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Trump Treasury Secretary Wants Marijuana Money In Banks

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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But last month, U.S. Attorney General Jeff Sessions rescinded a broader policy from the former administration that had generally cleared the way for states to implement their own cannabis laws without Justice Department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.”

This piece was first published by Forbes.

Marijuana Moment is made possible with support from readers. If you rely on our cannabis advocacy journalism to stay informed, please consider a monthly Patreon pledge.

Tom Angell is the editor of Marijuana Moment. A 15-year veteran in the cannabis law reform movement, he covers the policy and politics of marijuana. Separately, he founded the nonprofit Marijuana Majority. Previously he reported for Marijuana.com and MassRoots, and handled media relations and campaigns for Law Enforcement Against Prohibition and Students for Sensible Drug Policy. (Organization citations are for identification only and do not constitute an endorsement or partnership.)

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Sen. Chuck Schumer Welcomes Major Cannabis Company To New York’s Hemp Industry

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Canadian marijuana giant Canopy Growth Corporation will enter the nascent U.S. hemp industry by building a massive farming and production center in southern New York, U.S. Senate Minority Leader Chuck Schumer (D-NY) announced on Monday.

Canopy has yet to finalize its plans for an exact location—a contract could be signed as soon as Monday, Schumer said—but the company could eventually support “up to 400 jobs” in hemp cultivation, processing and product manufacturing at what would be a “first of its kind” center for the just-legalized U.S. hemp industry, the senator said.

Once a key American crop—George Washington famously grew hemp at Mount Vernon, and there was a stand of hemp plants in northern Virginia where the Pentagon now stands—the U.S. now lags far behind other countries in hemp production, a result of the country’s broad outlawing of cannabis decades ago.

Eventually, Canopy plans to invest “between $100-$150 million” into a New York State-based industrial hemp farm, Schumer said, with other companies potentially drawn to the sector by such a prominent anchor business.

“Hemp is a very valuable product and a burgeoning crop here” in southern New York, said Schumer, offering a very brief remedial education in the plant for those present at a press conference he convened. “I’m not kidding when I say this, but hemp is everywhere.”

“This is going to be a major shot in the arm” for the area, he added.

“Hemp” is more of a legal than a botanical distinction. Under U.S. law, cannabis sativa with 0.3 percent or more THC is considered “marijuana” and falls under federal drug-control laws. Cannabis with less than 0.3 percent THC is considered industrial hemp.

Hemp has been legal to import and process, but until very recently, hemp cultivation was mostly illegal in the U.S.

That prohibition that ended when President Donald Trump signed the 2018 Farm Bill into law last month. The previous 2014 version of the Farm Bill created a pilot program for states that wished to legalize small-scale hemp cultivation as part of research programs.

Based on that success and on growing support for an end to cannabis prohibition nationwide, the 2018 Farm Bill legalized cultivation of hemp outright. Almost immediately, politicians began touting the crop’s potential as a miracle product and an economic boon with enthusiasm once reserved only for acolytes of hemp evangelist Jack Herer.

Senate Majority Leader Mitch McConnell, who championed the hemp legalization provisions, signed off on the final version of the Farm Bill with a hemp pen—but for now, Schumer, his Democratic counterpart, may have stolen the top Republican’s fire.

“I’ve always believed that states should be the laboratories of democracy,” he said. “I’ve been very eager to have the hemp industry grow in New York and the Southern Tier.”

Hemp Legalization Is Officially In The Final Farm Bill

Photo courtesy of Senate Democrats.

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Alcohol Sales Aren’t Impacted By Marijuana Legalization, Trade Association Finds

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Marijuana legalization hasn’t hurt alcohol sales in the years since legal markets were established in Colorado, Washington State and Oregon, according to a new study from an alcohol trade association.

The Distilled Spirits Council looked at alcohol tax and shipment data before and after legalization to determine whether cannabis reform impacted sales of spirits, beer or wine in legal states.

“Simply put, the data show there has been no impact on spirits sales from recreational marijuana legalization,” the council’s chief economist, David Ozgo, said in a press release on Thursday.

“We now have four years of retail recreational marijuana sales history in Colorado and Washington state, and three years in Oregon, and each of these markets remain robust for spirits sales,” he said. “We did this study because there is a lot of misinformation circulating about the impact of recreational marijuana legalization on distilled spirits and the wider alcohol market.”

Per capita spirits sales actually increased slightly in post-legalization years, which was consistent with national trends. Sales were up 7.6 percent in Colorado, 5.4 percent in Washington and 3.6 percent in Oregon.

Via the Distilled Spirits Council.

The trade association also analyzed beer and wine sales during the same period. For beer, sales were down marginally, with drops of 3.6 percent in Colorado, 2.3 percent in Washington and 3.6 in Oregon. But again, that’s consistent with national trends, according to the study.

Via the Distilled Spirits Council.

Wine sales were mixed across the three states: Up 3.2 percent in Colorado, down 3.1 percent in Washington and up .7 percent in Oregon.

Via the Distilled Spirits Council.

The Distilled Spirits Council also used their analysis as an opportunity to plug their policy recommendations to lawmakers in states considering marijuana legalization. While the association has declined to take a position on whether to legalize, it shared a list of recommendations ranging from equitable taxes on cannabis and alcohol to THC content disclosure requirements.

There is at least one major alcohol group that is willing to support states’ right to legalize, though. The Wine & Spirits Wholesalers of America (WSWA) called for the end of federal marijuana prohibition last year and, in December, went so far as to host a briefing on cannabis policy for lawmakers and congressional staffers.

Reform advocates have questioned whether legal access to marijuana would adversely impact alcohol sales, with more people opting to consume cannabis over booze. There is some research that indicates the alcohol industry is being interrupted in medical marijuana states, but more data is needed.

Marijuana Is Safer Than Alcohol, Tobacco Or Sugar, Americans Say In New Poll

Photo courtesy of Pixabay.

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Former DNC And RNC Chairs Join One Of The World’s Largest Marijuana Companies

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One of the world’s largest marijuana companies announced the formation of an international advisory board on Thursday. Among those joining the team at Tilray are former Vermont Gov. Howard Dean, who also served as the Democratic National Committee (DNC) chair, and Michael Steele, who headed the Republican National Committee (RNC) and served as Maryland’s lieutenant governor.

That the former chairs of both major parties are entering the legal cannabis industry reflects the narrowing political divide over the issue. But it also seems to reflect a personal evolution on the issue for Dean, who two decades ago as governor of Vermont opposed even legalizing industrial hemp out of concern that it would lead to marijuana legalization.

”I don’t think it’s in anybody’s best interest to do that. It sends the wrong message to our kids,” he said at the time. “I think the principal interest of the advocates is to legalize marijuana.”

According to legalization advocates, Dean also effectively blocked a vote on a medical cannabis bill that was going through the Vermont legislature in 2002, repeatedly arguing that neither voters nor lawmakers should be able to implement a legal medical marijuana system because, to him, it was a public health decision and up to the Food and Drug Administration (FDA) to determine whether the plant had therapeutic value.

Though he later attempted to distance himself from more aggressive anti-marijuana actions at the federal level while running for the Democratic Party’s 2004 presidential nomination, he declined to rule out ending raids against medical cannabis facilities—but he did say individual patients suffering from serious illnesses shouldn’t be raided or locked up over marijuana.

During his ultimately failed presidential bid, Dean said he would require the FDA to completed a scientific assessment of cannabis within one year and that he was willing to accept whatever outcome the agency arrived at.

In the years since, he has remained sheepish about legalization, though he’s voiced support for decriminalization and said that “we need to completely change the way we deal with drug laws in this country.”

Steele, for his part, has talked frequently in recent years about the need to end federal cannabis prohibition and also cultivate a legal industry that’s inclusive and responsible. But during his time at the RNC, the party declined to embrace reform as part of its platform.

In an editorial for The Hill earlier this year, Steele said he’s a “strong supporter of medical marijuana.”

“I favor state-based access to medical marijuana from both a philosophical and policy standpoint,” he wrote. “I also support the reform of our federal cannabis laws to bring conformity to federal regulations and state laws.”

Later, he seemed to back broader legalization in an interview with Arcview.

“I don’t have a problem with adult use as long as it’s appropriately regulated and taxed and all those other things that make sure that it doesn’t get into the hands of anyone under a certain age,” he said. “And so there are ways that you can approach the private, personal use of cannabis beyond the medical scope that I think can go to address a number of the concerns that people have.”

Dean and Steele both appeared on a HuffPost Live segment in 2012, where they discussed the failures of the drug war and the shifting politics of reform. Now, the two political leaders will reunite to advise Tilray executives as the company “pursues its aggressive global growth strategy.”

Other members of the new international advisory board include former German Foreign Minister Joschka Fischer, former Portuguese Minister of Foreign Affairs Jaime Gama and former New Zealand Minister of Foreign Affairs and Trade Donald McKinnon.

“We are honored to welcome this impressive group of distinguished leaders to the Tilray team,” company CEO Brendan Kennedy said in a press release on Wednesday. “As we pioneer the future of our industry around the world, the experts on our International Advisory Board will advise us on our rapidly expanding global business.”

The former DNC and RNC chairs aren’t the only former politics bigwigs to make headlines over embracing the legal industry. Former House Speaker John Boehner joined the advisory board of another marijuana firm, Acreage Holdings, earlier this year, announcing that he’s “all in on the cannabis industry.” Previously, he had said he was “unalterably opposed” to legalization.

GOP Senator Seeks To Attach Marijuana Reform To Criminal Justice Bill

Photo courtesy of Brian Shamblen.

Marijuana Moment is made possible with support from readers. If you rely on our cannabis advocacy journalism to stay informed, please consider a monthly Patreon pledge.
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