Officials at the U.S. Department of Veterans Affairs (VA) have come out against a series of bills that are designed to protect VA benefits for veterans who use marijuana, allow the department’s doctors to recommend medical cannabis and expand research into the plant’s therapeutic potential.
Lawmakers and advocates representing veterans discussed the proposals during a congressional hearing on Tuesday. And while the Trump administration representatives present said the department opposes the bills, support was widespread among witnesses and subcommittee members, at least for some of the legislation.
“This is the first time we’ve had a hearing like this with a substantive committee,” Rep. Earl Blumenauer (D-OR) said. “One of the great tragedies of our time is the failure to adequately address the needs of veterans returning home from Iraq and Afghanistan… An overwhelming number of veterans tell me that cannabis has reduced PTSD symptoms [and] the dependency on addictive opioids.”
Rep. Julia Brownley (D-CA), chair of the House Veterans’ Affairs Subcommittee on Health, thanked Blumenauer for introducing his Veterans Equal Access Act, which would allow VA physicians to issue medical cannabis recommendations for veterans. She said “it’s an important bill” and that she’s also heard from veterans who want the proposed policy change.
I just testified in @VetAffairsDems on veterans access to medical cannabis. @RulesDemocrats are discussing how we can achieve universal health coverage w/ #MedicareForAll. @HouseJudiciary is holding its first hearing on the #ERA in 36 yrs.
— Earl Blumenauer (@repblumenauer) April 30, 2019
The congresswoman also thanked Rep. Lou Correa (D-CA) for filing his VA Medicinal Cannabis Research Act, which would require the VA to conduct a clinical study on the benefits and risk of medical marijuana in the treatment of conditions such chronic pain and post-traumatic stress disorder.
“It’s time to make sure that veterans get to know what cannabis is good for and what cannabis is not good for. We need medical research,” Correa said. “We owe our veterans a tremendous amount. The least we can do is make sure we’re giving them the proper treatment for those invisible wounds that they brought back from the battlefield.”
“I agree we need to push the VA forward on this,” Brownley said.
The panel also talked about a bill from Rep. Greg Steube (R-FL) that would codify an existing VA policy prohibiting the department from stripping veterans of their benefits just because they use cannabis in compliance with state law.
After the lawmakers spoke to make the case for their respective legislation, veterans advocates and three VA officials offered their feedback and took questions from the committee.
Keita Franklin, national director of suicide prevention in the VA’s Office of Mental Health and Suicide Prevention, said that the department opposes all of the cannabis bills. She said the proposal to require the VA to conduct clinical research on medical cannabis is too ambitious and risky, stating that “a smaller, early-phase trial design would be used to advance our knowledge of benefits and risk regarding cannabis before moving to a type of more expansive approach as described in this proposed legislation.”
“Any trial with human subjects must include an evaluation of the risks and safety and include the smallest number of participants to avoid putting subjects at increased risk unnecessarily so,” she said. “For these reasons, we don’t support this proposed legislation.”
Franklin said the department opposes allowing VA clinicians to recommend medical cannabis because of guidance it’s received from the Drug Enforcement Administration (DEA). VA doctors are prohibited from recommending cannabis in legal states because the DEA “advised VA that no provision of the controlled substances act would be exempt from criminal sanctions as a VA physician who acts with intent to provide a patient with means to obtain marijuana.”
Finally, the VA opposes Steube’s bill, she said, because there is already a VA policy stating that veterans won’t lose their benefits for using cannabis or discussing their usage with a VA health care provider.
The congressman, however, has said his bill is needed to codify the protection into law so that a future administration could not reverse it.
Among the advocacy groups—the Iraq and Afghanistan Veterans of America (IAVA), Veterans of Foreign Wars (VFW) and Disabled American Veterans (DAV)—there was particularly strong interest in advancing the legislation to mandate VA research into medical marijuana.
Joy Ilem, national legislative director of DAV, said the group concurs “that research is necessary to help clinicians better understand the safety and efficacy of cannabis use for specific conditions that often cooccur in the veteran population such as chronic pain and post-traumatic stress.”
Carlos Fuentes, director of national legislative services at VFW, also endorsed that bill. He said that “VFW members tell us medicinal cannabis works, and it is a more suitable option than the drug cocktails VA prescribes” and that “VA must research how medicinal cannabis can help veterans cope with PTSD and other conditions such as chronic pain.”
"The VFW is proud to support the VA Medicinal Cannabis Research Act of 2019 … VA must expand research on the efficacy of non-traditional alternatives to opioids, such as medicinal cannabis and other holistic approaches." #VFWTestimony
— VFW National HQ (@VFWHQ) April 30, 2019
But while VFW supports the “intent of the Veterans Equal Access Act”—Blumenauer’s bill to allow recommendations from VA physicians—Fuentes said the group “cannot offer its support at this time.” At issue is the fact that the VA wouldn’t be able to provide medical marijuana at its pharmacies if a VA doctor issued a recommendation.
The VFW agrees with the intent of the Veterans Equal Access Act, but cannot offer its support at this time. #VFWTestimony
— VFW National HQ (@VFWHQ) April 30, 2019
“The VFW agrees that veterans relying on the VA health care system must have access to medicinal cannabis if such therapies are proven to be effective in assisting and treating certain health conditions,” he said. “Without such evidence, VA would not have the ability to prescribe or provide medicinal cannabis to veterans. It is unacceptable for VA providers to recommend a treatment that is unavailable to veterans at their VA medical facilities.”
Vets who participate in such programs must not fear VA will take away benefits they earned & deserve. However, we cannot support requiring VA providers to recommend participation in state-approved marijuana programs if VA is unable to provide such recommended course of treatment
— VFW National HQ (@VFWHQ) April 30, 2019
IAVA voiced support for both the Veterans Equal Access Act and the Veterans Cannabis Use for Safe Healing Act.
@StephMuls before @VetAffairsDems @HouseVetAffairs Health Subcommittee: Says 90% of @IAVA Members support research into medicinal cannabis research, calls on Congress to pass the VA Medicinal Cannabis Research Act (HR 712).
— Tom Porter (@TomPorterDC) April 30, 2019
Addressing the second panel, Franklin, the committee chairwoman, spoke strongly about the “frustration” created by VA’s ongoing resistance to policies that veterans support.
“We’ve got a couple of bills before us, which I think are good bills. And the VA doesn’t support those bills,” she said. “We have [veteran services organizations] speaking in favor of these bills. This seems to be an issue that has been going on now for a while—this schism between what the VA believes and what the VSOs want.”
“This is a big frustration for me because I think it’s overwhelmingly clear amongst the American people and amongst our veterans across the country that this is an issue that they are keenly interested in and want to have access to,” she said. “I guess my question is, how are we going to reconcile this?”
Larry Mole, the VA’s chief consultant on population health, pinned the blame on the Justice Department. He said that the committee “could make strong proposals” in support of reforming VA cannabis policy, but that “at the end, we will need to go back to DEA and the Department of Justice for their opinion.”
“I’ve not seen anything myself that suggests their opinion will change,” Mole said.
Be that as it may, the Republican ranking member of the subcommittee did propose one possible solution: rescheduling marijuana under the Controlled Substance Act.
“We’re not I think in a position here to protect the VA physicians who want to disperse or prescribe cannabis unless we change that law,” Rep. Neal Dunn (R-FL) said. “So we might be looking at the wrong leverage point when we address these laws without addressing the scheduling of the drug.”
“I could not agree with you more that we ought to be doing research on this,” he said. “I think we ought to change the schedule to Schedule II. It seems like every committee I go in we have another discussion about cannabis.”
Brownley concluded the hearing by saying that she believes there is a “nexus” between cannabis reform and suicide prevention among veterans.
“I think we just have to really be committed to the cannabis issue and to the suicide issue, but where this nexus is.”
Marijuana reform advocates celebrated the hearing and urged lawmakers to move the bills forward. Tuesday’s hearing was the second in the 116th Congress to address cannabis legislation after a separate committee debated a marijuana banking bill in February before voting to approve it last month.
“As the largest healthcare provider in the country, the VA must adopt its polices to appropriately serve the needs veteran community, especially when it comes to providing access to medical cannabis,” David Mangone, director of government affairs at Americans for Safe Access, told Marijuana Moment. “After returning from war, America’s heroes are faced with another battle at home against pills and suicide, and the trio of medical cannabis bills would give them the tools they need to help win this battle by providing less dangerous, non-addictive methods for symptom management.”
Don Murphy, director of federal policies for the Marijuana Policy Project (MPP), noted that in “more than 30 states, members of Congress and their staff can use their federally subsidized health insurance to discuss the benefits of medical cannabis with their doctors.”
“Shamefully our veterans do not have this same right. MPP appreciates the effort of today’s bill sponsors to end this hero double-standard,” he said.
Doug Distaso, executive director of the Veterans Cannabis Project, said in a statement that “President Trump and Congress could literally save veterans’ lives by enacting these bills into law.”
“With opioid overdoses and a suicide crisis hitting our veterans, they deserve legal access to medical cannabis through their VA doctors as a safer alternative to the highly addictive and often deadly opioids and other pills the VA readily gives them,” he said. “These bills would provide the kind of research, legal access through VA doctors, and protection of earned benefits that veterans overwhelmingly want and deserve.”
Marijuana Banking Bill Would Save Federal Money, Congressional Budget Office Says
The federal government would save money if a bipartisan bill to give marijuana businesses access to banks is approved, according to a report released by the Congressional Budget Office (CBO) on Friday.
The legislation, which cleared the House Financial Services Committee in a bipartisan vote of 45 to 15 in March, would change federal law to protect financial institutions that service the cannabis industry from being penalized by regulators. That reform would set off a chain of events, beginning with a likely increase in the number of banks accepting deposits from those businesses, CBO reasoned.
Assuming the bill takes effect near the end of the 2019 fiscal year, the office estimates that starting in 2022, banks would see a $1.2 billion increase in deposits, and credit union deposits would grow by $200 million. By 2029, the amounts “would rise to $2.1 billion and $350 million, respectively.”
Because those deposits would have to be insured through the Federal Deposit Insurance Corporation (FDIC) and the National Credit Union Administration (NCUA), the CBO took into account the possibility that individual financial institutions will fail, and the estimated cost of resolving those failures is $5 million.
That said, those direct spending costs would be “offset by assessments levied on insured financial institutions,” which would amount to about $9 million.
“As a result, CBO estimates, H.R. 1595 would decrease net direct spending by $4 million over the 2019-2029 period,” the office reported.
Rep. Ed Perlmutter (D-CO), the bill’s chief sponsor, told Marijuana Moment that its enactment would have benefits beyond fiscal savings.
“Getting cash off our streets and making our communities safer will come at no cost to the federal government and actually save money while providing a much-needed long-term banking solution for legitimate marijuana businesses across the country,” he said.
“This CBO score should only increase the significant momentum in Congress behind passing the SAFE Banking Act,” Neal Levine, CEO of the Cannabis Trade Federation, told Marijuana Moment. “It is now apparent that we can help diminish a serious threat to public safety at no net cost to the federal government. We look forward to the bill passing through the House and hope the Senate will follow suit.”
There are some implementation costs to take into account, CBO says. The administrative costs are estimated to be $3 million. But the FDIC and NCUA are able to charge premiums on the financial institutions they regulate to cover much of those costs. The total net administrative costs would, therefore, be about $1 million.
The Federal Reserve would also have to spend funds to implement the bill, and that would reduce remittances to the Treasury Department. Those remittances are considered revenue, which is expected to decrease by about $1 million if the legislation is implemented.
Then there are costs related to other provisions of the bill. Financial regulators would have to update and issue new guidance, which would “cost less than $500,000 over the 2019-2024 period.”
The legislation also requires the Government Accountability Office to study barriers to entry in the marijuana industry and to financial services for minority- and women-owned cannabis businesses. The costs are estimated to be less than $500,000 annually from 2020 to 2024.
The CBO also estimated that enacting the legislation “would not increase on-budget deficits by more than $5 billion in any of the four consecutive 10-year periods beginning in 2030.”
The CBO outlined “several noteworthy areas of uncertainty” that could change the calculus.
1. New guidance from federal financial regulators could be more or less stringent than existing guidance implemented under the Obama administration, which could impact the amount of deposits banks and credit unions will receive.
2. Data on cannabis-related deposits is currently “limited,” as federal restrictions have forced marijuana businesses to operate on a largely cash basis. That means CBO’s estimates on the amount of deposits financial institutions will see could end up being “greater or smaller.”
3. If those estimates do end up being different, costs associated with the bank and credit union insurance funds “could be higher or lower depending on the amount of premium collections and capital deposits and on changes in the resolution costs for financial institutions.”
Sahar Ayinehsazian, an associate attorney at Vicente Sederberg LLP who specializes in cannabis banking, told Marijuana Moment that most of the figures lined up with her expectations. However, given that many marijuana businesses have gravitated toward credit unions rather than banks, she said the estimate increase in deposits to those financial institutions may well end up being larger.
“Looking at the chances of this legislation passing from an economic standpoint, I think [the CBO score is] good news,” she said.
Other advocates agreed that the CBO estimate should help efforts to advance the bill.
“For years, cannabis advocates have been preaching the net benefits SAFE Banking would have on consumers, patients, financial institutions, regulators and taxpayers. This CBO cost estimate confirms that,” Michael Correia, director of government relations for the National Cannabis Industry Association, told Marijuana Moment. “The increase of insured deposits, coming from the added certainty this legislation brings, far outweighs the minor administrative costs to implement this bill.”
The House marijuana banking bill currently has 184 cosponsors, and a companion Senate version has 30 lawmakers signed on. The committee of jurisdiction in the upper chamber has not yet set a hearing or a vote, but pressure is increasing.
Banking associations from all 50 states urged the Senate to take up the legislation earlier this week. Other organizations that have called for a resolution to the cannabis banking dilemma include the National Association of Attorneys General, which has endorsed the bill, and the National Association of State Treasurers, representing state treasurers and finance officials, which adopted a resolution last week in favor of the legislation’s passage.
Want 4 million more reasons why members of Congress should support the #SAFEBankingAct, which would allow cannabis businesses to access the banking system in the 33 states where it’s legal? @USCBO says the legislation will save taxpayers $4M over 10 years.
— American Bankers Association (@ABABankers) May 24, 2019
The new analysis is just the third time that the CBO, which is mandated to score bills that pass full committees, has issued a report on the economic impact of standalone cannabis legislation. The agency scored two marijuana research bills that cleared committees last year.
This story was updated to include comment from Perlmutter and Correia.
Federal Small Business Administration Pressed On Supporting Marijuana Industry
Sen. Jacky Rosen (D-NV) pressed a federal official responsible for advocating for small businesses on Wednesday about whether existing laws and regulations are preventing the growth of state-legal marijuana markets.
The line of questioning comes as members of Congress are preparing legislation aimed at removing barriers to small business assistance for cannabis industry participants.
The senator said at a hearing of the Senate Small Business and Entrepreneurship Committee that her state’s legal industry is attracting small businesses and entrepreneurs who are selling millions of dollars of product each month. She asked Major Clark, acting chief counsel of the office of advocacy at the Small Business Administration (SBA), about the unique barriers these companies face under federal prohibition.
“Senator, that’s a difficult question,” Clark replied. “We have not actually studied the issue of marijuana in that regard, and we have not because the federal government has not yet legalized it.”
“We do, in conversations with a lot of businesses, get inquires as to what they can do and how they can do it. But to actually do an analysis of it, we have not yet done that,” he said. “I’m sure that as soon as the federal government decides to legalize this substance, we will begin to study its impact and the ability to use it in a more economical context within the state.”
Watch the conversation about small business assistance for cannabis operators at 35:50 in the video below:
Rosen followed up to get Clark’s opinion about whether marijuana companies would benefit from some of the guidelines and resources the SBA offers to small businesses in other industries.
“These types of businesses can benefit from some of these types of things, but again, because this issue is an issue that has not reached the surface of being legalized, we have actually stayed away from trying to advise these businesses on these particular aspects,” he said.
Nevada’s cannabis industry cannot thrive without access to financial services. At yesterday’s @SmallBizCmte hearing, I asked what steps @SBAgov is taking to break down regulatory barriers for our nation’s legal marijuana businesses to ensure they can continue to grow. pic.twitter.com/lyfXGwpoRf
— Senator Jacky Rosen (@SenJackyRosen) May 24, 2019
Sen. James Lankford (R-OK), chair of the committee, weighed in on the issue after the Rosen’s time expired, saying that he recognizes the difficulty that federal agencies face when it comes to regulating a controlled substance.
“It is a unique challenge dealing with a Schedule I drug on the federal side and to also know that some states, including my own, have said that they want to allow it,” Lankford said, referring to the medical cannabis law that Oklahoma voters approved in 2018. “And the federal government and the [Food and Drug Administration] continues to study it and say there’s no medicinal gain from this product.”
“It’s a Schedule I drug. I get it,” he said. “The science, and whether it is SBA or whoever it is continues to be able to deal with that.”
While lawmakers push to get marijuana businesses access to federally authorized financial services, industry advocates say that SBA-specific reform legislation may be on the horizon.
The day after Rosen questioned the SBA official about cannabis policy, Khurshid Khoja, a board member for the National Cannabis Industry Association, said at a press conference on Capitol Hill that a bill was being drafted to “essentially get SBA services for cannabis businesses and for cannabis businesses from disproportionately impacted communities.”
Watch the SBA reform discussion at about 32:15 in the video below:
“The House Small Business Committee is looking into the issue and is interested in holding a hearing and drafting legislation this summer that addresses these issues,” a cannabis policy lobbyist who didn’t wish to be named in order to discuss plans that are in development, told Marijuana Moment separately.
Photo courtesy of Brian Shamblen.
GOP Congressman Exposes Flaws In VA Marijuana Research Projects
Rep. Matt Gaetz (R-FL) emphasized the importance conducting clinical trials on medical marijuana at the U.S. Department of Veterans Affairs (VA) on Tuesday, a topic on which he has often focused.
He also criticized the catch-22 of VA cannabis research, arguing that while the department is able to conduct clinical trials on marijuana, it doesn’t effectively publicize those studies, leaving veterans who might be interested in participating in the dark.
The congressman started by asking whether Mike Colston, director of mental health policy and oversight at the Department of Defense, felt that giving veterans access to medical cannabis could reduce suicides.
Colston said “there’s far more research to be done” and that there’s “insufficient evidence for or against that position.”
Gaetz cited research showing reductions in opioid use in states that have loosened cannabis laws, and he questioned whether “the current offramp for opioid addiction,” which typically involves prescribing long-term opioids that are less potent and less prone to abuse, “is a more effective offramp than medical cannabis.”
“I just think those are the three evidence-based therapies right now that meet the medical bar,” Colston said, referring to bupenehprine, methadone and naltrexone. “Obviously more research can change that.”
That prompted Gaetz to expand on VA policy as it pertains to medical cannabis. He asked for confirmation that the department’s doctors cannot currently recommend marijuana to veterans in states where it’s legal.
They can’t do that because “there’s a federal law against it right now,” Keita Franklin, national director of suicide prevention at the VA, claimed. (This has been a point of contention for legalization advocates, who argue that only the VA’s own internal administrative policies, and not an overarching federal law, blocks such recommendations.)
But VA officials can conduct clinical trials on marijuana, Franklin said.
“We have two ongoing research studies going on right now in this space,” she said. “I think we are open to research, yes.”
The congressman wanted to know if the VA publishes information about these studies and where to find it. The VA official wasn’t sure—and that was exactly Gaetz’s point.
“I don’t think anyone is clear, which is the source of my frustration because I think that there are a lot of these clinical trials that are seeking veterans,” he said. “The VA, due to a lack of clarity, won’t publicize that information or make it available, and then we’re unable to do the research that Captain Colston says is necessary to advance additional options for veterans trying to get off opioids and to stop them from killing themselves.”
Lawmakers have introduced legislation this session that would allow VA doctors to issue medical cannabis recommendations and require the department to conduct clinical trials on the plant’s potential therapeutic benefits for veterans, among other cannabis and veterans-related bills.
But if the VA is mandated to research the plant, Gaetz wants the department to better publicize the studies so that would-be participants actually know about them.
Photo courtesy of YouTube.