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Top Federal Financial Regulator Slams Congress Over Marijuana Inaction And Calls For Interagency Banking Workgroup

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A board member and former chairman of the federal National Credit Union Administration (NCUA) is sharply criticizing Congress for failing to reform marijuana laws, and he announced on Thursday that he will be taking steps to push lawmakers to enact policy changes to help financial institutions and stakeholders caught in the federal-state cannabis conundrum.

NCUA’s Rodney Hood said at the PBC Conference that he’s “concerned that the legal and regulatory infrastructure surrounding the cannabis industry is not evolving quickly enough,” and congressional inaction is largely to blame. He also said that he feels legalization at the federal level is an inevitability.

To help fill the policy gap, the regulator is calling for the creation of an interagency working group of federal financial regulatory agencies to develop a “principles-based approach to cannabis banking” and “deliver a preliminary regulatory framework that we can share with other regulators and members of Congress who share our concern about addressing these problems.”

“Let me be clear about where I stand,” he said, according to his remarks as prepared for delivery that were obtained by Marijuana Moment. “It is time for federal action to clarify and harmonize the laws and regulations surrounding the state-legal cannabis industry and marijuana-related businesses, so that this industry can take part in the legitimate financial services industry.”

Hood is a longtime regulator at NCUA, an independent federal agency that provides deposit insurance to credit unions. He served from 2005 to 2009 under the Bush administration, was named chairman by President Donald Trump in 2019 and served for two years before transitioning to a board position.

That long-term service under multiple administrations makes Hood’s comments on marijuana policy all the more noteworthy. Rarely do regulators openly take such forceful policy positions, especially those that aren’t necessarily shared by the administrations with which they work.

Hood didn’t endorse any particular pieces of legislation, though his remarks do specifically mention the Secure and Fair Enforcement (SAFE) Banking Act, and he said Congress needs to effectively “harmonize” federal and state cannabis laws so that the industry is no longer kneecapped and financial institutions don’t have to fear being penalized for servicing marijuana businesses.

He also spoke more broadly about the prospect of federal legalization and characterized it as an inevitability.

“I’ve heard a variety of perspectives, but there’s one common refrain: they all agree that legalization is a matter of when, not if—and they urge federal action to get it done,” he told attendees at the conference on cannabis banking, payments and compliance. “Legalization in some form is going to happen, and the abdication of responsibility to address these issues in Washington is simply ludicrous. This is precisely the time we need leadership at the federal level to steer this ship in the right direction.”

“It’s simply a remarkable social and cultural change that has taken place right before our eyes,” Hood said, referring to the growing number of states changing their laws, “and it’s only going to continue to develop over the coming years.”

“Yet while this revolution has unfolded, federal law surrounding marijuana and cannabis-derived products has barely changed. There have been some welcome changes at the federal level, like delisting hemp from the list of controlled substances in the 2018 Farm Bill, but even those changes have been slow to arrive and relatively marginal. And there’s been no meaningful legal change on the federal level when it comes to marijuana, despite all the rhetoric around marijuana legalization federally.”

One key consequence of the federal cannabis stalemate is that this explosive industry is currently left without traditional financial tools or access to the banking system, Hood said, pointing out that federal data indicates fewer than 200 credit unions report servicing state-legal marijuana businesses despite NCUA representing more than 5,000 financial institutions.

He said that disconnect “can only be described as a serious market failure.” And Hood intends to do what he can both internally at NCUA and on an interagency level to promote solutions.

NCUA has its own cannabis banking workgroup, the regulator said, and he will be working with them to “determine what we might do next to better address the challenges to cannabis banking on our side.”

But a broader effort that brings in multiple federal financial agencies is necessary, he argued. And helpfully, there’s an existing infrastructure for that coordination through the Federal Financial Institutions Examination Council. Hoods wants the agencies that are part of the council to “take the lead on this issue and to start developing a principles-based approach to cannabis banking.”

Further, the official said he will be personally lobbying Congress in his capacity as an NCUA board member to enact reform, while also pushing credit union trade associations to similarly pressure lawmakers to take up the issue.

“The problem is not with the financial institutions themselves; many of them would be happy to provide services to the industry, but they’re unsure of how to proceed given the limited FinCEN guidance,” Hood said, referring to an Obama-era memo that laid out how banks can serve cannabis businesses. “We have this promising industry that’s developing and growing rapidly—yet no way for the people who work in this industry to conduct the most fundamental business operations through legitimate financial channels. That is, frankly, an untenable situation.”

“Here’s a basic reality: as a rule, regulators really don’t like to get out too far ahead of the policy process. We always seek to respect the existing statutes, and to defer to Congress as the policy-making arm of the government. However, there are times when an independent regulator in the executive branch needs to step forward to provide leadership, or at least nudge things along. I believe that’s the case today with marijuana and the financial services industry.”

Advocates are largely pushing for legislation that would comprehensively reform federal marijuana laws, but there are some who feel Congress should first advance bipartisan cannabis banking legislation because it stands a stronger chances of passage and could help resolve critical public safety issue.

Hood said the SAFE Banking Act is an example of a proposal that he’s heard could improve the situation for financial institutions and clients. That legislation has passed the House on multiple occasions, most recently in April, but it’s so far languished in the Senate as leading lawmakers prioritize broader reform.

Hood also mentioned that, last year, NCUA separately issued a memo explaining issues related to providing financial services to hemp businesses after the crop was federally legalized.

Other panelists who are set to participate in the PBC Conference include Congressional Cannabis Caucus Co-chair Rep. Barbara Lee (D-CA), Rep. Eleanor Holmes Norton (D-DC) and several current and former Internal Revenue Service officials.

Read Hood’s full remarks as prepared for delivery below:

Rodney E. Hood

National Credit Union Administration

PBC Conference 2021:

Payments, Banking, Compliance in the Cannabis Industry

September 9, 2021

Thank you very much, and it’s a pleasure to join you today.

I was sworn in as the chairman of the NCUA board in 2019, but this is actually my second term of service on the board. I was appointed to the NCUA in 2005 under President Bush; I served a four-year term that ended in 2009. I can tell you that serving two appointments at the same agency, separated by a decade, is one way to gain a unique vantage point on how rapidly things can change.

For example, when I first served on the NCUA board, I don’t know that I would have attended this type of conference. Of course, that’s assuming I would have been invited in the first place.

 At that time, several states had already allowed qualified patients to access and use marijuana for medicinal purposes, but as a regulator I would not have considered the banking challenges of the cannabis industry to be at the top of my list of concerns. Of course, during that time we were also facing the housing crisis, the financial industry meltdown, and the subsequent recession and recovery – so we were focused on some particularly compelling priorities.

Well, here we are today, which is a testament to how fast things can evolve in a relatively short time. I take that idea of change and evolution as my theme today, because as a regulator, I’m concerned that the legal and regulatory infrastructure surrounding the cannabis industry is not evolving quickly enough.

 And so as not to leave you in suspense, let me be clear about where I stand: it is time for federal action to clarify and harmonize the laws and regulations surrounding the state-legal cannabis industry and marijuana-related businesses (MRB), so that this industry can take part in the legitimate financial services industry.

 Growth of an industry, and new challenges

 For our purposes here today, I don’t need to recount all of the statistics about the number of states that have legalized cannabis in one form or another, or the explosive growth of the state-legal cannabis industry over the last decade. If you weren’t already familiar with those facts and statistics, you wouldn’t be here. It’s simply a remarkable social and cultural change that has taken place right before our eyes, and it’s only going to continue to develop over the coming years.

 Yet while this revolution has unfolded, federal law surrounding marijuana and cannabis-derived products has barely changed. There have been some welcome changes at the federal level, like delisting hemp from the list of controlled substances in the 2018 Farm Bill, but even those changes have been slow to arrive and relatively marginal. And there’s been no meaningful legal change on the federal level when it comes to marijuana, despite all the rhetoric around marijuana legalization federally.

 As a result, we’ve seen only limited development of the basic commercial banking infrastructure needed to provide financial services to this rapidly growing industry. Looking at the data from the Treasury Department’s Financial Crimes Enforcement Network, or FinCen, as of the end of last year there were only 515 U.S. banks and 169 credit unions providing banking services to MRBs in accordance with the 2014 FinCEN guidelines, which as you all know is currently the only legitimate way for cannabis businesses to secure depository accounts with financial institutions.

 Let’s think about those numbers. My agency, the NCUA, regulates the system of federally insured credit unions, which includes more than 5,000 institutions. Yet only 169 of those are providing services to one of the fastest growing industries in the nation? That can only be described as a serious market failure.

 The problem is not with the financial institutions themselves; many of them would be happy to provide services to the industry, but they’re unsure of how to proceed given the limited FinCEN guidance. The guidance from FinCen, along with the Justice Department’s guidance in the 2013 Cole memo, which that Cole memo was rescinded anyway, was at least a start. But those were published in 2014 and 2013, respectively—almost a decade ago—and are too vague in any event to give financial institutions the clarity and confidence they need to move forward with cannabis banking beyond providing basic bank account services.

 Which means we have this promising industry that’s developing and growing rapidly – yet no way for the people who work in this industry to conduct the most fundamental business operations through legitimate financial channels. That is, frankly, an untenable situation. In stating these facts, I’m not telling you anything you don’t know – again, it’s why we’re here today. The more critical question centers around what needs to happen next.

 Here’s a basic reality: as a rule, regulators really don’t like to get out too far ahead of the policy process. We always seek to respect the existing statutes, and to defer to Congress as the policy-making arm of the government. However, there are times when an independent regulator in the executive branch needs to step forward to provide leadership, or at least nudge things along. I believe that’s the case today with marijuana and the financial services industry.

 The hemp precedent

 I have some relevant experience here based on the work we did at NCUA two years ago to normalize banking services for hemp-related businesses. One of the first regulatory reforms I undertook at the request of Senator McConnell was to push for interim regulatory guidance on providing financial services to hemp-related businesses. Many credit union industry leaders were focused on this issue, and we knew we needed to take action.

 After Congress legalized hemp as an agricultural commodity, removing it from the list of controlled substances and allowing its cultivation in accordance with applicable State Plans, there remained a lack of clarity about the industry’s regulatory status while we awaited new rules from the U.S. Department of Agriculture. Keep in mind that the 2018 Farm Bill only addresses the cultivation of hemp — it is silent regarding the production and processing of hemp-derived products like CBD, which represents a huge slice of the hemp market in the United States.

 And so a lot of hemp entrepreneurs found themselves stuck in a regulatory limbo – and as a result, financial services providers were unsure of how to work with them, especially since FinCEN guidelines only addressed state-licensed marijuana businesses and bank accounts. This new industry needed access to financial services to get off the ground – these entrepreneurs needed access to capital to invest in facilities and equipment; they needed to be able to meet payroll; they needed access to bank accounts so they didn’t have to rely on cash transactions; and so forth. Does that sound familiar?

 So I wanted the NCUA to take a leadership role in providing some clarity while we worked through that transition. In our initial interim guidance, we sought to keep it fairly simple, and to give credit unions the flexibility they needed to work with lawfully operating hemp-related businesses. As long as they did their due diligence and managed their risks accordingly, we wanted credit unions to be able to experiment with the best way to work with these businesses. Based upon feedback to our initial guidance, we followed that up with additional advisory guidance in June 2020, to address unforeseen issues and to provide additional clarity.

 Our approach was not overly prescriptive or heavy-handed. We wanted to provide credit unions the room to experiment and to decide for themselves how best to serve this burgeoning industry while we awaited the definitive regulatory guidance from the USDA, which finally took effect this year.

 Now, there are still some significant challenges in the hemp space, and things haven’t progressed as quickly there as we might like, in part because they still don’t have a clear regulatory direction from the Food and Drug Administration. But I’m proud that, at least when it came to credit unions, we were able to take a leading role in setting standards and clarifying a forward direction.

 Next steps

 I’d like to see something similar happen for cannabis and marijuana-related businesses, which is why I’d like to outline three steps that I would like to take now, as a regulator, to move this issue forward:

    • First, we already have a working group at the NCUA devoted to cannabis banking, and I’ve been in communication with them and will be working with them to determine what we might do next to better address the challenges to cannabis banking on our side. At this point, we may be somewhat limited in what we can achieve, but I’m urging the agency to think hard about taking those next steps.
    • Second, and this might be the most significant action item we can achieve right now, I am calling for the establishment of a formal working group on the part of financial regulators to take the lead on this issue and to start developing a principles-based approach to cannabis banking. The good news is that we already have a vehicle through which this could be accomplished: the Federal Financial Institutions Examination Council, or FFIEC. Most of you have never heard of FFIEC, which is fine, but it’s an interagency body that develops uniform principles, standards, and report forms for the federal examination of financial institutions. The NCUA is a member, and I’ve done a lot of work with the council over the years, so I know it’s a natural place for this working group to reside and to deliver a preliminary regulatory framework that we can share with other regulators and members of Congress who share our concern about addressing these problems.
    • Third, I will urge Congress, in my capacity as an individual Board member, to take action to address cannabis banking as the 2014 FinCEN guidelines are simply not enough to support what hemp and cannabis businesses need to grow and sustain. You’re probably aware there are various legislative proposals dealing with these challenges. I’m told the SAFE Banking Act, for example, includes a number of promising proposals that would go a long way toward providing the clarity we need, but for now I don’t plan to endorse any particular piece of legislation. Congress should make that determination, but I will be happy to provide any advice or guidance from the regulators’ perspective that will be of assistance. In fact, just next week I’ll be talking to one of the credit union trade associations on their annual visit to meet with members of Congress, and I’ll be encouraging them to help us make the case to their representatives and senators. I certainly appreciate the members of Congress who are taking part in this conference today, and I look forward to working with them to make progress on this issue.

A caveat here: I’m a financial services industry regulator, and I can only speak to issues related to that area. I recognize there are a host of other regulatory issues that will need to be considered to address consumer protection issues, environmental issues, and other concerns.

 The good news is that the banking issues should be relatively straightforward, compared to some of those challenges. We’re talking here primarily about taking deposits; opening up lending at reasonable rates of interest; and opening increased access to payment systems so you don’t have to handle massive piles of cash. If we can address those needs in a straightforward manner, we create an on-ramp to legitimize the cannabis industry while ensuring the safety and soundness of the financial system. Really, these should not be such difficult issues to address, should they? The 2014 FinCEN guidelines laid the groundwork for depository accounts, but it’s time now to build on those guidelines to accommodate the rapid growth of the industry.

 Conclusion

 I’ve spent a good deal of time and energy on this issue over the last couple of years, talking to experts on the legal side, on the industry side, in the financial services industry. I’ve heard a variety of perspectives, but there’s one common refrain: they all agree that legalization is a matter of when, not if – and they urge federal action to get it done.

 The bottom line is this: Legalization in some form is going to happen, and the abdication of responsibility to address these issues in Washington is simply ludicrous. This is precisely the time we need leadership at the federal level to steer this ship in the right direction. In one of my discussions with an attorney who works on these issues, he noted that this is a unique opportunity to create a completely new industry – but that will require rethinking an outdated approach to marijuana that centers around the prohibition mindset.

 As the great management thinker Peter Drucker noted, “The greatest danger in times of turbulence is not the turbulence – it is to act with yesterday’s logic.” Or perhaps in this case, to fail to act based on yesterday’s logic. It’s time to get past yesterday’s logic and focus on the future.

 Moreover, as I look at this promising, growing industry, I can’t help but notice that it sits comfortably at the intersection of several of my top priorities: regulatory reform; support for entrepreneurialism and innovation; and financial inclusion. That’s a tremendous opportunity that brings tremendous challenges – but it requires leadership to get it done. And continued inaction, just allowing a patchwork of ad hoc state solutions to take effect, is not my idea of leadership.

 The fact that we haven’t had adequate federal leadership on cannabis banking to date doesn’t mean that we can’t have leadership now, so I’m happy to take what actions I can to create forward momentum. For those of you in the industry, I can’t promise you that you’ll get everything you want—but certainly if we can address key needs like commercial lending and opening access to electronic payments for this industry, we’ll have made a significant step forward. And my pledge to you is that I’ll be working with you to get it done. Thank you.

Maryland Lawmakers Take First Step Toward Putting Marijuana Legalization On 2022 Ballot

Photo courtesy of Brian Shamblen.

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Maryland Lawmakers Must Override Governor’s Drug Paraphernalia Decriminalization Veto (Op-Ed)

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“Criminalization, marginalization, isolation, injury and death are all part of a largely preventable cycle of harm.”

By Scott Cecil, Maryland Matters

The writer is a regional ambassador of the Baltimore Harm Reduction Coalition.

At the urging of public health professionals and harm reduction advocates during the 2021 session, the Maryland legislature approved Senate Bill 420 decriminalizing the possession of drug paraphernalia. Gov. Larry Hogan’s (R) decision to veto that bill flies in the face of the expertise of those same public health professionals and harm reduction advocates.

His action constitutes a failure to meaningfully respond to the calls to abolish hyper-criminalization in policing, reimagine public safety in our society and address the crisis of accidental fatal drug overdoses in Maryland.

Because of the veto, in Maryland, the tools which may be used to consume drugs will continue to be illegal to possess and use. This makes them scarcer and encourages people to share them with others, putting them at an elevated risk of contracting bloodborne illnesses and disease such as hepatitis and HIV.

Criminalization of paraphernalia is dangerous for all Marylanders, including those who do not use illicit substances, because it increases the likelihood that the public at large and law enforcement personnel can be directly harmed. Under continued paraphernalia criminalization, people who use drugs will continue to be reluctant to hold onto their supplies due to the fear that the police will use possession of these items as a means to search and arrest them.

With the threat of having to interact with law enforcement personnel, drug users are more likely to dispose of paraphernalia in public spaces. Paraphernalia criminalization laws also put law enforcement personnel at greater risk because they are more likely to be endangered by hidden supplies when interacting with or conducting a search of someone’s body or belongings.

Prohibitive drug paraphernalia laws are ostensibly intended to discourage both drug use and the availability of paraphernalia. Decades of the so-called War on Drugs has shown us that aggressive enforcement and criminalization of drug use have not reduced the rate of drug use in our society nor the availability of drug paraphernalia.

Meanwhile, the rates of infectious diseases and accidental fatal overdose deaths among drug users have surged. Last year, more than 93,000 Americans (including approximately 2,800 people in Maryland) died of accidental fatal drug overdoses.

Decriminalization or paraphernalia is rooted in the harm reduction principle of equipping people to use drugs more safely.

This is positive for everyone in the community—including law enforcement agents, by stemming the spread of infectious disease and lifting the stigma which so dangerously isolates people who use drugs.

By contrast, criminalization, and perceived suspicion of criminal activity—like illicit drug use—is far too often used as a means for law enforcement personnel to target historically marginalized groups, such as people living with mental illnesses and people who are surviving without access to housing. These folks are more likely to be suffering from substance use disorders, thereby placing them at extremely elevated risk of injury or death from drug use.

Criminalization, marginalization, isolation, injury and death are all part of a largely preventable cycle of harm. And criminalization is perhaps the only part of that cycle which can be meaningfully and quickly addressed by public policy and law.

The Maryland legislature understood this when they passed SB420 into law earlier this year. It is unfortunate that Gov. Hogan has failed to acknowledge this reality.

His statement on the veto demonstrates that he either lacks a sufficient understanding of the expertise of public health professionals and harm reduction advocates, or that his decision making on this issue has been clouded by outdated, misleading or simply false drug-warrior misinformation.

It is now up to the Maryland legislature to override his veto.

Maryland must be led down a path which has the greatest chances of success for reducing the risks associated with drug use for all Marylanders (including those who do not use illicit drugs) and stemming the tide of accidental fatal overdoses in Maryland which have reached catastrophic proportions.

This content was republished with permission from Maryland Matters.

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Pennsylvania’s Lieutenant Governor Wants To Process As Many Marijuana Pardons As Possible Before Leaving Office

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Pennsylvania’s Lieutenant Governor Wants To Process As Many Marijuana Pardons As Possible Before Leaving Office

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The lieutenant governor of Pennsylvania is stepping up his push to get marijuana records cleared, promoting an expedited petition program that he hopes will provide relief to thousands of people negatively impacted by prohibition.

In an interview with KDKA that aired last week, Lt. Gov. John Fetterman (D) said one of his key goals in his final year in office is to ensure that as many eligible people as possible submit applications to have the courts remove their cannabis records and restore opportunities to things like housing, student financial aid and employment.

“I’m a fervent believer in second chances. And one of the things I quickly discovered was that people’s lives were just being ruined by these silly charges, and you have all this unnecessary review [to seal records],” Fetterman, who chairs the state Board of Pardons, said.

“This is a plant that’s legal in many jurisdictions across America, and it’s not a big deal, but you go through your life in many cases a convicted felon, and that excludes you from a lot of opportunities,” he said. “So I developed an expedited review process that I encourage everybody to partake in.”

There are about 20,000 marijuana-related cases in Pennsylvania each year, he said. And some eligible cases go back decades, including one case that recently went through the petition process where a man had a felony conviction on his record for possession of eight ounces of cannabis that dates back to 1975.

“If you’ve got some stupid charge like that on your record, it doesn’t cost anything to apply, and we can get that off your your permanent record,” the lieutenant governor said. “I don’t care how conservative or how liberal you are politically. I don’t think we as a society should be really damaging people’s future for consuming a plant that is now legal in many jurisdictions—and soon will be in Pennsylvania.”

While both Fetterman and Gov. Tom Wolf (D) support mass expungements of cannabis convictions, he said that, right now, this is “the only way to free records.”

But the official is optimistic about the prospect of future reform to both legalize marijuana in the state and provide an even more effective process to get past convictions sealed. He pointed to a legalization bill that was recently filed by a Republican lawmaker as an example of the “evolution towards this” and described the legislation’s introduction as “a quantum leap in acknowledging it.”

For now, however, he’s doing what he can to raise awareness about the expedited petition program under the Pennsylvania Board of Pardons. People with non-violent marijuana convictions can apply for free on the board’s website.

“I’m lieutenant governor for a little over a year, and we want to get as many people free of these silly convictions and charges that are holding the record back,” Fetterman said. “The application doesn’t cost anything. You don’t need an attorney. And our turnaround time is, right now, down to three to four months.”

In May, Wolf pardoned a doctor who was arrested, prosecuted and jailed for growing marijuana that he used to provide relief for his dying wife. That marked his 96th pardon for people with cannabis convictions through the Expedited Review Program for Non-Violent Marijuana-Related Offenses.

Meanwhile in Pennsylvania, a lawmaker introduced a bill last month to expand the number of medical marijuana cultivators in the state, prioritizing small farms to break up what she characterized as a monopoly or large corporations that’s created supply problems.

Separately, bipartisan Pennsylvania senators said this month that they are introducing a bill to allow medical marijuana patients to cultivate their own plants for personal use.

A much-anticipated bipartisan Senate bill to legalize marijuana in Pennsylvania that has been months in the making was formally introduced last month.

Sens. Dan Laughlin (R) and Sharif Street (D) unveiled the nearly 240-page legislation months after first outlining some key details back in February. It would allow adults 21 and older to purchase and possess up to 30 grams of cannabis, five grams of marijuana concentrate products and 500 milligrams of THC contained in cannabis-infused products.

Meanwhile, Rep. Amen Brown (D) recently announced his intent to file a reform bill that he’ll be working on with Sen. Mike Regan (R), who expressed his support for the policy change a day earlier.

Additionally, a separate pair of state lawmakers—Reps. Jake Wheatley (D) and Dan Frankel (D)—formally unveiled a legalization bill they’re proposing.

While each measure generally seeks and end to marijuana criminalization by creating a regulated, commercial model for cannabis, there are some provisions that make each piece of legislation unique. For example, the proposals vary in how they would approach taxes, revenue and social equity.

While these recent moves to enact reform in the GOP-controlled legislature are encouraging to advocates, a spokesperson for House Majority Leader Kerry Benninghoff (R) recently tempered expectations, saying that there’s “no significant support for the legalization of recreational marijuana in the House Republican caucus.”

Fetterman, who is running for U.S. Senate, told Marijuana Moment in a recent phone interview that he’s optimistic about the prospects of reform with these latest proposals, though he acknowledged that there may be disputes between legislators over how tax revenue should be distributed.

Wolf, for his part, has said that a bipartisan approach to legalization “would be a great thing. I think the time is right.”

Philadelphia voters also approved a referendum on marijuana legalization this month that adds a section to the city charter saying that “the citizens of Philadelphia call upon the Pennsylvania General Assembly and the Governor to pass legislation that will decriminalize, regulate, and tax the use, and sale to adults aged 21 years or older, of cannabis for non-medical purposes.”

Wolf said earlier this year that marijuana legalization was a priority as he negotiated the annual budget with lawmakers. However, his formal spending request didn’t contain legislative language to actually accomplish the cannabis policy change.

The governor, who signed a medical cannabis expansion bill in June, has repeatedly called for legalization and pressured the Republican-controlled legislature to pursue the reform since coming out in favor of the policy in 2019. Shortly after he did that, a lawmaker filed a separate bill to legalize marijuana through a state-run model.

A survey from Franklin & Marshall College released this month found that 60 percent of Pennsylvania voters back adult-use legalization. That’s the highest level of support for the issue since the firm started polling people about it in 2006.

An attempt to provide protections for Pennsylvania medical marijuana patients from being charged with driving under the influence was derailed in the legislature last week, apparently due to pushback by the state police association.

Mexican Senators Circulate Draft Marijuana Legalization Bill, With Vote Expected Within Weeks

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Mexican Senators Circulate Draft Marijuana Legalization Bill, With Vote Expected Within Weeks

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A draft bill to legalize and regulate marijuana sales in Mexico is being circulated among senators, and a top lawmaker says the plan is to vote on the proposal before December 15.

While the legislation hasn’t been formally introduced yet, the draft measure largely reflects an earlier version the Senate passed late last year, with some revisions.

Senate Majority Leader Ricardo Monreal Avila of the ruling MORENA party has been pushing for the reform and recently said that there’s agreement among leading lawmakers to prioritize legislation to regulate cannabis.

The Mexican Supreme Court declared nearly three years ago that the country’s prohibition on the personal possession and cultivation of cannabis was unconstitutional. Lawmakers were then obligated to enact the policy change but have since been unable to reach a consensus on legislation to put in place regulations for a marijuana program.

At the request of legislators, the court agreed to extend its deadline for Congress to formally end prohibition on multiple occasions. But because of the repeated failed attempts to meet those deadlines, justices ultimately voted to end criminalization on their own in June.

Monreal previously said that the stage is set for lawmakers to actually pass a marijuana legalization bill during the new session after multiple attempts in recent years fell short of getting over the finish line.

Under the draft bill that’s currently being circulated, adults 18 and older would be allowed to purchase and possess up to 28 grams of marijuana and cultivate up to six plants for personal use.

Members of the Senate Health and Justice Committees were tapped to formulate the draft of a cannabis bill.

The text of the measure states that the purpose of the reform is to promote “public health, human rights and sustainable development” and to “improve the living conditions of the people who live in the United Mexican States.”

It would further “prevent and combat the consequences of problematic consumption of psychoactive cannabis and contribute to the reduction of the crime incidence linked to drug trafficking, promoting peace, security and individual and community well-being.”

Regulators would be tasked with developing separate rules to regulate cannabis for adult-use, research and industrial production.

The bill would establish a Mexican Institute for the Regulation and Control of Cannabis, which would be a decentralized body under the Ministry of Health. It would also be responsible for issuing licenses, overseeing the program and promoting public education campaigns around marijuana.

Retail licenses would need to be issued within 18 months of the enactment of the law.

In order to “compensate the damages generated by the prohibition,” the bill states that at least 40 percent of marijuana cultivation licenses would need to go to communities most impacted by cannabis criminalization for at least the first five years of implementation. After that point, at least 20 percent of licenses would need to be reserved for equity applicants.

After the Supreme Court independently invalidated prohibition earlier this year, advocates stressed that the decision underscores the need for legislators to expeditiously pass a measure to implement a comprehensive system of legal and regulated sales. They want to ensure that a market is established that’s equitable, addresses the harms of criminalization on certain communities and promotes personal freedom.

Advocates are pleased to see Senate leadership take seriously the need to establish regulations and provide access to cannabis for adults, but they have identified some provisions as problematic.

For example, possessing more than 200 grams of marijuana could still result in prison time.

Senate President Olga Sánchez Cordero, who previously served at a cabinet-level position in President Andrés Manuel López Obrador’s administration, recently said that “there is no longer room for the prohibitionist policy.” And she also says the influence of the U.S. is to blame for failed marijuana criminalization laws in her country.

The Senate approved a legalization bill late last year, and then the Chamber of Deputies made revisions and passed it in March, sending it back to the originating chamber. A couple of Senate committees then took up and cleared the amended measure, but leaders quickly started signaling that certain revisions made the proposal unworkable.

After the Chamber of Deputies previously approved the Senate-passed legalization bill, senators said that the revised proposal was critically internally conflicted—on provisions concerning legal possession limits, the definition of hemp and other issues—and lawmakers themselves could be subject to criminal liability if it went into effect as drafted.

But Monreal said in April that if the court were to make a declaration of unconstitutionality before a measure to regulate cannabis was approved, it would result in “chaos.”

The top senator also talked about the importance of lawmakers taking their time to craft good policy and not rush amidst lobbying from tobacco and pharmaceutical industry interests.

“We must not allow ourselves to be pressured by interests,” he said at the time. “The Senate must act with great prudence in this matter.”

Sen. Eduardo Ramírez Aguilar of the MORENA party said in April that “at this time, it is important to legislate in the terms that are presented to us” and then consider additional revisions to cannabis laws through subsequent bills.

That’s the position many legalization advocates took as well, urging lawmakers to pass an imperfect bill immediately and then work on fixing it later.

Mexico’s president said in December that a vote on legalization legislation was delayed due to minor “mistakes” in the proposal.

The legalization bill cleared a joint group of Senate committees prior to the full floor vote in that chamber last year, with some amendments being made after members informally considered and debated the proposal during a virtual hearing.

Members of the Senate’s Justice, Health, and Legislative Studies Committees had approved a prior version of legal cannabis legislation last year as well, but the pandemic delayed consideration of the issue. Sen. Julio Ramón Menchaca Salazar of the MORENA party said in April that legalizing cannabis could fill treasury coffers at a time when the economy is recovering from the health crisis.

As lawmakers work to advance the reform legislation, there’s been a more lighthearted push to focus attention on the issue by certain members and activists. That push has mostly involved planting and gifting marijuana.

Late last year, Sánchez Cordero, then a top administration official, was gifted a cannabis plant by senator on the Senate floor, and she said she’d be making it a part of her personal garden.

A different lawmaker gave Sánchez Cordero, a marijuana joint on the floor of the Chamber of Deputies in 2019. That joint is now framed and hangs in her office.

Cannabis made another appearance in the legislature last year, when Sen. Jesusa Rodríguez of the MORENA party decorated her desk with a marijuana plant.

Drug policy reform advocates have also been cultivating hundreds of marijuana plants in front of the Senate, putting pressure on legislators to make good on their pledge to advance legalization.

Read the draft marijuana legalization bill that’s being circulated in Mexico’s Senate below: 

Click to access texto-normativo-para-nueva-iniciativa-1.pdf

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