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Treasury Department Issues Updated Guidance On Hemp Banking Rules

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Federal financial regulators on Monday released updated guidance for banks and credit unions that service hemp businesses.

The Financial Crimes Enforcement Network (FinCEN), which is part of the Treasury Department, said that the update is meant to expand on earlier guidance the agency provided following the federal legalization of hemp under the 2018 Farm Bill. The new memo explains changes in reporting requirements and emphasizes that because the crop is no longer a controlled substance, financial institutions don’t have to automatically flag transactions that are from hemp business accounts.

“This guidance explains how financial institutions can conduct due diligence for hemp-related businesses, and identifies the type of information and documentation financial institutions can collect from hemp-related businesses to comply with [Bank Secrecy Act] regulatory requirements,” FinCEN wrote. “This clarification is intended to enhance the availability of financial services for, and the financial transparency of, hemp-related businesses in compliance with federal law.”

They also emphasized that the notice does not “replace or supersede FinCEN’s previous guidance” on banking for marijuana businesses that was implemented under the Obama administration in 2014.

Unlike for marijuana companies, banks and credit unions do not have to automatically file suspicious activity reports, or SARs, solely because a business client is involved in the hemp market. They must still be filed for marijuana-related businesses, however.

FinCEN did say in the new document that there are circumstances where reporting would be warranted for hemp companies. It outlined four examples:

1. If a customer appears to be involved in marketing hemp in a state or territory where it remains illegal.

2. If a customer “appears to be using a state-licensed hemp business as a front or pretext to launder money derived from other criminal activity or derived from marijuana-related activity that may not be permitted under applicable law.”

3. If a customer seems to be involved in the hemp market in order to “conceal or disguise involvement in marijuana-related business activity.”

4. If a customer is “unable or unwilling to certify or provide sufficient information to demonstrate that it is duly licensed and operating consistent with applicable law.”

The regulatory agency also provided clarification on requirements for businesses that are involved in marketing both hemp and marijuana.

FinCEN said that “if the proceeds of the businesses are kept separate, or the customer and its financial institution are able to identify which proceeds are marijuana-related and which are hemp-related, then the 2014 Marijuana Guidance, including specific SAR filing, applies only to the marijuana-related part of the business.”

“FinCEN expects financial institutions to monitor the transactions of hemp-related businesses for signs of suspicious or unlawful activity, just as with other customers,” the notice states. “To the extent the financial transactions of a hemp-related business are comingled with marijuana-related activities, a financial institution should apply FinCEN’s 2014 Marijuana Guidance, which provides clarity on how to file SARs on marijuana-related activities.”

This FinCEN guidance comes days after the agency released its latest update on the number of financial institutions that are servicing cannabis-related businesses. It showed a slight decline in the number of banks and credit unions that are taking on marijuana clients since the last quarter.

Also this month, the National Credit Union Administration issued a memo explaining issues related to providing financial services to hemp businesses. The federal agency listed 17 questions and answers about banking hemp businesses that credit unions are likely to have. That includes information about the status of the USDA’s interim final rule, compliance for hemp production, NCUA rules for serving the industry and more.

Bipartisan Senators File Marijuana And CBD Research Amendment To Defense Spending Bill

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Marijuana Legalization Could Curb Opioid Crisis In West Virginia, Governor Says

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If West Virginia lawmakers send a bill to legalize marijuana to his desk, he will sign it, Gov. Jim Justice (R) said on Tuesday.

While he might not be personally in favor of adult-use legalization, he said in response to a question during a town hall event that he’s heard from members of the medical community who feel that regulating cannabis sales could actually reduce “drug-type problems” like the opioid overdose epidemic, which has hit his state especially hard.

“I’ll just tell it like it is, I’m not educated enough to make a really good assessment as of yet,” he said. “But I can tell you just this: I do believe that that is coming, and the wave is coming across all of our states, and as that wave comes, if our House Republicans and Democrats and Senate Republicans and Democrats would get behind that effort from a standpoint of legalization of recreational marijuana and they would be supportive of that, I would too.”

Watch the governor respond to the marijuana legalization question below: 

The governor’s point about the broad public health impacts of legalization is substantiated in a growing body of scientific literature that’s found that increasing legal access to cannabis—which has been shown to effectively treat conditions such as chronic pain with minimal side effects—leads to fewer opioid prescriptions and overdose deaths.

Tuesday’s town hall wasn’t specifically about marijuana, however; rather, it centered on the state’s push to eliminate the income tax. On that note, House Majority Whip Paul Espinosa (R) recently circulated an internal poll among Republican lawmakers, inquiring about what kind of policies—including marijuana legalization—they’d be willing to support to make up revenue for the state as part of the plan to gut the income tax.

When asked about legalization as a means to raise tax revenue that could theoretically be used to get ride of the income tax, Justice said he’s principally opposed to broad reform but “I’m weakening on that position” because while his instinct is to reject regulating marijuana amid the state’s drug crisis, the medical community has shifted his perspective.

Experts “tell me that really and truly the legalizing of marijuana in certain areas or certain states that have that, from a recreational standpoint, have lowered their drug-type problems,” he said.

“If we could bucket the proceeds [from cannabis tax revenue] and use them in a way, just like this personal income tax reduction…in a really beneficial way for all our people,” he would be supportive of that.


Marijuana Moment is already tracking more than 700 cannabis, psychedelics and drug policy bills in state legislatures and Congress this year. Patreon supporters pledging at least $25/month get access to our interactive maps, charts and hearing calendar so they don’t miss any developments.

Learn more about our marijuana bill tracker and become a supporter on Patreon to get access.

West Virginia approved medical cannabis legalization in 2017, which Justice signed into law, and patients were just recently approved to start registering for the program. That said, the state must still partner with a testing laboratory before marijuana products are made available.

Two Democratic candidates who lost their bids for West Virginia House seats last year had pledged to introduce legislation to legalize marijuana in the state if they were elected.

Chuck Schumer Says Federal Marijuana Legalization Is A Priority In Democrats’ ‘Big, Bold Agenda’

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Mississippi House Replaces Senate’s Alternate Medical Marijuana Program With What Voters Originally Approved

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“The people have spoken, with a constitutional amendment about medical marijuana, and that bill went against the spirit of what the people decided.”

By Geoff Pender, Mississippi Today

A House panel on Tuesday gutted a Senate medical marijuana proposal and inserted the medical marijuana language voters passed as a constitutional amendment in November.

“I’m interested in seeing that bill die—I think it just did die,” said Rep. Robert Johnson III, House minority leader. “The people have spoken, with a constitutional amendment about medical marijuana, and that bill went against the spirit of what the people decided.”

Johnson made those statements about Senate Bill 2765 on Tuesday afternoon, when it appeared the bill had died, with no Ways and Means Committee meeting called on the floor for the afternoon to take the bill up. Later, Ways and Means had a meeting and took the bill up, then struck the Senate language and inserted Initiative 65. It now goes to the full House and if passed, back to the Senate in its amended form.

Rep. Joel Bomgar, R-Madison, who helped lead, and fund, the successful citizen initiative to enshrine medical marijuana use in the state constitution, offered the amendment to replace the Senate bill language with Initiative 65’s language.

Senate Bill 2765 was originally a legislative alternative to the medical marijuana program voters overwhelmingly approved in November with Ballot Initiative 65, which is now being challenged in the state Supreme Court. The bill passed the Senate only after much wrangling and a “do-over” vote in the wee hours of the morning in mid-February. It was initially drafted to create its own medical marijuana program, regardless of whether the court upholds the voter-passed program. But it was amended during heated Senate debate to take effect only if the courts strike down the voter-passed program.

The legislative move had many Initiative 65 supporters crying foul, claiming the Legislature was trying to usurp the will of the voters. After lawmakers failed for years to approve use of medical marijuana despite a groundswell of public support, voters took matters in hand in November with Initiative 65.

Jessica Rice, director of the Mississippi Cannabis Trade Association was among many watching the legislative alternative marijuana bill with skepticism and trepidation. She questioned whether lawmakers were truly trying to provide a backstop in case courts strike down Initiative 65. If so, she said, they would codify Initiative 65 — as the House panel did — not come up with a proposal with higher taxes and more or different regulations as in the Senate version.

“Our position is that the people have already had an option to vote on a legislative created program, and they chose not to,” Rice said last week. “Just because this is up before the Supreme Court does not give the Legislature a second bite at the apple … I think this is about control — they want to be able to be in control of the program, but people have already rejected that.”

But many state leaders and lawmakers had lamented that Initiative 65 was drafted to favor the marijuana industry and is just short of legalized recreational use. It puts the Mississippi State Department of Health in charge of the program, with no oversight by elected officials. It also prevents standard taxation of the marijuana, and any fees collected by the health department can only be used to run and expand the marijuana program, not go into state taxpayer coffers. The measure allows little regulation by local governments, no limits on the number of dispensaries and otherwise leaves many specifics … unspecified.

The Senate proposal would have taxed medical marijuana, with a 4 percent excise at cultivation, and with a 7 percent sales tax patients would pay, which was originally 10 percent in earlier drafts of the bill. Most of the taxes collected would have gone to education, including early learning and college scholarships. And the Departments of Agriculture and Revenue would be in charge.

The bill also would have imposed large licensing fees on growers and dispensary shop owners. Originally, those fees would have been $100,000 for growers and $20,000 for dispensaries. Those were reduced to $15,000 and $5,000, respectively, on Thursday night. Other changes were made in an effort to assuage those who believed such fees would keep small businesses and farms out of the game.

The bill barely gained the three-fifths vote it needed to pass the Senate. It faced a Tuesday deadline for the Ways and Means Committee to pass it on to the full House. Ways and Means Chairman Trey Lamar had said late Tuesday he was still undecided on what to do with the bill.

He noted the Ways and Means meeting late Tuesday was not announced on the House floor, as is standard procedure.

“No, it wasn’t announced,” Lamar said. “We just added it to the schedule. I know that’s not the usual way we do it, but I wasn’t there to announce it on the floor.”

This left many believing the bill had died on deadline without a vote Tuesday—apparently, including House Speaker Philip Gunn.

Gunn said: “The issue, or the challenge here is that the people voted on it in November, and they spoke pretty strongly… I know there is a lawsuit, but that can be dealt with later if we need to. If the Supreme Court throws out that vote, then the Legislature can come back and deal with it. If they uphold it, well then I don’t know what the Legislature would have to do with it then.”

This story was first published by Mississippi Today.

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Mexican Lawmakers To Vote On Marijuana Legalization Next Week

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A long-awaited floor vote on a proposal to legalize marijuana in Mexico is being scheduled in the Chamber of Deputies for next week, a move that comes months after the Senate approved the reform.

That said, lawmakers say there is still no formal revised bill for deputies to take up, and it will have to move through the committee process before being potentially returned to the Senate.

Martha Tagle MartĂ­nez, a member of the chamber’s Health Committee, said on Tuesday that several groups have reached out to her after receiving what appeared to be a draft legislation to regulate cannabis. She clarified that “there is still no formal or definitive document.”

The Political Coordination Board, which is established by party leaders to reach consensus on legislative issues, has set floor action for March 9. “But there is still no draft opinion,” MartĂ­nez said. When there is a bill, it will go to the Health and Justice Committees.

Those panels will “analyze, discuss, modify and approve the draft opinion” before sending it to the floor.

While it remains to be seen what changes will be made from the Senate version, MartĂ­nez said that the current bill as approved in the other chamber does not fulfill the requirements of the Supreme Court, which deemed the prohibition on personal possession and cultivation of marijuana unconstitutional in a 2018 ruling. Lawmakers have since been tasked with ending criminalization, but they’ve repeatedly pushed back deadlines to enact the policy change.

Now the legislature has until the end of April to legalize cannabis nationwide, and it seems next week’s action will set the stage for Congress to make good on its obligation.

In the meantime, the Health Committee already held a preliminary discussion on the issue last month.

Members of the panel said they wanted to hold four sessions to debate the legislation, but its president, Carmen Medel Palma, has yet to convene them and wants to speed up the process, La Jornada reported.

The Justice Committee also met to discuss the matter on Sunday, according to the group Cáñamo México.

The two panels were initially expected to send a revised legalization proposal to the floor last month, but that didn’t happen.

President Andres Manuel Lopez Obrador, for his part, said in December that a vote on legalization legislation was delayed due to minor “mistakes” in the proposal.

He said “there was no time to conduct a review” in the legislature before the prior December 15 Supreme Court deadline, but he noted that issues that need to be resolved are “matters of form” and “not of substance.”

The Senate passed the legalization bill in November and transmitted it to the Chamber of Deputies. Several committees took up the bill, with the Human Rights and Budget and Public Account Committees representing one panel that considered and advanced it just before the the court granted lawmakers’ latest deadline extension request.

While advocates are eager for lawmakers to formally end prohibition, they hoped the delay would give them more time to try to convince the legislature to address their concerns about certain provisions of the current bill, namely the limited nature of its social equity components and strict penalties for violating rules.

In response to unofficial drafts of the legalization measure that were obtained by advocacy groups, RegulaciĂłn Por La Paz said the proposals “give way to a regulation designed as a way for the great national and international capital, at the cost of the criminalization of users” and that the draft legislation “prioritizes the interests of the industry over rights and needs of the Mexican citizenship.”

“The worst they propose [is] a registry for self cultivators,” Mariana Sevilla of RegulaciĂłn Por La Paz told Marijuana Moment, adding that she also concerned about the inclusion of vertical integration for cannabis businesses.

Activists also want to increase the percentage of licenses granted to people harmed by prohibition.

“To avoid the formation of corporate oligopolies and promote a horizontal and inclusive market that encourages dignified participation and fair conditions for communities in vulnerable situations, it is essential to incorporate a perspective of social justice,” Zara Snapp of the Instituto RIA and #RegulacionPorLaPaz wrote in an op-ed coauthored by ReverdeSer Colectivo Coordinator Amaya Ordorika Imaz.

The legalization bill cleared a joint group of Senate committees prior to the full floor vote in that chamber, 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 March, but the coronavirus pandemic delayed consideration of the issue.

In general, the Senate bill would establish a regulated cannabis market, allowing adults 18 and older to purchase and possess up to 28 grams of marijuana and cultivate up to six plants for personal use.

The legislation makes some attempts to mitigate the influence of large marijuana corporations. For example, it states that for the first five years after implementation, at least 40 percent of cannabis business licenses must be granted to those from indigenous, low-income or historically marginalized communities.

The Mexican Institute of Cannabis would be responsible for regulating the market and issuing licenses.

Public consumption of marijuana would be allowed, except in places where tobacco use is prohibited or at mass gatherings where people under 18 could be exposed.

Households where more than one adult lives would be limited to cultivating a maximum of eight plants. The legislation also says people “should not” consume cannabis in homes where there are underaged individuals. Possession of more than 28 grams but fewer than 200 grams would be considered an infraction punishable by a fine but no jail time.

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 pandemic.

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.

In September, 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 the same official, Interior Ministry Secretary Olga Sánchez Cordero, a marijuana joint on the floor of the Chamber of Deputies in 2019.

Cannabis made another appearance in the legislature in August, 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.

Chuck Schumer Says Federal Marijuana Legalization Is A Priority In Democrats’ ‘Big, Bold Agenda’

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