The head of the U.S. Treasury Department said on Tuesday that there is no regulatory solution to existing banking access issues for the marijuana industry, and he encouraged Congress to resolve the problem with legislation “on a bipartisan basis.”
During a House appropriations subcommittee hearing, several lawmakers asked Treasury Secretary Steven Mnuchin about what could be done to provide state-legal cannabis businesses with access to financial institutions.
The Trump administration official agreed that it was a problem, noting that the Internal Revenue Service (IRS) has had to build “cash rooms” for taxes paid by marijuana companies, but he said the matter was outside the Treasury’s jurisdiction.
“Let me just say, I hope this is something that this committee can on a bipartisan basis work with since there are people on both sides of the aisle that share these concerns,” Mnuchin told Rep. Charlie Crist (D-FL). “I will just say I don’t believe this is a failure of the regulators. I want to defend the regulators on this issue.”
“The problem is there is a conflict between the federal law and the state law, and I’m not making a policy comment on what the right outcome is, but I, too, share your concern,” he said.
Calls for clarity on the banking issue have been widespread. Last week, the presidents of three Federal Reserve banks urged lawmakers to pass legislation that would provide guidance to financial regulators on servicing cannabis businesses. These companies have made clear to Congress that the existing situation, which has forced the industry to operate on a largely cash-only basis, is untenable.
Not only does that make the businesses targets of crime, but Mnuchin said the IRS “cash rooms” for cannabis-related tax deposits also create “all different types of security issues.”
“There is not a Treasury solution to this. There is not a regulator solution to this,” he said. “If this is something that Congress wants to look at on a bipartisan basis, I’d encourage you to do this. This is something where there is a conflict between federal and state law that we and the regulators have no way of dealing with.”
Rep. David Joyce (R-OH) also raised the issue during the hearing, asking Mnuchin if he could connect him with senior staff members at the Treasury to advise in the legislative process. The secretary said he would follow up and then repeated that conflicting federal and state laws are at the center of the problem.
“We’re not taking a policy position on the conflict of federal versus state, but this is something that does create a conflict in our ability to administer many areas,” he said.
Rep. Mike Quigley (D-IL), chair of the subcommittee, commended Joyce for his “clear, consistent, ongoing concern for the issue related to cannabis banking and the related issues that go with it.”
Rep. Norma Torres (D-CA) didn’t ask Mnuchin a question about marijuana banking, but she did briefly comment about the issue and said “[w]hen there’s so much cash around, it creates a lot of problems.”
“When I look at crime around facilities that sell cannabis, it’s a big issue in our communities and I hope that you’ll take some time to look into that,” she told the secretary.
At least one potential legislative fix has taken shape in recent months, with a bipartisan bill that would protect financial institutions that work with marijuana companies having passed a key committee with a bipartisan vote last month. That legislation is expected to be placed on the calendar for a full House vote in the coming weeks.
Photo courtesy of YouTube/House Appropriations Committee.
Trump Says Marijuana Makes People “Lose IQ Points” In Secret Recording
President Trump could be heard saying that using marijuana makes people “lose IQ points” in a secretly recorded conversation released on Saturday.
“In Colorado they have more accidents,” the president said in the clip captured by Lev Parnas, an associate of Trump attorney Rudolph Giuliani, who is at the center of the Ukraine scandal that led to the president’s impeachment. “It does cause an IQ problem.”
(Marijuana Moment’s editor provides some content to Forbes via a temporary exclusive publishing license arrangement.)
Photo courtesy of YouTube/White House.
Austin Police Chief Says Marijuana Arrests Will Continue Despite City Council Vote
Chief Brian Manley said he would continue to enforce marijuana laws the day after the city council unanimously approved stopping arrests and tickets for low-level cases.
The day after the Austin City Council approved a resolution to stop arresting or ticketing people for most low-level marijuana possession offenses, the police chief made clear he had no plans to do so.
“[Marijuana] is still illegal, and we will still enforce marijuana law if we come across people smoking in the community,” Chief Brian Manley said during a news conference Friday afternoon.
Though cracking down on those in possession of small amounts of marijuana has never been a priority for the department, he said, police will continue to either issue tickets under the city’s “cite-and-release” policy or arrest people if officers “come across it.”
The difference, according to City Council member and resolution sponsor Greg Casar, is that the council’s move now guarantees those actions will come with no penalty. Tickets will be meaningless pieces of paper and any arrests will result in a quick release with no charges accepted from prosecutors, he told The Texas Tribune after the news conference.
“What has changed since yesterday is that enforcement, almost in virtually all cases, is now handing someone a piece of paper with no penalty or no court date,” Casar said.
The move by the City Council came as a direct result from Texas’ new hemp law which complicated marijuana prosecution across the state. Last summer, when lawmakers legalized hemp, they also changed the definition of marijuana from cannabis to cannabis that contains more than 0.3% THC, the psychoactive ingredient in the plant.
Many prosecutors, including those in Austin’s Travis County, now won’t accept pot cases based on look and smell alone, requiring lab testing to determine THC levels before accepting a case. Such testing is not yet available in public crime labs, though some counties and cities have spent money to obtain test results from private labs.
The council’s resolution prohibited using city funds or personnel to conduct such testing in non-felony marijuana cases. It also directed the elimination, to the furthest extent possible, of arrests or citations for cannabis possession. As Manley also noted, the resolution clarifies it can’t technically decriminalize marijuana, since that is state law.
The resolution gave the city manager until May 1 to report back to the council on how police were trained in this new resolution, and Casar said he hopes Manley reviews his policies before then.
Manley said in the news conference that he would continue to review the resolution, as well as police policies.
But, he assured, “a City Council does not have the authority to tell a police department not to enforce a state law.”
The Texas Tribune is a nonprofit, nonpartisan media organization that informs Texans — and engages with them — about public policy, politics, government and statewide issues.
Andrew Yang Wants To Legalize Psychedelic Mushrooms For Military Veterans
Andrew Yang says he wants to legalize psilocybin mushrooms for military veterans to help them combat mental health conditions such as post-traumatic stress disorder (PTSD).
During a town hall event at an Iowa college on Thursday, the 2020 Democratic presidential candidate was asked whether he would take initiative and allow veterans to access medical marijuana if elected. Yang replied he “will be so excited to be that commander-in-chief” that he would not only end federal cannabis prohibition but would go one step further by legalizing the psychedelic fungus for veterans as well.
“We need to get marijuana off of the Controlled Substances Act and legalize it at the federal level, make it freely available,” he said. “I say this because I’ve talked to hundreds of veterans and other Americans who benefit from marijuana as a pain relief treatment, and it’s much less deadly than the opiates that many, many people are using for the same conditions.”
“I’ve talked to veterans who’ve also benefited from psilocybin mushrooms,” he added. “They said it was the only thing that actually has helped combat their PTSD. I’m for legalizing psilocybin mushrooms for veterans as well. Pretty much if it’s going to help a veteran, we should make it easier, not harder, for them to get access to it.”
Yang’s drug policy reform platform is unique in that respect. While the majority of Democratic candidates support marijuana legalization, he’s pushed unique proposals such as decriminalizing possession of opioids and making psilocybin mushrooms “more freely available” for therapeutic purposes. The candidate also wants to invest federal funds in safe injection facilities where individuals can use prohibited drugs in a medically supervised environment and receive help getting into treatment.
He hasn’t gone so far as embracing the decriminalization of all drugs, as former South Bend, Indiana Mayor Pete Buttigieg has, however.
That said, Yang did signal that he’s open to legalizing and regulating “certain drugs” beyond cannabis, which he argued would disrupt international drug cartels. Rep. Tulsi Gabbard (D-HI) recently said she backs “legalizing and regulating” currently illegal controlled substances to protect public safety and combat the illicit market.
At the Iowa town hall, Yang went on to say that he’s particularly interested in legalizing marijuana, and he again pledged to “pardon everyone who’s in jail for a non-violent marijuana-related offense because they shouldn’t be in jail for something that’s frankly legal in other parts of the country.”
“And I would pardon them all on April 20, 2021, high-five them on the way out of jail and be like, ‘things got a lot better in the last year,'” he said, referencing the unofficial cannabis holiday 4/20.
Photo element courtesy of Gage Skidmore.