The Trump administration’s top fiscal official appeared to voice support for letting marijuana businesses store their profits in banks.
“I assure you that we don’t want bags of cash,” Treasury Secretary Steven Mnuchin testified on Tuesday during an appearance before the House Financial Services Committee. “We want to make sure that we can collect our necessary taxes and other things.”
Mnuchin, in a series of responses to questions from lawmakers who raised concerns about the public safety implications of preventing cannabis businesses from accessing banks and forcing them to operate on an all-cash basis, said the Treasury Department is currently considering how to deal with the issue.
In 2014, under the Obama administration, the department’s Financial Crimes Enforcement Network (FinCEN) issued guidance that has allowed banks to open accounts for marijuana growers, processors and retailers without running afoul of federal regulators.
But last month, U.S. Attorney General Jeff Sessions rescinded a broader policy from the former administration that had generally cleared the way for states to implement their own cannabis laws without Justice Department interference. Sessions’ move has led to fears that the Trump administration may tear up the banking memo as well.
Last week, a top Treasury official wrote in a letter to lawmakers that the department is “consulting with law enforcement” about whether to maintain the guidance for depository institutions. Last month, a Mnuchin deputy testified at a Senate hearing that the banking document remains in effect while the administration weighs whether to revoke it.
At the Tuesday hearing, Mnuchin confirmed that the department is “reviewing the existing guidance.” But he clarified that he doesn’t want to rescind it without having an alternate policy in place to address public safety concerns.
“The intent is not to take it down without a replacement that can deal with the current situation,” he said.
Rep. Brad Sherman (D-CA) told Mnuchin that simply deleting the banking memo “would really make it better for armed robbers in my community, because there’d be huge amounts of cash at the local marijuana dispensary.”
Reps. Denny Heck (D-WA) and Ed Perlmutter (D-CO) also raised questions about the issue.
“We specifically haven’t taken it down,” Mnuchin said of the 2014 memo. “We are looking at what Justice has done. And again, as I said, we’re sensitive to the issue of dealing with the public safety issue and also making sure that the IRS and others have ways of collecting taxes without taking in cash.”
In response to comments about pending congressional legislation to address cannabis businesses’ access to financial services, Mnuchin pledged to consult with White House Office of Management and Budget Director Mick Mulvaney, who as a member of Congress previously sponsored a similar bill.
Perlmutter’s legislation on the issue currently has 78 co-sponsors, and a companion Senate version has 14 senators signed on. Bipartisan groups of House and Senate lawmakers have also sent letters to the administration urging that the banking guidance be maintained.
During the hearing, Mnuchin also appeared to confirm a Reuters report that FinCEN was not consulted in advance about Sessions’s decision to change federal marijuana enforcement policy.
“I did not participate in the attorney general’s decision and what he did, but we are consulting with them now,” he said. “We do want to find a solution to make sure that businesses that have large access to cash have a way to get them into a depository institution for it to be safe.”
The FinCEN policy, which requires financial institutions to regularly file reports on their cannabis customers, was intended to provide clarity and assurances to banks, but many have remained reluctant to work with marijuana businesses because of overarching federal prohibition.
Nonetheless, documents released by FinCEN late last year showed that the number of banks willing to work with the marijuana industry has steadily grown over time, though those figures were collected prior to Sessions’s move to revoke the broader Justice Department guidance.
Prior to his being confirmed by the Senate last year , Mnuchin said in response to written questions from a senator that marijuana businesses’ banking and tax issues are “very important.”
Coronavirus Crisis Shows Marijuana Is ‘Essential’ And Mainstream
Never has it been more clear than during the current COVID-19 pandemic that marijuana has arrived at the forefront of mainstream American society.
In state after state, governors and public health officials are deeming cannabis businesses “essential” operations that can stay open amid coronavirus-related forced closures and stay-at-home mandates. People might not be able to go bowling or see a movie in theaters, but they can still stock up on marijuana.
(Marijuana Moment’s editor provides some content to Forbes via a temporary exclusive publishing license arrangement.)
Photo courtesy of Carlos Gracia.
Marijuana Industry Pleads For Access To Federal Coronavirus Business Relief
As Congress scrambles to reach a consensus on how to help Americans caught in the financial fallout of COVID-19, a coalition of marijuana industry trade groups is urging federal lawmakers not to forget about the hundreds of thousands of workers in state-legal cannabis industries.
Legal marijuana now employs an estimated 240,000 people in the U.S. but, because cannabis remains federally illegal, marijuana businesses remain cut off from nearly all benefits at the federal level, including emergency relief funds.
In a letter sent Friday to leaders of the House and Senate, major cannabis industry associations called on lawmakers to remove those restriction and ensure that state-legal cannabis businesses can qualify for assistance.
“Our members follow strict regulations, create jobs, generate billions of dollars in tax revenue—including federal corporate tax revenue—and act as good corporate citizens,” the groups said. “Yet it appears as if these businesses will not be eligible for the same loans available to other businesses in this country at risk due to the global pandemic.”
The letter was sent jointly by the National Cannabis Industry Association, National Cannabis Roundtable, Minority Cannabis Business Association, Global Alliance for Cannabis Commerce and Cannabis Trade Federation.
“The ineligibility of cannabis businesses for disaster assistance loans is especially inequitable given that these same cannabis businesses are required to comply with other coronavirus-related measures, such as paid sick leave coverage,” the organizations wrote. “We are not seeking special treatment for state-legal cannabis businesses. We only seek to have them treated on an equal level as all other job-generating, tax-paying companies in this country.”
In a separate announcement on Friday, the nonprofit group NORML said in a blog post that the organization has been reaching out “to our numerous allies on Capitol Hill” to ensure that “discriminatory practices do not apply to those in the industry seeking unemployment benefits [for cannabis workers] during these uncertain times.”
“Given the tremendous amount of uncertainty in the broader economy,” NORML Political Director Justin Strekal said in a statement, “the hundreds of thousands of American workers who are employed by the state-legal marijuana industry must be respected and protected by the emergency actions being taken by elected officials.”
Cannabis Workers, Unemployment Insurance, and the Small Business Administration: What You Need to Know https://t.co/Tt2y2ovVHg
— NORML (@NORML) March 20, 2020
Programs already in place should extend at least some benefits to marijuana workers, NORML said in the post. In addition to workers qualifying for state-level unemployment benefits, the cannabis industry could see help from the congressional Families First Coronavirus Response Act.
The act, signed into law this week, directs federal funds to state governments to help with COVID-19 efforts. NORML said that after conferring with experts, it believes the act “provides the individual states with the authority to decide for themselves which industries are legally eligible to receive benefits.”
But unless lawmakers amend current rules, state-legal cannabis companies won’t receive a dime of disaster relief aid provided by the federal government to other small businesses. The federal Small Business Administration (SBA) is prohibited from providing financial assistance to industries that are illegal under federal law.
NORML said that it “will continue to work with our federal allies to call for an end for such discriminatory practices against the cannabis industry and those whose livelihoods depend upon it.”
One way to address the issue, NORML said, would be to pass pending legislation introduced last year by Rep. Nydia Velázquez (D-NY), who chairs the House Small Business Committee. The bill, H.R. 3540, would remove cannabis from the Controlled Substances Act and prohibit SBA from denying services to marijuana-related businesses.
That legislation was introduced just days after federal lawmakers heard about challenges facing small cannabis businesses at a hearing. Language from the bill was later included in the Marijuana Opportunity, Reinvestment, and Expungement (MORE) Act, which was approved by the House Judiciary Committee last year.
“Now is not the time for Congress to think small,” Strekal, of NORML, urged as lawmakers continued debating how to best address the crisis. “Including Chairwoman Velazquez’s proposal to have the SBA support small cannabis businesses would protect both American jobs and the consumers that they serve.”
Meanwhile, the coronavirus pandemic is also impacting drug policy reform efforts across the country. Lawmakers in New York have said in recent days that the effort to legalize marijuana for adults may be delayed due to coronavirus. Ballot initiative campaigns in California and Washington, D.C., have asked local officials for permission to gather signatures online. And in Nebraska, activists pushing to legalize medical marijuana in the state have announced they’ve temporarily suspended their signature gathering campaign.
“We look forward to the opportunity to get back out there to help Nebraskans create meaningful change for each other,” Nebraskans for Medical Marijuana posted to Facebook on Thursday, “and we wish you and your loved ones health and peace of mind.”
Read the cannabis industry letter to congressional leaders below:
Colorado Just Issued The First Marijuana Delivery License In The State
As more Americans across the country are sheltering at home during the COVID-19 pandemic, a major Colorado cannabis retailer announced that it has received the state’s first permit to deliver medical marijuana directly to patients’ doors.
Boulder-based medical cannabis dispensary The Dandelion, which is owned and operated by the retail chain Native Roots, obtained Colorado’s first state-issued delivery license last week, the company announced on Thursday in a press release.
Delivery services won’t be available immediately, however. Shannon Fender, director of public affairs for Native Roots, said The Dandelion is hoping to begin its first deliveries by the end of the month.
“We will be providing more information about the date we’re going live,” Fender told Marijuana Moment in a phone interview, “but we’re planning for the end of March.”
Patients will also have to register as members of The Dandelion in order to qualify for delivery. Signing up currently requires patients to visit the dispensary in person, but Fender said the company is “looking for a way that patients could do this remotely” given concerns about spreading the coronavirus through human-to-human contact.
— Native Roots (@NativeRoots303) March 13, 2020
Once deliveries do begin, The Dandelion will be able to drop off deliveries only within Boulder or the nearby town of Superior, another jurisdiction that also allows medical marijuana deliveries. Fender said Native Roots has been talking to other local governments “for months” about opting in to local delivery, but so far it’s been slow going.
“The Chamber is excited that Boulder is leading the way on regulation for cannabis delivery. Native Roots has been an upstanding member not only of the cannabis industry, but of the Boulder business community at large,” Boulder Chamber Director of Public Affairs Andrea Menegheal said in a press release. “We look forward to what this means for how our businesses strive to serve the patient community and as other jurisdictions begin policy conversations on cannabis delivery services.”
Under a law passed last year, deliveries of medical cannabis have been allowed under Colorado law since January 2. But, because local jurisdictions must first opt in to allowing delivery, the process of issuing state-level licenses has lagged.
Under the new law, deliveries of recreational marijuana won’t be allowed until January 2021 at the earliest.
Gov. Jared Polis (D) last year described marijuana delivery as a tactic to reduce impaired driving, but it’s become especially relevant in the new era of social distancing. As more and more dispensaries enact policies meant to limit the spread of coronavirus, delivery offers a way to protect vulnerable patients while still ensuring access to medicine.
“The timing is total coincidence, but it’s timely,” Fender at Native Roots said of the company’s delivery plans. “Medical delivery is really another option for patients to utilize social distancing.”
Across the country, state and local governments are grappling with whether to allow cannabis retailers to remain open. Most so far have allowed sales to continue, albeit with extra steps in place to avoid transmitting the virus. Fender said she wasn’t aware of any closures so far affecting Native Roots’s 21 locations in Colorado.
Patient advocacy group Americans for Safe Access this week called on medical marijuana states to keep dispensaries open, urging officials to declare them “essential” services and adopt practices, such as curbside pickup or delivery, to limit transmission of the virus.
Beyond the issue of patient access, the coronavirus is also having a significant impact on drug policy reform efforts across the country. Campaigns to revise California’s adult-use cannabis law and legalize psilocybin mushrooms, as well as a Washington, D.C. campaign to decriminalize psychedelics, have all asked state lawmakers to allow them to collect signatures digitally to prevent viral transmission as they work to qualify for the November ballot.
In New York, hopes to include marijuana legalization in the final budget by an April deadline have largely been dashed due to the need to prioritize a coronavirus response.
Photo courtesy of Chris Wallis // Side Pocket Images