenging” even for businesses that don’t directly handle cannabis, a related memo prepared by the committee says, citing electricians, plumbers and landlords. “For example, in early 2017, dozens of companies selling ancillary products and services to cannabis-related businesses were unexpectedly purged and lost access to major payment processors, like PayPal and Square.”

Another new catch-all provision in the proposal makes clear that “proceeds from a transaction conducted by a cannabis-related legitimate business shall not be considered as proceeds from an unlawful activity solely because the transaction was conducted by a cannabis-related legitimate business.”

The draft also proposes adding explicit protections for banking services offered to marijuana businesses that are regulated by Indian tribes, in addition to those operating under state or local laws.

An additional change from previous bills adds language directing the Federal Financial Institutions Examination Council to develop “uniform guidance and examination procedures for depository institutions that provide financial services to cannabis-related legitimate businesses.”

And a related directive requires regulatory agencies like 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 and the National Credit Union Administration to each issue guidelines to banks for working with cannabis businesses.

A prior version of the bill in the last Congress garnered 95 House cosponsors, with a fifth of the Senate signing on to companion legislation. Neither were given a hearing or a vote.

The memo about the new draft legislation says that the proposed bill “would would harmonize federal and state law by prohibiting federal banking regulators from engaging in certain actions against financial institutions, such as discouraging, prohibiting, or penalizing depository institutions that serve cannabis-related legitimate businesses.”

The committee’s majority staff, which prepared the document, notes the growing gap between state and federal marijuana laws.

“An increasing number of financial institutions have expressed interest in providing banking services to state authorized cannabis-related businesses as nearly all states have authorized various degrees of cannabis use, such as for medical use,” they wrote. “Most states have deviated from an across-the-board prohibition of marijuana, and it is now more so the rule than the exception that states have laws and policies allowing for some cultivation, sale, distribution, and possession of marijuana—all of which are contrary to the federal Controlled Substances Act.”

After laying out a series of reports that banks must file about their marijuana-related customers under 2014 Obama-era guidance, the memo says that “many financial institutions remain reluctant to serve cannabis-related businesses, and many of those businesses continue to have little to no access to traditional banking services.”

“As such, cannabis-related businesses have been described as a ‘soft target’ for being robbed and assaulted, having their stores broken into, and their plants stolen,” the staffers wrote. “Despite the public safety and other risks, many of these businesses have to operate as purely cash businesses, unable to accept credit cards, deposit their profits or write checks to pay employees or taxes.”

The memo also makes clear that the legislation covers employees of banks. “This safe harbor is intended to provide certainty for financial institutions to offer their products and services to well-regulated cannabis-related businesses,” it says.

Rep. Maxine Waters (D-CA), the committee’s new chairwoman, said late last year that “it’s inevitable we are going to have to talk about” cannabis businesses’ access to banks. Now she’s making good on that statement by scheduling the hearing in her panel’s Subcommittee on Consumer Protection and Financial Institutions.

Banking is just one marijuana issue that Democrats are considering advancing legislation on in 2019 under a plan proposed by Rep. Earl Blumenauer (D-OR).

Other issues on the table include tax fairness for marijuana businesses, medical access for military veterans and removing barriers to scientific research—all potentially leading up to the passage of a broader bill to end federal cannabis prohibition by the end of the year.

For now, the focus is on banking, with the House subcommittee set to hear from the California state treasurer, a marijuana business owner, bankers and a law enforcement group working to end the war on drugs at the Wednesday hearing.

Read the draft marijuana banking bill below:

Draft Congressional Marijua… by on Scribd

Read the cannabis banking memo that the Financial Services Committee wrote below:

Congressional Marijuana Ban… by on Scribd

Here’s Who Will Testify About Marijuana On Capitol Hill Next Week

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 15-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.)

Politics

Where Presidential Candidate Bernie Sanders Stands On Marijuana

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Sen. Bernie Sanders (I-VT) is making another run for the Democratic presidential nomination, he announced on Tuesday.

From his time as the mayor of Burlington, Vermont, to his years in the U.S. Senate, Sanders has established himself as a champion of drug policy reform, particularly when it comes to marijuana. NORML gave the senator an “A+” grade based on his legislative track record.

And it didn’t take long for Sanders to incorporate drug reform into his latest presidential bid. In his announcement video, he reiterated that the government “needs to end the destructive war on drugs.”

Legislation And Policy Actions

Sanders has been behind some of the first and most wide-ranging legislative efforts to fundamentally change federal cannabis laws. He was the first major presidential candidate to endorse marijuana legalization during his last bid and, in 2015, filed the first-ever Senate bill to end federal cannabis prohibition.

He’s also attached his name to a number of reform bills in Congress, going back to his time in the House, as well as during his Senate tenure. That includes recent pieces of legislation such as the Marijuana Justice Act, which would remove marijuana from the Controlled Substances Act (CSA) and punish states with discriminatory enforcement, as well as the the Marijuana Freedom and Opportunity Act, which would federally deschedule cannabis.

More than 20 years ago, Sanders cosponsored a House bill to legalize and regulate medical marijuana. He also signed onto legislation that would reschedule cannabis and protect states with legal medical cannabis. He cosponsored versions of that bill in the 107th, 108th and 109th Congresses.

When Sanders arrived in the Senate, he began supporting efforts to reform federal hemp laws. He cosponsored three versions of a bill introduced by Sen. Ron Wyden (D-OR) to remove hemp from the definition of marijuana under the CSA, for example. And last Congress, he put his name on legislation to legalize industrial hemp.

The senator also backed bills to shield banks from federal prosecution if they choose to accept marijuana business accounts in legal states.

On four occasions in the House, Sanders voted in favor of amendments to protect legal medical marijuana states from federal intervention. He voted against a resolution in 1998 that was meant to express “the sense of Congress that marijuana is a dangerous and addictive drug and should not be legalized for medicinal use.”

Quotes And Social Media Posts

Sanders has been outspoken about his support for marijuana reform in speeches, during debates and on social media. His messaging around the issue typically falls into one of three categories:

1. Marijuana is not comparable to other drugs listed in Schedule I of the CSA, and it should be removed from that list, accordingly. 

“Right now, marijuana is listed by the federal government as a Schedule I drug—meaning that it is considered to be as dangerous as heroin. That is absurd,” he said during a rally at George Mason University in 2015. “In my view, the time is long overdue for us to remove the federal prohibition on marijuana.”

He lamented that “marijuana is listed side-by-side with heroin” during a campaign event at the University of Iowa.

“I know that you are an intelligent group of people and, very seriously, I know and I hope very much that you all understand what a killer drug heroin is,” he said. “There are two ways out when you do heroin: Number one, you’re gonna get arrested and go to jail. Number two, you’re gonna die. Stay away from heroin.”

“But in terms of marijuana what we are seeing is a lot of lives have been really hurt, because if you get a criminal record for possession of marijuana it could impact your ability to get a job,” he said. “And that is why I have introduced legislation and will move forward as president to take marijuana out of the Controlled Substances Act.”

And when then-Democratic presidential candidate Hillary Clinton proposed rescheduling cannabis and placing it in Schedule II, Sanders said he appreciated that she was addressing the issue but that her proposal “ignored the major issue,” which is that it would place “marijuana in the same category as cocaine and continue to make marijuana a federally regulated substance.”

2. Black Americans have been disproportionately impacted by the drug war and are more likely to be arrested for marijuana despite the fact that usage rates are roughly the same among different racial groups. 

“We must recognize that blacks are four times more likely than whites to get arrested for marijuana possession, even though the same proportion of blacks and whites use marijuana,” Sanders said in a press release. “Any serious criminal justice reform must include removing marijuana from the Controlled Substances Act.”

“I am glad to see Baltimore will no longer prosecute marijuana possession and will move to vacate some convictions,” Sanders said after the city’s top prosecutor made that announcement in early 2019. “Thousands and thousands of people across the country have had their lives destroyed because they have criminal records as a result of marijuana use—and it’s disproportionately affecting people of color. It is time to decriminalize marijuana and end the failed war on drugs.”

“Where it becomes a racial issue, it turns out that whites and blacks utilized marijuana roughly equal,” Sanders said during an interview with rapper Killer Mike in 2015. “Four times as many blacks are arrested for possession as whites. It becomes a racial issue.”

“The reality is that both the African-American community and the white community do marijuana at about equal rates,” he emphasized at a debate in Wisconsin. “The reality is four times as many blacks get arrested for marijuana.”

3. It is an injustice that young people can have their lives upended by a non-violent cannabis conviction while Wall Street bankers avoid prosecution for financial crimes. 

“If some kid in Iowa or Vermont today is picked up possessing marijuana, that kid will get a police record that will stay with him for the rest of his life,” Sanders said at a rally in Iowa in 2016. “But the executives on Wall Street who drove this country into the worst economic recession since the Great Depression, whose greed and illegal behavior resulted in millions of Americans losing their jobs, their homes, their life savings, these executives who pay billions of dollars in settlement agreements with the government, not one of them has been prosecuted. Not one of them has a criminal record.”

“It is an obscenity that we stigmatize so many young Americans with a criminal record for smoking marijuana, but oddly enough not one major Wall Street executive has been prosecuted for causing the near collapse of our entire economy,” he said during a speech before the National Urban League. “Doesn’t make a whole lot of sense to me.”

Before he got behind full marijuana legalization, Sanders’s position on drug policy has varied somewhat.

When he was campaigning to be governor of Vermont in 1972, he seemed to embrace legalizing all drugs in an attempt to pushback against what he described as the “gradual erosion of freedoms and the sense of what freedom really means” under the administration of President Richard Nixon, writing that the government should “abolish all laws dealing with abortion, drugs, sexual behavior.”

As states like Colorado began legalizing cannabis for adult use, Sanders said in interviews that he recognized that the issue was gaining popularity and pledged to study it closely. He voiced support for Vermont’s decriminalization policy and medical marijuana legalization generally.

Sanders also complained about how federal laws impede the effective implementation of state-level marijuana programs, stressing that cannabis businesses struggle to access banking services, for example.

“I think there are things that the federal government can do that would make it easier for states that want to go in that direction to be able to do so,” he said in 2015. “What the federal government can do is say to the state of Colorado that if you choose to vote to legalize marijuana, we will allow you to do that without restrictions.”

He also called for federal decriminalization as a response to the “continuation of millions of people over the decades getting police records because they were caught possessing marijuana.”

Sanders has criticized moves from the Justice Department under President Donald Trump to dismantle guidelines on federal marijuana enforcement priorities.

“No, Attorney General [Jeff] Sessions. Marijuana is not the same as heroin,” he said in a statement last year before Sessions rescinded the Cole memo. “No one who has seriously studied the issue believes that marijuana should be classified as a Schedule I drug beside killer drugs like heroin.”

“Quite the contrary. We should allow states the right to move toward the decriminalization of marijuana, not reverse the progress that has been made in recent years,” he said.

He also congratulated Canada when the country passed a law legalizing cannabis for adult use and said “it is long past time that we in the United States end the federal prohibition on marijuana.”

And he congratulated Seattle when the city’s judges decided to green light expungements for past marijuana possession convictions.

“We must decriminalize marijuana nationally and expunge federal marijuana use and possession crimes,” he wrote.

Personal Experience With Marijuana

Sanders said that he smoked marijuana decades ago but that the plant “didn’t do much for me.”

“I smoked marijuana twice and all I did was cough my guts out, so it didn’t work for me,” he said at a rally in Las Vegas. “But I do understand other people have had different experiences.”

That said, the senator has made a point of emphasizing that his efforts to reform marijuana laws is not meant “to encourage anybody to smoke marijuana.”

Marijuana Under A Sanders Presidency

As the first major presidential candidate to endorse marijuana legalization—and as someone who has introduced and cosponsored some of the most far-reaching cannabis bills in Congress—Sanders has already made marijuana history in his career. He signaled again in his announcement speech that addressing the harms of the drug war would be a priority if he’s elected, and part of that agenda would likely involve seriously considering legislation to end the federal prohibition of marijuana.

While most 2020 Democratic presidential candidates have backed legalization at this point, Sanders’s long-standing record of standing up for drug policy reform gives voters relatively strong assurance that marijuana legalization would be near the top of his priorities as president.

Where Presidential Candidate Amy Klobuchar Stands On Marijuana

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Lawmakers Push FDA To Allow CBD-Infused Food Products

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A bipartisan group of members of Congress is pushing the Trump administration to provide a legal pathway for food products infused with the marijuana compound cannabidiol, better known as CBD.

In a letter sent to the Food and Drug Administration (FDA) on Friday, the lawmakers wrote that a series of recent actions by state and local officials in New York City, Maine and Ohio to crack down on the sale of CBD foods and beverages have “spurred a tremendous amount of confusion among product manufacturers, hemp farmers, and consumers of these products.”

FDA has so far refused to say whether it was involved in the local crackdowns in any way.

“In light of the aforementioned state enforcement actions and the resulting confusion, we are calling on FDA to swiftly provide guidance on lawful pathways for food products with CBD,” the 12 lawmakers, led by Rep. Chellie Pingree (D-ME), wrote to FDA Commissioner Scott Gottlieb.

Following the federal legalization of hemp and products derived from it late last year through the Farm Bill, FDA released a lengthy statement saying that it reserves the right to regulate cannabis-based products. The agency would take action against businesses making unsupported claims about CBD’s therapeutic potential, it said, even if the products in question were derived from legal hemp crops, and it warned against introducing such products into interstate commerce.

Gottlieb did say in the statement, however, that “pathways remain available for the FDA to consider whether there are circumstances in which certain cannabis-derived compounds might be permitted in a food or dietary supplement.”

He also said that FDA would hold a public meeting on the issue to “gather additional input relevant to the lawful pathways by which products containing cannabis or cannabis-derived compounds can be marketed, and how we can make these legal pathways more predictable and efficient.”

Now, the group of House members is urging him to hurry it up, and they want answers to the following questions by Friday:

1. When will FDA provide guidance on lawful pathways for food products with CBD? For example, it would seem the GRAS Notification Program would be one such pathway.

2. Has FDA advised states—such as New York, Maine or Ohio—that have recently taken enforcement actions against food products with CBD?

3. When will FDA hold a public hearing on the regulation of products containing CBD?

“States are looking for immediate leadership from the Federal Government to eliminate confusion around this issue,” the House lawmakers wrote. “Furthermore, numerous states are pursuing legislative efforts that would allow for the intrastate commerce of food products with CBD, potentially leading to a patchwork of state regulations.”

Lawmakers joining Pingree on the letter include Reps. Earl Blumenauer (D-OR), Don Young (R-AK), Tulsi Gabbard (D-HI), Mark Pocan (D-WI), Ed Perlmutter (D-CO) and Peter Welch (D-VT), among others.

Separately, lawmakers have sent a number of other letters to federal agencies recently about aspects of the Farm Bill’s hemp legalization provisions.

For example, Senate Majority Leader Mitch McConnell (R-KY) and Sen. Ron Wyden (D-OR), who together championed hemp legalization to passage, wrote to the U.S. Department of Agriculture last week urging that it move “expeditiously” to implement regulations on the newly legal crop.

Wyden and Sen. Jeff Merkley (D-OR) also sent a separate letter to the FDA last month criticizing “outdated regulations,” that “limit producers from taking full advantage of the industrial hemp market” such as the development of hemp-derived CBD products.

Read the full text of the new CBD letter to the FDA below:

Lawmakers Push FDA On CBD F… by on Scribd

FDA To Take Steps Toward Allowing CBD Products Following Hemp Legalization

Photo courtesy of Brendan Cleak.

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Legalization Supporters Slam Kamala Harris Endorsement From Marijuana Reform Champion Barbara Lee

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Rep. Barbara Lee (D-CA) is facing backlash from marijuana legalization advocates over her early endorsement of Sen. Kamala Harris (D-CA) in the 2020 presidential race.

The congresswoman, who last month became the first woman and first person of color to co-chair the Congressional Cannabis Caucus, and who has long been one of Capitol Hill’s most dedicated marijuana reform supporters, said in a statement that Harris has exhibited a “deep passion for justice and opportunity” throughout her career as a prosecutor.

But others have been critical of the senator’s time in the criminal justice system and particularly her role in enforcing harsh drug laws as a prosecutor. That sentiment was on full display after Lee tweeted about how marijuana criminalization has fueled mass incarceration on Saturday—two days after her endorsement of Harris.

“More people are arrested for marijuana than for all other violent crimes combined,” Lee wrote. “Marijuana has long been a driving force for mass incarceration in this country and I’m fighting to end it.”

Hundreds of Twitter users replied that the statement and her endorsement of Harris don’t line up.

“That candidate for 2020 you’re endorsing has been a driving enforcement for exactly this,” one user said in a tweet that generated more than 300 likes.

Harris has tried to rectify her image as a tough-on-crime prosecutor, going so far as to cosponsor wide-ranging legislation to end federal cannabis prohibition. She even admitted to using marijuana during college in a recent interview.

Still, her former offices’ involvement in punitive action against low-level drug offenders during her time as a San Francisco prosecutor and California state attorney general has created a lingering perception among many reform advocates who question her motivations. And for some, the memory of Harris laughing off a reporter’s question about marijuana legalization in 2014 burns bright.

The replies to Lee’s tweet didn’t quite rise to the level of a “ratio” (a Twitter phenomenon in which a post gets more angry replies than retweets or likes), but the overwhelming pushback against her endorsement makes clear that the Democratic presidential candidate will likely continue to face skepticism from marijuana legalization supporters and the broader criminal justice reform crowd as her campaign expands and the presidential race heats up.

Lee’s office did not respond to Marijuana Moment’s request for comment on this story.

Kamala Harris’s SnoopGate Is What A Political Marijuana Controversy Looks Like In 2019

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