A top Maryland lawmaker on Friday pledged that lawmakers will pass a bill to put the question of marijuana legalization before voters as a referendum on the 2022 ballot. And she’s formed a cannabis working group to assess the best way to structure the reform.
House Speaker Adrienne Jones (D) said that while she has “personal concerns about encouraging marijuana use, particularly among children and young adults, the disparate criminal justice impact leads me to believe that the voters should have a say in the future of legalization.”
“The House will pass legislation early next year to put this question before the voters but we need to start looking at changes needed to State law now,” she said in a press release.
To that end, Jones has appointed a 10-member working group to study a range of issues related to legalizing and regulating cannabis.
Legalization legislation did begin to move through the legislature this session, but no votes were ultimately held.
The Senate Finance Committee held a hearing in March on a legalization bill sponsored by top lawmakers, including the body’s president, majority leader and key committee chairs. That followed a House Judiciary Committee hearing on a separate cannabis proposal in February.
“Eighteen states and the District of Columbia have already legalized recreational cannabis for adult-use. Maryland must do the same and a large majority of Marylanders in both political parties support an equitable framework that immediately addresses the injustices in our current criminal justice system,” Senate President Bill Ferguson (D) said in reaction to Jones’s announcement on Friday.
“In 2019, I co-chaired the General Assembly’s workgroup to study this issue and we identified the key decision points and models for legalization in Maryland,” he added. “The Senate continues to be ready to move a fair, just, and equitable program forward, and we intend to do so during the 2022 session.”
Del. Jazz Lewis (D), who sponsored the legalization bill in his chamber this year, praised the speaker’s move to advance the issue.
“As I have said many times, legalization must be grounded in equity and restorative justice,” he said. “I’ll continue to fight for just that!”
I commend Speaker Jones for putting together a workgroup to review legislation on legalizing cannabis. As I have said many times, legalization must be grounded in equity and restorative justice. I'll continue to fight for just that!
— Delegate Jazz Lewis (@JazzforMaryland) July 16, 2021
Lawmakers had worked to reconcile the differences between the House and Senate proposals in the hopes of getting something to the desk of Gov. Larry Hogan (R), who has not endorsed legalization but has signaled he may be open to considering the idea.
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The effort to end prohibition might not have panned out this session, but now the speaker seems to be setting the stage for a policy change next year.
The working group she’s convened—which includes House Majority Leader Eric Luedtke (D), Minority Leader Jason Buckel (R), Legislative Black Caucus Chair Darryl Barnes (D) and other top lawmakers—will study a wide range of cannabis policy issues before the referendum bill is formally introduced.
I strongly support @SpeakerAJones's proposal to put a question on the ballot in 2022 to legalize recreational #cannabis in Maryland.
And I'm honored to serve on the House work group looking at the details of legalization.
— Delegate Eric Luedtke (@EricLuedtke) July 16, 2021
Luedtke said it remains to be seen what the legalization ballot question will ultimately look like, but “but many of us will be arguing for broad expungement and for efforts to ameliorate past harms, especially to communities of color.”
tbd what the ballot language would look like, but many of us will be arguing for broad expungement and for efforts to ameliorate past harms, especially to communities of color.
— Delegate Eric Luedtke (@EricLuedtke) July 16, 2021
The panel will consider licensing rules, tax structures, social equity and expanded access to substance misuse treatment.
The press release says that the group will begin to meet this fall.
As Maryland lawmakers considered the two marijuana legalization bills this past session, a poll found that the state’s residents are on board with the policy change. Two-thirds (67 percent) of Marylanders now back legalizing cannabis, according to a Goucher College survey. Just 28 percent are opposed.
Pressure to enact the reform is also building regionally. Marijuana legalization took effect in Virginia at the beginning of this month, for example.
In Maryland, Democratic gubernatorial candidates—former state Attorney General Doug Gansler and former U.S. Secretary of Education John King—have also voiced support for legalization in recent weeks.
Legalizing cannabis is only step one.
We must also ensure that businesses led by folks of color and women are able to fairly participate in licensing and sales.
— John King (@JohnBKing) July 13, 2021
“Black Marylanders are nearly twice as likely as white Marylanders to be arrested for cannabis despite using it at the same rate,” King said. “It’s time to legalize it and expunge records for non-violent offenders.”
Black Marylanders are nearly twice as likely as white Marylanders to be arrested for cannabis despite using it at the same rate.
It’s time to legalize it and expunge records for non-violent offenders.
— John King (@JohnBKing) July 12, 2021
Gansler reacted to New Mexico’s decision to legalize cannabis and described it as “the rational, practical, and fiscally responsible thing” to do.
Yet another state has done the rational, practical, and fiscally responsible thing and legalized cannabis. Maryland should be next. https://t.co/lRWZV3gZzF
— Doug Gansler (@DougGansler) June 30, 2021
“Maryland should be next,” he said.
Gansler also called out the consequences of prohibition, saying it can derail people’s lives and damages trust between communities and law enforcement.
The consequences of a simple marijuana possession conviction can derail someone's life, closing the door to jobs and more. That is why we need to legalize cannabis in Maryland and establish a comprehensive system to expunge possession records.
— Doug Gansler (@DougGansler) June 18, 2021
For law enforcement to be their most effective, they must build and maintain the trust of their communities. Cannabis regulation would free up police resources, so they can focus on more serious crimes and help strengthen community relationships, to keep all of our families safe.
— Doug Gansler (@DougGansler) June 21, 2021
“Maryland is now lagging behind its neighbors in Virginia and D.C. on cannabis policy, and it is long past due that the state move forward with equitable legalization,” Olivia Naugle, a legislative analysis with the Marijuana Policy Project, told Marijuana Moment. “Marylanders strongly support legalization, so it is encouraging to see the speaker commit to referring legalization to voters next year.”
Maryland legalized medical marijuana through an act of the legislature in 2012. Two years later, a decriminalization law took effect that replaced criminal penalties for possession of less than 10 grams with a civil fine of $100 to $500. Since then, however, a number of efforts to further marijuana reform have fallen short.
A bill last year to expand the decriminalization possession threshold to an ounce passed the House last year but was never taken up in the Senate.
In May, the governor vetoed a bill that would have shielded people with low-level cannabis convictions from having their records publicized on a state database. In a veto statement, he said it was because lawmakers failed to pass a separate, non-cannabis measure aimed at addressing violent crime.
In 2017, Hogan declined to respond to a question about whether voters should be able to decide the issue, but by mid-2018 he had signed a bill to expand the state’s medical marijuana system and said full legalization was worth considering: “At this point, I think it’s worth taking a look at,” he said at the time.
As for Maryland lawmakers, a House committee in 2019 held hearings on two bills that would have legalized marijuana. While those proposals didn’t pass, they encouraged many hesitant lawmakers to begin seriously considering the change.
Read the speaker’s full announcement about the marijuana plan below:
SPEAKER JONES ANNOUNCES CANNABIS REFERENDUM AND WORKGROUP
ANNAPOLIS, MD – Today, Speaker of the House Adrienne A. Jones announced support for a referendum to legalize cannabis on the 2022 General Election ballot.
“While I have personal concerns about encouraging marijuana use, particularly among children and young adults, the disparate criminal justice impact leads me to believe that the voters should have a say in the future of legalization,” said Speaker Jones. “The House will pass legislation early next year to put this question before the voters but we need to start looking at changes needed to State law now.”
Speaker Jones also announced the creation of a Cannabis Workgroup to craft the implementation of a legalized cannabis program in Maryland, should the voters approve the ballot question in November of 2022.
House Judiciary Chairman Luke Clippinger will chair the Workgroup.
“Cannabis use has had a disparate impact on people of color for too long with no real impact on public safety,” said Chairman Clippinger. “This Workgroup will establish the legal frameworks necessarily to fully implement legalization of marijuana and learn from the mistakes that other states have made before us. The Speaker has been clear that we will do this with an eye toward equity and consideration to Black and brown neighborhoods and businesses historically impacted by cannabis use.”
The Workgroup will:
- Determine the regulatory, licensing and oversight structure of the production, sale and possession of legalized cannabis, including licensing application process, number of licenses, and equity in ownership of marijuana facilities
- Address expungement of previous convictions for cannabis and determine changes to existing criminal laws related to cannabis
- Identify the structure for potential release of those convicted solely of marijuana-related crimes , as well as dismissal of pending marijuana charges
- Review existing criminal and traffic laws related to marijuana including paraphernalia and cannabis accessories
- Structure equitable ownership in cannabis-related businesses
- Construct social equity programs to compensate communities impacted by over-incarceration for marijuana-related crimes
- Craft a taxation structure and revenue distribution from cannabis proceeds
- Expand addiction treatment programs and healthcare support for substance abuse
- Determine the impact to medical cannabis programs, other collateral rights and licenses
The Speaker appointed the following members of the Workgroup, as well as chairs of the subcommittees of the Workgroup:
- Majority Leader Eric Luedtke, who will chair Cannabis Taxation Subcommittee
- Minority Leader Jason Buckel
- Vice Chair Joseline Pena-Melnyk, who will chair Health Determinants Subcommittee
- Vice Chair Kathleen Dumais
- Legislative Black Caucus Chair Darryl Barnes
- Delegate C.T. Wilson, who will chair the Business Implementation Subcommittee
- Delegate David Moon, who will chair Criminal Justice Impacts Subcommittee
- Delegate Nicole Williams
- Delegate Robin Grammer
- Delegate Nic Kipke
The Workgroup will begin meeting this fall. All meetings will be livestreamed through the Maryland General Assembly website.
# # # # # #
Photo courtesy of Max Pixel.
Top IRS Official Says Marijuana Banking Reform Would Help Feds ‘Get Paid’
The Internal Revenue Service (IRS) would like to get paid—and it’d help if the marijuana industry had access to banks like companies in other legal markets, an official with the federal department said. She also talked about unique issues related to federal tax deductions for cannabis businesses.
At an event hosted by UCLA’s Annual Tax Controversy Institute on Thursday, IRS’s Cassidy Collins talked about the “special type of collection challenge” that the agency faces when it comes to working with cannabis businesses while the product remains federally illegal.
While IRS isn’t taking a stand on federal marijuana policy, Collins said that the status quo leaves many cannabis businesses operating on a cash-only basis, creating complications for the agency, in part by making it harder for banks to “pay us.”
“The reason why [the marijuana industry is] cash intensive is twofold,” she said. “Number one, a lot of customers don’t want a paper trail showing that they’re buying marijuana, and number two, the hesitancy of banks to allow marijuana businesses to even bank with them.”
Of course, the reason why many financial institutions remain hesitant to take on cannabis companies as clients is because the plant is a strictly controlled substance under federal law.
“There’s been a number of legislative bills that have been introduced—and I am definitely not expressing any opinion personally or on behalf of the IRS about any pending or proposed legislation,” Collins, who is a senior counsel in the IRS Office of Chief Counsel, said. “But it is interesting to note that, if the law changed so that the marijuana businesses could have banks, that would make the IRS’s job to collect [taxes] a lot easier. As part of collection, we want the money. That’s our end goal there.”
A major part of what makes cannabis businesses unique is that they don’t qualify for traditional tax credits under an IRS code known as 280E. That policy “prohibits them from claiming deductions for business expenses because they’re technically being involved in drug trafficking,” Collins explained at the event, from which small excerpts of her comments were reported by Bloomberg.
There are some options available to lessen the burden on marijuana firms, however. At the end of the day, “IRS will work with marijuana companies because, again, we want to get paid,” Collins said.
One of the ways the agency works with marijuana business operators is to have them visit designated IRS “tax assistance centers” that accept cash payments in excess of $50,000. But the official warned businesses to “be prepared to be there for a little while” as the center checks—and double checks—the amount of cash being submitted.
“Revenue officers will assist the marijuana companies in paying us,” she said.
IRS officials could also help cannabis firms by having officials accompany them “to the bank in order to try to help the taxpayer secure a cashier’s payment to pay the IRS, as well as using money orders,” she said, adding that “our revenue officers are are wanting to work with the marijuana companies to help assist them to pay us.”
“When the revenue officers are there in person with the taxpayer, that could potentially help increase the likelihood that the bank will cooperate and help the taxpayer transition into a cashier’s check,” she continued. “And that has been a trend since this first became legal [at the state level], that more and more banks are allowing cannabis companies to bank with them.”
In a report published earlier this year, congressional researchers examined tax policies and restrictions for the marijuana industry—and how those could change if any number of federal reform bills are enacted.
IRS, for its part, said last month that it expects the cannabis market to continue to grow, and it offered some tips to businesses on staying compliant with taxes while the plant remains federally prohibited.
As it stands, banks and credit unions are operating under 2014 guidance from the Financial Crimes Enforcement Network (FinCEN) that lays out reporting requirements for those that choose to service the marijuana industry.
Leaders in both chambers of Congress are working on legalization bills to end federal marijuana prohibition. But stakeholders are hopeful that, in the interim, legislators will enact modest marijuana banking reform. Legislation to protect financial institutions from being penalized for working with cannabis businesses passed the House for the fifth time last month.
Rodney Hood, a board member of the National Credit Union Administration, wrote in a Marijuana Moment op-ed this month that legalization is an inevitability—and it makes the most sense for government agencies to get ahead of the policy change to resolve banking complications.
IRS separately hosted a forum in August dedicated to tax policy for marijuana businesses and cryptocurrency.
Earlier this year, IRS Commissioner Charles Rettig told Congress that the agency would “prefer” for state-legal marijuana businesses to be able to pay taxes electronically, as the current largely cash-based system under federal cannabis prohibition is onerous and presents risks to workers.
Former Treasury Secretary Steven Mnuchin said in 2019 that he’d like to see Congress approve legislation resolving the cannabis banking issue and he pointed to the fact that IRS has had to build “cash rooms” to deposit taxes from those businesses as an example of the problem.
IRS released updated guidance on tax policy for the marijuana industry last year, including instructions on how cannabis businesses that don’t have access to bank accounts can pay their tax bills using large amounts of cash.
The update appears to be responsive to a Treasury Department internal watchdog report that was released earlier in the year. The department’s inspector general for tax administration had criticized IRS for failing to adequately advise taxpayers in the marijuana industry about compliance with federal tax laws. And it directed the agency to “develop and publicize guidance specific to the marijuana industry.”
Luxembourg Set To Become First European Country To Legalize Marijuana Following Government Recommendation
Luxembourg is poised to become the first European country to legalize marijuana, with key government agencies putting forward a plan to allow the possession and cultivation of cannabis for personal use.
The ministers of justice and homeland security on Friday unveiled the proposal, which will still require a vote in the Parliament but is expected to pass. It’s part of a broader package of reform measures the agencies are recommending.
Under the marijuana measure, adults 18 and older could grow up to four plants. However, under the non-commercial model that is being proposed, possessing more than three grams in public would still be a civil offense, carrying a fine of €25-500 ($29-581). Currently, the maximum fine for possession is €2,500 ($2,908).
In terms of access, adults would be able to buy and trade cannabis seeds for their home garden.
Justice Minister Sam Tamson said the government felt it “had to act” and characterized the home cultivation policy change as a first step, The Guardian reported.
👉🏻élaboration du projet de loi usage privé du #cannabis : jusqu’à 4 plantes à domicile & décorrectionnalisation <3g
👉🏻renforcement de la prévention & de l’accompagnement
👉🏻⬆️des moyens de la police
👉🏻élaboration d’un projet de production/vente #Luxembourg pic.twitter.com/8yre0Udt8J
— Sam Tanson (@SamTanson) October 22, 2021
“The idea is that a consumer is not in an illegal situation if he consumes cannabis and that we don’t support the whole illegal chain from production to transportation to selling where there is a lot of misery attached,” he said. “We want to do everything we can to get more and more away from the illegal black market.”
While limited in scope, the reform would make Luxembourg the first country in Europe to legalize the production and possession of marijuana for recreational use. Cannabis has been widely decriminalized in certain countries in the continent, but it has remained criminalized by statute.
Government sources in Luxembourg told The Guardian that plans are in the works to develop a program where the state regulates the production and distribution of marijuana. Tamson said they are working to resolve “international constraints” before taking that step, however, referring to United Nations treaty obligations that multiple U.S. states and other countries like Canada and Uruguay have openly flouted.
The measures include:
🟢 Regulation of cannabis use and cultivation: adults will be able to legally cultivate up to four cannabis plants for their own use, provided the cultivation is happening at their place of residence.
— European Greens (@europeangreens) October 22, 2021
For now, the country is focusing on legalization within a home setting. Parliament is expected to vote on the proposal in early 2022, and the ruling parties are friendly to the reform.
This has been a long time coming, as a coalition of major parties of Luxembourg agreed in 2018 to enact legislation allowing “the exemption from punishment or even legalization” of cannabis.
Meanwhile in the U.S., congressional lawmakers are working to advance legalization legislation. A key House committee recently approved a bill to end marijuana prohibition, and Senate leadership is finalizing a separate reform proposal.
In Mexico, a top Senator said this week that lawmakers could advance legislation to regulate marijuana in the coming weeks. The Supreme Court has already ruled that adults cannot be criminalized over possession or cultivation, but there’s currently no program in place to provide access.
Photo courtesy of Mike Latimer.
New Bipartisan Marijuana Research Bill In Congress Would Let Scientists Study Dispensary Products
A bipartisan group of federal lawmakers introduced a bill on Thursday to remove barriers to conducting research on marijuana, including by allowing scientists to access cannabis from state-legal dispensaries.
The Medical Marijuana Research Act, filed by the unlikely duo of pro-legalization Rep. Earl Blumenauer (D-OR) and prohibitionist Rep. Andy Harris (R-MD), would streamline the process for researchers to apply and get approved to study cannabis and set clear deadlines on federal agencies to act on their applications.
“Congress is hopelessly behind the American people on cannabis, and the quality of our research shows why that is an urgent problem,” Blumenauer told Marijuana Moment. “Despite the fact that 99 percent of Americans live in a state that has legalized some form of cannabis, federal law is still hamstringing researchers’ ability to study the full range of health benefits offered by cannabis, and to learn more about the products readily available to consumers.”
“It’s outrageous that we are outsourcing leadership in that research to Israel, the United Kingdom, Canada, and others. It’s time to change the system,” he said.
Late last year, the House approved an identical version of the cannabis science legislation. Days later, the Senate passed a similar bill but nothing ended up getting to the president’s desk by the end of the last Congress. Earlier this year, a bipartisan group of senators refiled their marijuana research measure for the current 117th Congress.
Meanwhile, lawmakers are also advancing a separate strategy to open up dispensary cannabis to researchers. Large-scale infrastructure legislation that has passed both chambers in differing forms and which is pending final action contains provisions aimed at allowing researchers to study the actual marijuana that consumers are purchasing from state-legal businesses instead of having to use only government-grown cannabis.
The new bill filed this week by Blumenauer and Harris, along with six other original cosponsors, would also make it easier for scientists to modify their research protocols without having to seek federal approval.
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It would additionally mandate that the Drug Enforcement Administration (DEA) license more growers and make it so there would be no limit on the number of additional entities that can be registered to cultivate marijuana for research purposes. It would also require the U.S. Department of Health and Human Services (HHS) to submit a report to Congress within five years after enactment to overview the results of federal cannabis studies and recommend whether they warrant marijuana’s rescheduling under federal law.
“The cannabis laws in this country are broken, including our laws that govern cannabis research,” Blumenauer said in remarks in the Congressional Record. “Because cannabis is a Schedule I substance, researchers must jump through hoops and comply with onerous requirements just to do basic research on the medical potential of the plant.”
The new legislation will “both streamline the often-duplicative licensure process for researchers seeking to conduct cannabis research and facilitate access to an increased supply of higher quality medical grade cannabis for research purposes,” he said, adding that expanded studies will help make sure “Americans have adequate access to potentially transformative medicines and treatments.”
For half a century, researchers have only been able to study marijuana grown at a single federally approved facility at the University of Mississippi, but they have complained that it is difficult to obtain the product and that it is of low quality. Indeed, one study showed that the government cannabis is more similar to hemp than to the marijuana that consumers actually use in the real world.
There’s been bipartisan agreement that DEA has inhibited cannabis research by being slow to follow through on approving additional marijuana manufacturers beyond the Mississippi operation, despite earlier pledges to do so.
In May, the agency finally said it was ready to begin licensing new cannabis cultivators. Last week, DEA proposed a large increase in the amount of marijuana—and psychedelics such as psilocybin, LSD, MDMA and mescaline—that it wants produced in the U.S. for research purposes next year.
Under the new House bill, the agency would be forced to start approving additional cultivation applications for study purposes within one year of the legislation’s enactment.
HHS and the attorney general would be required under the bill to create a process for marijuana manufacturers and distributors to supply researchers with cannabis from dispensaries. They would have one year after enactment to develop that procedure, and would have to start meeting to work on it within 60 days of the bill’s passage.
In general, the legislation would also establish a simplified registration process for researchers interested in studying cannabis, in part by reducing approval wait times, minimizing costly security requirements and eliminating additional layers of protocol review.
Read the full text of the new marijuana research bill below: