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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.)

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Congressional Committee Asks JUUL For Documents On Marijuana Partnerships

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Is the e-cigarette company JUUL planning on expanding its stake in the marijuana industry?

That’s one question the chair of a congressional subcommittee asked the company in a letter concerning JUUL’s role in the “youth e-cigarette epidemic” earlier this month.

Lawmakers have frequently criticized JUUL for making products—specifically flavored e-cigarette cartridges—that allegedly appeal to young people at a time when rates of cigarette use are steadily declining. But while JUUL was developed by the cannabis vaporizer company PAX, it hasn’t announced plans to further partner with marijuana companies.

Rep. Raja Krishnamoorthi (D-IL), who chairs the House Subcommittee on Economic and Consumer Policy, apparently sees the possibility on the horizon, though.

In a letter sent to JUUL on June 7, the congressman said his panel was investigating youth e-cigarette usage and, specifically, how the company’s marketing tactics might be exacerbating the issue. He requested documents on everything from clinical trials on how JUUL devices divert people away from traditional cigarettes to communications on the company’s rationale for the nicotine concentration of JUUL pods.

Tucked within the extensive request is a question about potential marijuana partnerships. Krishnamoorthi asked for:

“All documents, including memoranda and communications, referring or relating to proposals, plans, and/or intended partnerships or collaborations between JUUL and any cannabis-related companies, including but not limited to Cronos Group.”

It’s not clear where the Cronos-specific mention comes from, but the company has perviously caught the interest of the tobacco industry. The maker of Marlboro cigarettes, Altria Group, invested almost $2 billion in the Canada-based cannabis company in December. Two weeks later, Altria invested $13 billion in JUUL.

Marijuana Moment reached out to JUUL, Cronos and Krishnamoorthi’s office for comment, but representatives did not respond by the time of publication.

If a partnership does emerge, it would likely be met with some controversy, as opponents and proponents of marijuana reform alike have long expressed concern that the tobacco industry would take over the cannabis market and commercialize it in a way that mirrors how it peddled cigarettes.

Of course, given that tobacco use is declining and tobacco companies generally have the infrastructure that would make a pivot to cannabis relatively simple, such a partnership would not be especially surprising.

Senate Majority Leader Mitch McConnell (R-KY) has made the case several times that tobacco farmers in his state could leverage the federal legalization of industrial hemp and its derivatives by growing the crop to offset profit losses from declining tobacco sales.

Read Rep. Krishnamoorthi’s full letter to JUUL below:

2019-06-07.Krishnamoorthi t… by on Scribd

Americans Want CBD Available Over-The-Counter, Poll Finds

Photo courtesy of Wikimedia.

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New York Lawmakers Might Actually Vote On Marijuana Legalization This Week

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With just days left before the end of the legislative session, efforts to legalize marijuana in New York have been revived, with a possible vote this coming week.

Though momentum to pass a legalization measure seemed to largely die off after lawmakers in neighboring New Jersey announced they wouldn’t move forward with plans to end cannabis prohibition through the legislature, advocates are increasingly optimistic that a deal in the Empire State is imminent.

Democratic members in both the Senate and Assembly held conferences last week to discuss details of the legislation. Spectrum News reported that the meetings went well, with members indicating that there’s support for the measure.

That’s just one of several positive signs that a proposal many observers thought was dead for the year has new life.

On Saturday and Sunday, staff for legislative leaders from both chambers and Gov. Andrew Cuomo (D) met to negotiate provisions of a revised legalization plan.

On Wednesday, an earlier Senate version of the bill was assigned “same as” status in the Assembly version. That means the current proposals in each chamber lined up with identical language and is considered to be an indicator that the legislation could pass.

Assembly Speaker Carl Heastie (D) said on Friday that his party has yet to determine whether they’ll bring the bill to the floor, but he added that “I think there is support in the conference.”

He also characterized the window of time until the end of the session on Wednesday as “an eternity.”

Cuomo, who said late last month that passing legalization remains a top 10 priority, has said that lawmakers who fail to approve items on his agenda, including ending cannabis prohibition, “should all be primaried, because that is a failure of a basic progressive agenda.”

On the flip side, the chairman of New York’s Democratic Party said earlier this month that if the Senate approves the legalization bill, they run to risk of alienating voters in certain areas such as Long Island and upstate New York. But that argument neglects to account for recent polling that shows voters in those regions strongly support legalization.

Notably, the measure’s most vocal opponents with the anti-legalization Smart Approaches to Marijuana have been sending email blasts in recent days urging their supports to call senators and voice opposition to the bill, giving the impression that the group is anticipating a vote.

Assembly Majority Leader Crystal Peoples-Stokes (D), sponsor of the legalization legislation, seemed to confirm that suspicion on Friday, stating that after “conversations with my co-sponsor and colleague in the Senate, I am even more confident of a path for victory.”

But despite that confidence, the fate of legalization in New York remains murky. An analysis earlier this month found that legalization was two votes short of a needed majority in the Senate.

Meanwhile, a number of key elected officials are calling on the governor and lawmakers to not only push legalization over the finish line but to include certain key provisions in the final legislation.

State Attorney General Letitia James (D) sent a letter urging that the bill expunge prior cannabis records.

“Before we create a booming business for legal marijuana, we must provide relief to those individuals that have paid much more to society than what was due,” she wrote.

New York City Mayor Bill de Blasio (D), a 2020 presidential candidate, also pushed for expungements and said in a Twitter thread that legalization should “empower local business and not big corporations.”

And the Manhattan and Albany County district attorneys co-authored an op-ed calling leaders to “correct staggering inequities and promote public safety by passing” legalization.

 

The Buffalo News reported on Sunday afternoon that there were still a number of outstanding issues left to be settled between lawmakers, including whether or not home cultivation of cannabis would be allowed, how tax revenue would be allocated and whether localities would have to proactively opt in to allowing marijuana businesses or if there would instead be an opt out provision for those wanting to ban cannabis commerce.

The session ends on Wednesday, and so far no vote has been scheduled in either chamber.

Meanwhile, lawmakers early on Monday morning filed what appears to be backup legislation to expand the decriminalization of marijuana and to provide a process to expunge or vacate prior cannabis convictions. And others support putting legalization on the ballot through a referendum that voters can decide on.

The situation is very fluid, and over the next few days advocates will be stepping up the push for action in Albany. On Sunday, they held a rally outside Cuomo’s Manhattan office.

Bill Allowing Interstate Marijuana Commerce Heads To Oregon Governor’s Desk

This post has been updated to include the latest developments as well as comment from a number of elected officials.

Photo courtesy of Philip Steffan.

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.
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Texas Governor Signs Bill To Expand State’s Medical Marijuana Program

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The governor of Texas signed a bill into law on Friday that significantly expands the state’s medical cannabis program.

The legislation, which was overwhelmingly approved by lawmakers last month, adds multiple medical conditions to the list of disorders that qualify patients of low-THC marijuana. Currently only patients with intractable epilepsy qualify under the CBD-focused program.

New qualifying conditions include epilepsy, multiple sclerosis, terminal cancer, autism, spasticity and amyotrophic lateral sclerosis.

Gov. Greg Abbott (R) signed the bill with little fanfare.

Reform advocates said the legislation is a big step in the right direction, even though it doesn’t go as far as they’d hoped. A 0.5 THC cap on marijuana products remained in the bill, for example, and a section that would have established a research program to study the therapeutic potential of cannabis was removed.

“Cannabis is effective medicine for many patients suffering from debilitating medical conditions,” Heather Fazio, director of Texans for Responsible Marijuana Policy, told Marijuana Moment. “HB 3703 represents a positive step toward a functional medical cannabis program, but sadly, it still leaves behind millions of Texas families that could benefit from legal access.”

Also this legislative session, the House of Representatives approved bills to more comprehensively expand the medical cannabis program and to decriminalize marijuana possession, but they died in the Senate.

Abbott signed a hemp legalization bill earlier this week.

Bill Allowing Interstate Marijuana Commerce Heads To Oregon Governor’s Desk

Photo courtesy of Brian Shamblen.

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.
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