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But last month, U.S. Attorney General Jeff Sessions rescinded a broader policy from the former administration that had generally cleared the way for states to implement their own cannabis laws without Justice Department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

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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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Cypress Hill Rapper Who Opposed California Legalization Opens A Marijuana Store

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On Wednesday, rapper B-Real of Cypress Hill and Prophets of Rage will celebrate the grand opening of his new “Dr. Greenthumb” recreational marijuana dispensary in southern California.

It’s the latest stage in what’s been a significant evolution for the prominent cannabis-friendly musician, who less than two years ago declared himself opposed to the state’s marijuana legalization ballot measure that is making his new venture possible.

In a press release issued Friday advertising “an all day blowout” at Dr. Greenthumb in Sylmar, California, B-Real is described as “a prominent figure at the forefront of cannabis legalization for over two decades.”

“We have a lot of history behind us as it relates to music and the pro-legalization movement,” B-Real said, according to the statement.

That history includes opposing Proposition 64, which legalized marijuana for adults 21 and over and also paved the way for regulated commercial storefronts like the one B-Real is opening.

In the run-up to the November 2016 election, where Prop. 64—also known as the Adult Use of Marijuana Act—passed with more than 57 percent of the vote, the rapper used social media to agitate against its passage.


On October 10, 2016, less than a month before Election Day, the rapper shared an image on social media that claimed Prop. 64 “helps keep the drug cartels in business,” “sets up HUGE growing operations for rich white people, destroying small businesses” and “turns rights into priviledges” [sic].

“Read up Cali!” B-Real wrote on Twitter, where he posted the image that claimed “This is NOT Legalization. VOTE NO.”

B-Real’s opposition was similar to anti-legalization messaging coming from other marijuana advocates, many of whom claimed that the measure was a corporate giveaway that would harm small-and-medium producers. At least some of that has come to pass as the cannabis economy adapts in response to the new reality of broader legalization.

But B-Real seems to have adjusted to the new reality almost immediately.

On Election Night, after cannabis ballot measures won in California, Maine, Massachusetts and Nevada, he posted a message of congratulations.

“Although I’m someone that was and is concerned about prop 64, California made history tonight and to that I tip my hat,” he wrote.

In an e-mail sent via a spokeswoman in response to Marijuana Moment’s questions about B-Real’s evolution on California legalization, the rapper took a free-market approach. He opposed Prop. 64 because of legalization’s regulations and taxes, he explained.

“I was opposed to it at the time because some of the new regulations and penalties along with overwhelming taxation which seemed to be unfair to smaller businesses,” he wrote. “Additionally, a number of other complicated issues that are just now being addressed with new and changing policies. I still think there are things that need further due diligence to give the small business owner a chance at succeeding before the big businesses start to come into play.”

A week after the election, B-Real released a record that, according to a press release, “passionately advocates for marijuana legalization across all 50 states.”

In promotional material for “Prohibition Part 3,” B-Real appeared in a photoshopped image smoking marijuana in public—an act that, were he to do it in real life, is punishable only by a $100 citation thanks to Prop. 64.

And earlier this year, B-Real gave an interview to a New Zealand-based website in which he declared that legalization has “been great.”

“For most of us that have been in the culture for a long time, we’re just seeing and waiting for more of the regulations to happen to know how it’s going to operate officially,” he told Under the Radar. “Right now all the rules and regulation aren’t implemented and in place so we’re just taking it as each day comes and try to be informed and being a step ahead. But it’s been great, a lot of people are happier.”

Regulated and taxed commercial sales of marijuana began in California on January 1.

B-Real, whose musical repertoire with Cypress Hill includes “Hits from the Bong,” “Dr. Greenthumb” has been trying to enter the marijuana-dispensary business since 2015.

In February of that year, he won a lottery drawing to open one of the first medical-cannabis dispensaries in Santa Ana, in Orange County, California.

But by September 2016, shortly before B-Real’s public disavowal of marijuana legalization, the dispensary had still yet to open.

Now, thanks to the passage of Amendment 64 over his own objections, B-Real will be able to sell cannabis to adults over 21 years of age regardless of whether they have a doctor’s recommendation.

“I never changed that stance, but I do have a brand that myself and my partners have been building for a number years in the cannabis industry aside from my over 20 years of advocacy,” B-Real said in his statement to Marijuana Moment about his concerns with the measure. “My intention was always open a shop when the right opportunity presented itself and that we could be fully compilant [sic]. This would ultimately allow me to have a landing place for our brands in the cannabis community for recreation and medicinal consumers.”

The rapper also said that he plans to use some of the proceeds from the new retail operation to “give back to the community and create programs for the youth and show the positive impact from the cannabis community and break some of the still existing opposition.”

“Good can come from this community and we plan to educate through our example,” he said.

Photo courtesy of Festivalsommer // Biha.

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Workplace Deaths Drop After States Legalize Medical Marijuana

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Workers appear to be safer in states that have legalized medical marijuana, according to a new study.

The research, scheduled to be published in the International Journal of Drug Policy in October, is the first of its kind to explore the relationship between medical cannabis laws and workplace fatalities.

Analyzing data from the Bureau of Labor Statistics from 1992 to 2015, a team of researchers found that workplace deaths declined by about 34 percent five years after a state legalized medical cannabis. The trend was most pronounced among workers between the ages of 25 and 44.

“The results provide evidence that legalizing medical marijuana improved workplace safety for workers aged 25–44.”

Because no previous studies have specifically investigated the relationship between legal cannabis and workplace fatalities, the researchers said the results could have gone either way.

Would legalizing cannabis put more workers at risk given the “short-term effects of marijuana use on psychomotor performance and cognition,” or might it lead to fewer workplace deaths in light of what we know about the use of cannabis as a substitute for alcohol and prescription drugs?

Theoretically, if people use marijuana as an alternative to alcohol or pharmaceuticals like opioid-based painkillers, the risk of impairment on the job could be lower, the researchers wrote.

And the data seems to back that up. Though the exact cause behind the trend warrants further research, one finding seems to substantiate the substitution theory: rates of workplace fatalities were lower in states that include pain as a qualifying condition for medical marijuana.

“Specifically, legalizing medical marijuana was associated with a 19.8 percent reduction in the expected number of workplace fatalities among workers aged 25–44 if pain was included as a qualifying condition; if pain was not included as a qualifying condition, the association between legalizing medical marijuana and workplace fatalities was not statistically significant.”

The researchers also observed that states where collective cultivation of cannabis is permitted experienced fewer workplace fatalities, indicating that ease of access may play a role in mitigating these incidents.

Photo courtesy of The International Journal of Drug Policy

How this study could impact public policy

As more states have pushed forward with efforts to legalize cannabis, a conversation has been brewing about employment rights in legal jurisdictions. Courts in numerous states with medical marijuana laws on the books have affirmed employers’ right to terminate workers who test positive for marijuana metabolites, even if they’re registered patients. A handful of states, including Arizona and Illinois, have gone the opposite direction, however, granting employment protections to medical cannabis patients.

More recently, drug reform advocates have been pushing for anti-discrimination policies that would protect marijuana consumers in the workplace. A bill introduced by Rep. Charlie Crist (D-FL) last month would ensure that federal workers wouldn’t be penalized for using cannabis off-the-clock in a legal state, for example.

Part of the logic behind blanket bans on marijuana use is that it is an impairing substance that could jeopardize worker safety. Evidence to support that claim is lacking, and this new study offers a fresh perspective on the debate.

Congressman Pushes Federal Employment Protections For Marijuana Consumers

Photo courtesy of WeedPornDaily.

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Washington State Prepares To Rewrite Marijuana Testing And Packaging Rules

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Marijuana regulators in Washington State will entertain sweeping changes to how marijuana is tested, processed, packaged and sold in one of the U.S.’s oldest recreational marijuana markets, officials announced late Wednesday.

Recreational cannabis has been sold in regulated retail outlets in Washington since 2014. Consumers there pay one of the country’s highest tax burdens, generating nearly $400 million in revenue through the first three years of legalization, as the Stranger reported in late 2017.

But medical marijuana patients have long complained about limited product availability. And a recent string of testing labs suspended for erratic results that allowed unsafe product to reach retail shelves has shaken confidence in product safety.

“Requests from the industry have…been received regarding testing requirements, and changes in testing requirements in other states have prompted further review of WSLCB rules for potential adjustment,” the new notice from the Washington State Liquor and Cannabis Board said. “Additionally, the WSLCB has heard from the medical marijuana patient community that they would like to see additional product types or levels of potency that are not currently supported by the regulatory structure.”

“For these reasons, changes to products, serving amounts in packaging, and other related requirements may be considered,” the regulators announced Wednesday.

Wednesday evening’s notice is the initial notification of potential rulemaking, and “no rule language is offered at this stage of the process.”

Members of the public can submit comments or proposals until October 24. No proposed rules changes are expected to be filed until “on or after October 31,” the notice said.

“Following the comment period, the agency will send out and publish the proposed rules, establish a comment period on the proposed rules, and hold a public hearing before the rules are adopted,” according to the agency.

Until then, the agency “will consider the following topics for potential rulemaking changes,” according to Wednesday’s notice:

  • Lot and batch sizes;
  • Fields of testing and pass/fail level adjustments;
  • Potency testing requirements;
  • Pesticide testing requirements for all cannabis products;
  • Heavy metals testing requirements;
  • Sample deduction requirements;
  • General testing rule adjustments;
  • Product, THC serving limits, and packaging requirements; and
  • “Other related rule changes that may be necessary or advisable,” according to the notice.

Whatever “further adjustments” the agency will propose are meant to “increase efficiencies in testing” and “increase the availability of compliant [cannabis] products,” the notice said.

Anyone interested in submitting comments or proposed rules can contact Joanna Eide, Policy and Rules Coordinator, at [email protected].

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