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USDA Unveils Guidelines For Federal Loans To Hemp Business

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The U.S. Department of Agriculture (USDA) recently released guidelines for processing federal loans for the hemp industry.

Since hemp was federally legalized under the 2018 Farm Bill, it is now considered an agricultural commodity like any other crop, and USDA has taken several steps to sync the market with its various programs and services. And the department’s new memo to state and county offices provides clarity on how to process direct or guaranteed loan applications for hemp producers.

The seven-page document, which was released last month, describes the various requirements a hemp business must satisfy in order to access USDA’s lending services. Chief among those requirements is for a prospective borrower to be licensed under a USDA-approved state or tribal hemp program, or under USDA’s basic regulations if the jurisdiction the business operates in has not submitted its own rules.

“While it’s understood that this new commodity will likely produce some servicing challenges because of State and Federal regulations, it should be treated as closely as possible to any other agricultural commodity and serviced in the same manner,” the memo states. “Hemp will be considered like any other borrower produced commodity, if the hemp was produced under a license authorized by the 2014 or 2018 farm bills, and provided the crop is not abandoned or destroyed.”

Borrowers who are not licensed to grow hemp will be considered in non-monetary default and any losses will not be covered.

While the document emphasizes that hemp should generally be treated the same as other crops, it also acknowledges unique requirements and challenges that the market continues to face.

For example, hemp that contains more than 0.3 percent THC must be disposed of under the department’s rules. And, the memo says, USDA’s Farm Service Agency (FSA) “will not pay for these services for direct loans and FSA will not cover a lender’s advance to the borrower to cover the cost as part of any guaranteed loan loss claim.”

Officials should also be cognizant of ongoing problems with banking access for the industry, as some financial institutions still decline to service businesses that produce the crop despite its federal legalization.

“Applicants should ensure the availability of a banking institution authorizing these financial transactions to ensure availability of proceeds to support payment of expenses and debts,” USDA said. “Additionally, producers will be required to assign their sale proceeds to FSA in an amount not to exceed their annual payment.”

For direct and guaranteed loans, hemp businesses must have a contract with FSA laying out termination policies and their ability to repay the loans. Part of that calculus should involve looking at the “intended use of hemp being produced,” whether that’s fiber, seed or CBD oil.

The Farm Bill doesn’t allow for hemp licenses to be transferred, which also has some lending service implications, USDA wrote.

The memo says that “if the borrower defaults on the loan, dies, or abandons the operation, under no circumstance could another legal individual, lender, or FSA Agency official obtain the right to the commodity and attempt to liquidate it as a full or partial income recovery attempt.”

This latest document seems to build off the establishment of loan programs for hemp businesses that was described in a memo released in February. The purpose of that notice, which itself was an update to one published last October, was to provide “updated guidance on the analysis and evaluation of Direct Loan applications and/or requests for guaranteed loans for industrial hemp growers, especially as it relates to contracts.”

USDA announced last year that producers operating under the 2014 Farm Bill could access certain federal loans, but it said regulations had to be developed for those growing hemp under the latest agriculture legislation. In the time since, the department has been systematically approving state and tribal hemp plans on a rolling basis while at the same time pushing to normalize the industry—by providing hemp businesses with access to federal crop insurance, for example.

More recently, the hemp industry scored a victory after Congress passed legislation last month stipulating for the first time that farmers who cultivate the crop are eligible for federal coronavirus relief programs through the Small Business Administration.

Trump Admin Could Let Researchers Study Marijuana Dispensary Products, Scientist Argues After DOJ Memo Released

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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.

Kyle Jaeger is Marijuana Moment's Los Angeles-based associate editor. His work has also appeared in High Times, VICE and attn.

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Trump Reelection Campaign Attacks Biden As ‘Architect’ Of The War On Drugs

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President Trump’s reelection campaign is seizing on presumptive Democratic presidential nominee Joe Biden’s record as a chief sponsor and champion of punitive anti-drug laws that have contributed to mass incarceration.

In a blog post on Tuesday, the campaign attacked Biden as a “typical Washington career politician who spent decades building up America’s mass incarceration system and poisoning the public discourse with race-baiting, divisive and inflammatory remarks.”

Biden’s role in authoring bills ramping up the war on drugs during his time in the Senate is also being featured in a Trump 2020 video ad—signaling that the president is angling to present himself as the drug policy reform candidate as the November election approaches.

“Biden hasn’t just stoked America’s racial divisions over the course of his decades in Washington,” the blog post on donaldjtrump.com, which was later shared on Twitter by the technically unaffiliated super PAC America First, states. “Biden was the chief architect of mass incarceration and the War on Drugs, which targeted Black Americans.”

“Biden voted to extend minimum penalties for people under 21 charged with selling marijuana, and introduced the civil forfeiture legislation which allows the government to seize assets of citizens accused of drug crimes,” the campaign blog post continues. “Biden helped write the Anti-Drug Abuse Act, which created the 100:1 crack cocaine sentencing disparity and disproportionately targeted minority communities.”

“Biden’s self-imagined reinvention as a racial healer is laughable and requires memory-holing decades of racially inflammatory rhetoric.”

In the video ad released last month, the Trump campaign said that mass incarceration “has put hundreds of thousands behind bars for minor offenses. Joe Biden wrote those laws.”

“Joe Biden’s policies destroyed millions of black lives” due to his role in advancing anti-drug laws and other criminal justice policies, it states. “Joe Biden may not remember. But we do.”

The campaign first indicated it would be highlighting criminal justice reform when it aired an ad during the Super Bowl in February touting the president’s commutation of a person convicted of a nonviolent drug offense.

Drug reform advocates have made similar criticisms of the former vice president, arguing that his record does not bode well for the prospects of comprehensive policy changes in the U.S. criminal justice system. His ongoing opposition to adult-use marijuana legalization has also been a source of frustration, despite his recent support for more modest proposals such as decriminalizing possession, allowing medical cannabis, federal rescheduling, expunging past convictions and letting states set their own laws.

That said, while the Trump administration has taken certain modest bipartisan steps—such as signing sentencing reform legislation, granting clemency to certain individuals with prior federal drug convictions and voicing support for states’ rights when it comes to cannabis legalization—the image of a uniformly pro-reform president that the campaign is attempting to present isn’t the full picture.

“Joe Biden’s record on drug policy is quite abysmal given his role in the 1994 Crime Bill and as one of the lead advocates for increased mandatory minimum sentences and other policies that inflamed our crisis of mass incarceration in this country,” Erik Altieri, executive director of NORML, told Marijuana Moment. “Unfortunately, despite not having a long legislative record like Biden for direct comparison, Donald Trump’s history as it relates to racial justice and drug policy is also quite horrendous.”

Trump’s first attorney general, Jeff Sessions, rescinded Obama-era guidance known as the Cole memo. Under that directive, federal prosecutors were advised not to pursue action against individuals for state-legal cannabis-related activity, except under a select set of circumstances.

Also, while Trump has voiced support for medical cannabis legalization, he’s on several occasions released signing statements on spending legislation stipulating that he reserves the right to ignore a long-standing rider that prohibits the Justice Department from using its funds to interfere with state-legal medical marijuana programs.

Trump also asked Congress to end the medical cannabis protections as part of his fiscal year 2021 budget plan—something the Obama administration also previously did to no avail.

Despite his pledged support for medical cannabis and states’ rights, Trump evidently holds some negative views toward marijuana consumption, as evidenced in a recording from 2018 that was leaked two years later. In that recording, the president said that using cannabis makes people “lose IQ points.”

Another controversial administrative action concerns immigrants and marijuana. In April 2019, the U.S. Citizenship and Immigration Services issued a memo stating that using marijuana or engaging in cannabis-related “activities” such as working for a dispensary—even in states where it’s legal—is an immoral offense that makes immigrants ineligible for citizenship.

In December 2019, the Justice Department issued a notice that it was seeking to make certain marijuana offenses, including misdemeanor possession, grounds to deny asylum to migrants.

In February 2020, the president applauded countries that impose the death penalty for drug traffickers—a point he’s repeatedly been known to make, according to a report from Axios.

Meanwhile, though the president’s reelection campaign is presenting him as a criminal justice reformer, Trump himself in recent days has embraced the slogan of “law and order” as he has seemed to endorse violent law enforcement responses to people protesting police killings of black Americans.

Altieri of NORML said that despite these conflicting statements and administrative actions, the Trump campaign “does seem to understand by putting forth this outreach is that marijuana law reform and ending our failed War on Drugs are popular positions with the majority of all Americans, regardless of political affiliation.”

“All candidates should be putting forth comprehensive plans on how they will address cannabis and criminal justice reform if they are in the White House in 2021, but as of yet we’ve seen mostly lip service and finger pointing in lieu of real solutions,” he said.

The White House Is Reviewing CBD And Marijuana Research Guidance From FDA

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The White House Is Reviewing CBD And Marijuana Research Guidance From FDA

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The White House is currently reviewing a federal plan for marijuana and CBD research.

The Food and Drug Administration (FDA) submitted draft guidance on the issue last week to the White House Office of Management and Budget (OMB).

Details about the document—titled “Cannabis and Cannabis-Derived Compounds: Quality Considerations for Clinical Research”—are sparse. But an FDA spokesperson indicated to Marijuana Moment that it’s related to the agency’s ongoing work to develop broader CBD regulations that could eventually allow for the marketing of cannabis products as dietary supplements or food items.

“We recognize that there is substantial public interest in marketing and accessing CBD for a variety of products. We are working toward a goal of providing additional guidance, and have made substantial progress,” FDA said in a statement. “There are many questions to explore regarding the science, safety, effectiveness and quality of products containing CBD, and we need to do our due diligence.”

“As part of our work, the FDA continues to explore potential pathways for various types of CBD products to be lawfully marketed,” the statement continues. “An important component of this work is obtaining and evaluating information to address outstanding questions related to the safety of CBD products that will inform our consideration of potential regulatory frameworks for CBD while maintaining the FDA’s rigorous public health standards.”

What remains to be seen is whether FDA plans to wait for this specific guidance to be finalized and for the resulting research to be completed before it gets around to issuing final rules for CBD products in general. Stakeholders have been eagerly awaiting those regulations so they can fully take advantage of the legalization of hemp and its derivatives.

“We will continue to update the public about our path forward as our work progresses, and provide information that is based on sound science and data,” FDA said.

While sending the guidance to OMB could be interpreted as a positive development signaling that FDA is making progress on the development of regulations, former FDA Commissioner Scott Gottlieb said on Saturday that White House policies requiring OMB to review scientific documents in the first place represent an onerous step that’s delayed the issuance of guidance.

The FDA spokesperson declined to comment on the former commissioner’s statement.

The agency first announced in January that it planned to publish guidance on cannabis research this year. It’s not clear how long the OMB review will take or when the document will be finalized for public release.

In addition to sending the guidance to the White House for review, FDA is also soliciting public input about the safety and efficacy of CBD in comment period it has decided to keep open indefinitely. The agency said in an update to Congress in March that it has several specific questions it wants answered before deciding whether the cannabidiol can be lawfully marketed. That includes questions about the impact of different methods of consumption and drug interactions.

In the meantime, FDA is maintaining enforcement discretion when it comes to action against companies that sell CBD products regardless of the lack of regulations and has said it is currently targeting sellers that make especially outlandish or unsanctioned claims about the therapeutic value of their products.

It sent a warning letter to a CBD company owned by a former NFL player after advertisements it displayed suggested its products could treat and prevent a coronavirus infection, for example.

FDA sent a letter warning to a company about its marketing of injectable CBD products that led to a voluntary recall last month.

The agency also publicized a voluntary recall of another CBD product from a different company, notifying consumers about potentially high levels of lead in a batch of tinctures.

FDA has previously issued warnings to other CBD companies that have made unsubstantiated claims about the therapeutic potential of their products.

Scientists And Veterans File Lawsuit Challenging DEA’s Marijuana Rescheduling Denials

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Marijuana Legalization And The Fight For Racial Justice (Op-Ed)

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“Black and brown lives matter and we owe it to our country and to ourselves to take tangible steps toward dismantling many of the power structures that perpetuate injustice. Marijuana prohibition is simply one of them.”

By Erik Altieri, NORML

On May 25th, George Floyd was killed on camera by officers affiliated with the Minneapolis Police Department. As were many Americans, we were shocked and disheartened by this tragic and needless loss of life.

As the events of the past few days have unfolded, it is clear that America is in the midst of a long overdue reckoning with itself. Since 1619, when the first ships arrived on the coast of Virginia with enslaved Africans in chains, our country has long had to struggle to address the inequality and structural racism embedded within our public institutions—particularly within the criminal justice system.

From slavery and the Civil War, to the battles to end Jim Crow laws, to the marches for civil rights, to the protests against mass incarceration, to the Black Lives Matter movement, each generation of Americans has stepped up to take action to fight to end racial injustice.

As protests continue to take place across our nation, more Americans are beginning to publicly demand action from their local, state and federal leaders to end the policies and practices that promote, enable and drive systemic racial injustice. In these conversations about policy solutions, many will include in their demands an ending to the war on drugs—or, at a minimum, an ending to marijuana criminalization. But while ending cannabis prohibition is both important and necessary, we must also recognize that doing so is but a single piece of a much larger puzzle.

Will legalizing marijuana reform alone solve the problem of racial injustice? No.

Is ending cannabis prohibition going to fix all of America’s social ills? No.

After we legalize adult-cannabis use, will we see an end to discriminatory policing against communities of color and other marginalized groups? No.

Will end marijuana prohibition be a small step toward the greater goal of promoting justice? Without a doubt, yes.

And the majority of Americans agree.

Our decades-long prohibition of marijuana was founded upon racism and bigotry. Look no further than the sentiments of its architect, Harry J. Anslinger, Commissioner of the Federal Bureau of Narcotics, who declared: “[M]ost [marijuana consumers in the US] are Negroes, Hispanics, Filipinos and entertainers. … [M]arijuana causes white women to seek sexual relations with Negroes. … Reefer makes darkies think they’re as good as white men.”

These racial biases were later exploited by the Nixon administration when it ramped up the drug war in 1970 and declared cannabis to be “public enemy #1.” As former Nixon adviser John Ehrlichman later acknowledged: “The Nixon campaign in 1968, and the Nixon White House after that, had two enemies: the antiwar left and black people. You understand what I’m saying? We knew we couldn’t make it illegal to be either against the war or black, but by getting the public to associate the hippies with marijuana and blacks with heroin, and then criminalizing both heavily, we could disrupt those communities. We could arrest their leaders, raid their homes, break up their meetings, and vilify them night after night on the evening news. Did we know we were lying about the drugs? Of course we did.”

Today, the modern era of marijuana prohibition continues to be disproportionately applied. Annually, over 650,000 Americans are arrested for violating marijuana laws. Yet, according to an analysis of these arrests released earlier this year by the ACLU, “In every single state, Black people were more likely to be arrested for marijuana possession, and in some states, Black people were up to six, eight, or almost ten times more likely to be arrested. In 31 states, racial disparities were actually larger in 2018 than they were in 2010.”

Of course, marijuana prohibition isn’t the sole cause of America’s racial inequities, nor is it the sole reason why certain members of the police continue to engage in racially-aggressive policing and misconduct. But its criminalization is one of the tools commonly used to justify and perpetuate these injustices.

For example, marijuana enforcement was the pretext in the fatal law enforcement shooting of another Minnesotan just a few years before George Floyd’s murder: Philando Castile. The officer in this case alleged that he feared for his life simply because he believed that Mr. Castille had been smoking marijuana, stating: “I thought I was gonna die. And I thought if he’s, if he has the guts and the audacity to smoke marijuana in front of the 5-year-old girl and risk her lungs and risk her life by giving her secondhand smoke and the front seat passenger doing the same thing then what, what care does he give about me. And, I let off the rounds and then after the rounds were off, the little girl was screaming.”

Even in those jurisdictions where adult-use cannabis is legal, we know that there still remains much work to be done to address continuing racial inequities. For instance, African Americans and Latinos continue to disproportionately be targeted for traffic stops in Colorado and Washington even after legalization.

Then there is the question of the cannabis industry itself. We advocates need to continue to push for inclusion and equity within this space. We must not ignore the reality that while a handful of venture capitalists are now engaging in licensed cannabis sales in systems that largely exclude minority ownership while millions of others—most of them young, poor and people of color—continue to face arrest and incarceration for engaging in much of the same behavior.

There is no doubt that our national discussion over matters of race and policing will continue long after these public protests have ceased. NORML believes that calls for cannabis legalization need to be an important part of this emerging discussion—but only a part. Black and brown lives matter and we owe it to our country and to ourselves to take tangible steps toward dismantling many of the power structures that perpetuate injustice. Marijuana prohibition is simply one of them.

We are at a crossroads in this country and it is time for all of us to march as allies in the fight for racial justice and equality. It is important during this process for those of us not from these marginalized communities to truly listen to those who are facing this oppression and support them in this struggle. Let us take this moment in time to pledge to put in the work necessary in order to make America the better and more just nation that we know it can be.

Erik Altieri is executive director of NORML.

Cory Booker Cites Marijuana Enforcement As Example Of Racial Injustice That Is Motivating Protests

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