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Voters In Two States Nominate Marijuana Legalization Supporters for Governor

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Tuesday’s primary elections brought in a wave of Democratic gubernatorial candidates who’ve endorsed marijuana legalization—from Maryland to Colorado.

Here’s a breakdown of where the gubernatorial primary winners stand on cannabis.

Maryland

Democratic winner: Ben Jealous, former NAACP president

Jealous campaigned as a progressive, pro-legalization candidate for governor, earning him the endorsements of Sen. Bernie Sanders (I-VT) and Kamala Harris (D-CA), among others. He spoke to Marijuana Moment earlier this month about how comedian Dave Chappelle first put the idea of legalization in his head—and how his stance on cannabis reform further evolved after studying racial disparities in marijuana enforcement as well as the economic potential of full legalization. Jealous told Marijuana Moment that, if elected governor, he would use tax revenue from a legal cannabis retail system to fund universal pre-k education throughout Maryland.

“We know that we have to end mass incarceration—and yet go further,” he said. “We have to really get back to opening up the gates of opportunity for all of our children. And by legalizing cannabis, we get to make progress on both fronts.”

Every single Democratic gubernatorial candidate in Maryland backed legalization during the primary, The Baltimore Sun reported, but Jealous seemed to focus on it more than most other major contenders.

Republican winner: Larry Hogan, incumbent governor

Hogan hasn’t taken an official stance on full marijuana legalization and, notably, declined to respond to a question about whether he felt voters should be entrusted to make that decision as part of a state referendum last year.

Just ahead of the primary election this week, however, Hogan said that “[a]t this point, I think it’s worth taking a look at” in reference to full legalization.

“I was for medical cannabis. I want to make sure we’re off to the right start and we look at every aspect of the issue.”

The governor signed a bill last month that expanded Maryland’s medical marijuana program. The legislation called for increased licenses for cannabis processors and growers; it was also designed to resolve the lack of diversity among individuals and businesses that receive these licenses.

Colorado

Democratic winner: Jared Polis, U.S. representative

The sitting congressman has made a concerted effort to distinguish his support for marijuana reform from his competitors as well as the state’s incumbent Democratic governor, John Hickenlooper. He emphasized the need to protect the state’s recreational cannabis program from federal interference in an interview with Marijuana Moment, saying that, as governor, he “would make sure that we would not cooperate from the state-level and that state law enforcement resources were not used and information was not shared with any federal agent going after a legal, constitutionally protected Colorado activity.”

Polis, who has consistently championed cannabis bills and amendments in Congress, also vowed to approve legislation that would facilitate investments in the state’s marijuana program and expand the list of conditions that qualify patients for medical cannabis to include those on the autism spectrum—measures that Hickenlooper recently vetoed, much to the chagrin of legalization advocates.

The nominee has argued that the state’s regulated marijuana program provides valuable economic resources and that cannabis may serve as a viable alternative to dangerous and addictive opioids for pain patients.

Pro-legalization advocacy group, NORML endorsed Polis in May.

“The results from the Democratic Gubernatorial Primary are not just a victory for Jared Polis and supporters of sensible marijuana policy, they are a victory for anyone who believes that our prohibition on marijuana was a failure and that states should be free to set their own policies when it comes to cannabis, free from federal incursion,” NORML PAC executive director Erik Altieri said in a press release on Tuesday.

“Jared Polis has been the preeminent champion for ending our nation’s failed federal prohibition on marijuana while in Congress and an unrelenting force in standing up for Colorado’s legalization and medical marijuana laws. Just as he has always stood and fought by our side against federal prohibition, we will continue to fight for Jared Polis until he takes his rightful place in the governor’s mansion.”

Republican winner: Walker Stapleton, Colorado treasurer

Stapleton hasn’t gone on the record fully embracing the state’s recreational marijuana program, but he stood out among his Republican gubernatorial competition by disagreeing with the notion of advancing an agenda to repeal Colorado’s legal marijuana law, Amendment 64. He’s also acknowledged marijuana’s medical benefits.

“There have been a lot of unintended consequences that have come with legalization of marijuana,” Stapleton told Westword. “I don’t think a repeal is a realistic option, so as governor, I will work with the industry and stakeholder groups to make this work.”

“We need to have better guardrails in place to keep it out of the hands of children and to address some of the unintended consequences we have seen develop,” he said.

Oklahoma

Democratic winner: Drew Edmondson, former Oklahoma attorney general

The former state attorney general said that he supported earlier legislation that reduced criminal penalties for marijuana possession and said he would also support State Question 788—an initiative to legalize medical marijuana in Oklahoma that passed on Tuesday.

However, Edmondson stopped short of embracing full legalization. He told Tulsa World that he believes “it is too early for full legalization in Oklahoma, but we do have the benefit of observing the long-term effects in Colorado and other states.”

Republican winner: Mick Cornett, Oklahoma City mayor

Cornett hasn’t said much about his personal views about marijuana reform on the record, but a spokesperson for the mayor told The Associated Press that “[o]ne of the strengths of Oklahomans is their willingness to help people,” in reference to a bill to legalize medical cannabis in the state, which passed on Tuesday.

“If this ballot measure can help Oklahomans, it is likely to pass.”

Cornett’s Republican competitor, Oklahoma Lt. Gov. Todd Lamb, was decidedly opposed to the legalization initiative, arguing that it was “poorly written and will create a host of societal problems.”

South Carolina

Republican winner: Henry McMaster, incumbent governor

Last year, McMaster, who won a runoff election on Tuesday night, said flatly that he believed it was “a bad idea to legalize marijuana” and that he doesn’t “think it’s healthy.”

It was unclear whether the governor was describing his stance on full, adult-use legalization or if he considered medical cannabis reform an exception, however.

South Carolina Rep. James Smith (D), who became the Democratic gubernatorial primary nominee earlier this month, said he supported medical cannabis and co-sponsored a piece of legislation to legalize a medical program.

These States Will Probably Vote On Marijuana In 2018

Photo courtesy of Democracy Chronicles.

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.

Politics

Marijuana Banking Bill Would Save Federal Money, Congressional Budget Office Says

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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.

Via CBO.

“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.

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.

Federal Small Business Administration Pressed On Supporting Marijuana Industry

This story was updated to include comment from Perlmutter and Correia.

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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Federal Small Business Administration Pressed On Supporting Marijuana Industry

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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.

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.

GOP Congressman Exposes Flaws In VA Marijuana Research Projects

Photo courtesy of Brian Shamblen.

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GOP Congressman Exposes Flaws In VA Marijuana Research Projects

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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.

Trump Official Would Rather Discuss Marijuana Than President’s Tax Returns, He Says

Photo courtesy of YouTube.

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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