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Senate Hearing Represents A Step Toward Providing Marijuana Banking Access

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A key Senate committee met on Tuesday to discuss legislative fixes that would allow banks to service state-legal marijuana businesses without the risk of being penalized by federal financial regulators, and the chair of the panel concluded that “a case has been made pretty strongly here” that the issue must get resolved but that it’s a “very important and complex issue that we need to get right.”

The Senate Banking, Housing and Urban Affairs Committee, chaired by Sen. Mike Crapo (R-ID), announced the hearing last week, which took some advocates by surprise given the senator’s previous statement that he wouldn’t commit to examining the cannabis financial services issue while the federal government still regarded marijuana as a controlled substance.

A bipartisan bill—the Secure And Fair Enforcement (SAFE) Banking Act—was a main focus of the conversation. The House version of the legislation cleared that chamber’s Financial Services Committee in March, and while advocates hoped it would go before the full chamber ahead of the August recess, expectations have shifted toward the fall for floor action.

When a Marijuana Moment reporter asked Crapo after the hearing if he’s spoken to Senate Majority Leader Mitch McConnell (R-KY) about the bill, the chairman replied that he’s “spoken to almost all of our colleagues about this.”

In response to questions from other reporters about next steps, he said that the committee is “trying right now to see if we can find a way to address the various issues” ahead of a potential markup on the cannabis banking legislation and that he doesn’t “intend to hold additional hearings on the issue.”

Sen. Sherrod Brown (D-OH), ranking member of the panel, said in his opening remarks at the hearing that “the legal cannabis industry is one of the fastest growing in the United States and employs hundreds of thousands of people.”

“No matter how you feel about marijuana itself, we have a duty to look about for the workers who work in this industry and the communities they represent,” he said.

Witnesses who testified before the Senate committee included SAFE Banking Act sponsors Sens. Cory Gardner (R-CO) and Jeff Merkley (D-OR), Credit Union National Association (CUNA) representative Rachel Pross, American Bankers Association (ABA) representative Joanne Sherwood, Smart Approaches To Marijuana (SAM) Vice President of Government Affairs Garth Van Meter and LivWell Enlightened Health CEO John Lord.

Watch the Senate’s marijuana banking hearing below:

Advocates argue that providing banking access to cannabis businesses will increase financial transparency and mitigate safety risks, since such companies are currently largely forced to operate on a cash basis that makes them targets of crime.

Gardner said in his testimony that “the states are leading on this issue, and the federal government has failed to respond. It has closed its eyes and plugged its ears and pretended the issue will go away. It won’t.”

“Keeping those dollars out of banks means we lose the ability to trace where the dollars go,” he added. “It also makes it harder to ensure all taxes are being paid. It makes it easier for criminals in the illicit market to pose as legitimate. And it leaves hundreds of millions of dollars of cash in the state.”

He recognized during the hearing that this “is a difficult hearing, a difficult topic. I know that.”

“But we were sent here to deal with the difficult topics,” he said. “It’s an important step forward. First hearing we’ve had on this issue as the federal government wakes up to the reality that the cannabis issue is not going to go away and we must have action.”

Following the hearing, Gardner told reporters that he was confident that there’s enough support in the Senate to pass not only the SAFE Banking Act but also another bipartisan bill he is cosponsoring to allow states to set their own cannabis policies without the risk of federal interference.

“[I]t would pass with majority support and I think it would have a majority of Republicans voting for it as well,” he said.

Notably, the senator told Marijuana Moment that he speaks to McConnell “constantly” about cannabis issues, as recently as Monday.

“If they want me to shut up then they can just pass this and the STATES Act and that’s the way I’ll shut up,” he said, referring to the banking and broader states’ rights bills.

But GOP attendance at the meeting was lacking overall, with only Crapo and Gardner appearing from the majority, raising questions about the extent to which Senate Republicans are interested in advancing cannabis banking legislation.

Merkley said in his testimony that the “lack of availability of financial services for cannabis-related businesses in states where it is legalized has created a scenario where businesses are forced to operate in all cash, leading to unsafe environments for all parties involved.”

“Financial institutions support legal clarity and certainty and a legislative hearing would provide an opportunity to address outstanding questions and ensure a better understanding of the proposed bipartisan legislation,” he said, adding that he hopes the hearing “will give members the opportunity to hear directly from witnesses who have direct experience with the challenges facing the financial sector, the cannabis industry, and law enforcement.”

During the hearing, Merkley said there’s “nothing good about forcing the world to operate on cash.”

“It is an invitation to money laundering. It is an invitation to organized crime. It is an invitation to robbery. It is an invitation to cheat on your taxes or cheat your employees,” he said. “Let’s fix this. Let’s honor the states’ rights vision of all of the states that have said this makes sense here in our location for our citizens.”

“Although the SAFE Banking Act does not cure all of the cannabis-related banking challenges, it would help the 33 states that have legalized cannabis in some form to make their communities safer, collect their taxes, and regulate their cannabis markets effectively,” Sherwood, who is president and CEO of Citywide Banks, said in written testimony on behalf of ABA. “It would also help banks and their customers in states without legal cannabis regimes by addressing the unintended consequences for unrelated businesses that provide products and services to the cannabis industry, their employees or service providers, without undermining each state’s ability to prohibit cannabis sales and use within their borders.”

The Oregon senator also introduced into the record more than 100 stories from people who have been affected by the lack of marijuana industry banking access.

Pross, chief risk officer for Maps Credit Union, said that her association does “not have a position on the federal legalization of cannabis” but that “many credit unions operate in states and communities that have made cannabis usage or growth legal for medicinal and/or recreational purposes” and that CUNA strongly believes that “financial institutions should be permitted to lawfully serve businesses that engage in activities that are authorized under their state laws, even when such activity may be inconsistent with federal law.”

“On behalf of America’s credit unions and their 115 million members, we urge both Congress and the Administration to work towards turning this legislation into the law and providing financial institutions with the certainty needed to better serve our communities.”

Prohibitionist group SAM’s Van Meter said that members of the committee were being tasked with addressing “whether we want to promote and increase drug use during an addiction crisis or discourage drug use and help people find recovery and healing” by debating whether to provide access to banking to cannabis businesses.

“By skipping ahead to a technicality over banking rules, the marijuana industry is hoping to gain many of the benefits of federal legalization without a debate over the public health effects,” he said in testimony.

Attached to SAM’s submission is a letter expressing concern about the potential consequences of passing the SAFE Banking Act, signed by former heads of the Drug Enforcement Administration and Office of National Drug Control Policy.

Sen. Brian Schatz (D-HI) spoke about research barriers for marijuana, noting that he cosponsored bipartisan legislation introduced last week that would address the issue alongside Sens. Chuck Grassley (R-IA) and Dianne Feinstein (D-CA).

Van Meter jumped in to say that “if the marijuana industry was concerned about research, then I don’t think they would be selling some of these extremely high potency” products.

“Well hang on, I’m concerned about research,” Schatz said. “I’m going to allow you to answer the questions, but I’m not going to allow you to take a pot shot at the people that you’re testifying with.”

Lord, who is chairman of the industry association Cannabis Trade Federation, said that “due to the significant compliance costs associated with serving cannabis customers under existing policies, financial institutions charge cannabis businesses substantial monthly fees.”

“Our company pays in excess of $3,000 per month for the mere privilege of having an account,” he said of LivWell Enlightened Health. “The current situation is especially challenging for small businesses. While we, due to our size, are able to absorb the additional costs associated with cash management and exorbitant bank fees, many small businesses are not.”

“Furthermore, resolving the banking issue could significantly aid cannabis businesses in securing business loans. This is critical to small business owners who may not have access to other sources of capital. It should be noted that these small businesses are also being squeezed by Section 280E of the Internal Revenue Code, which prevents all cannabis companies from deducting standard business expenses when they calculate their taxes. If there is any hope in helping small businesses – including minority—and women-owned companies—survive and thrive, we must fix the banking situation and amend Section 280E so that cannabis businesses are taxed like any other business.”

Sen. Bob Menendez (D-NJ) discussed challenges that cannabis businesses face in securing loans and touted separate legislation he introduced on Monday that would give such companies access to insurance.

Sen. Tina Smith (D-MN) argued that federal marijuana reform should not stop at banking access.

“I think we need to realize that as we’re looking at criminal penalties for involvement of businesses with marijuana, we can’t forget the thousands of individuals who have spent time behind bars for their involvement with marijuana,” she said. “Communities of color, particularly African-American men, have paid a disproportionate price for generations of aggressive enforcement of marijuana laws.”

Brown, the ranking Democrat, made a similar point, saying that the financial services hearing is “just one piece of the conversation Congress must have on marijuana policy.”

“People should not be thrown in jail or have their futures jeopardized by a criminal record over non-violent marijuana offenses,” he said.

Other topics brought up during the meeting include the lack of access to financial services for hemp businesses since the crop was federally legalized under the 2018 Farm Bill, barriers to marijuana research and how providing banking access to the industry can help regulators better identify illicit financial activity.

Banking associations representing all 50 states have voiced support for the SAFE Act. Other advocates for a legislative resolution to the banking issue include a coalition of 20 bipartisan governors, the National Association of State Treasurerstop financial regulators in 25 statesand a majority of state attorneys general.

On the House side, the legislation has 206 cosponsors. The bill has 31 cosponsors in the Senate.

The banking hearing marks the sixth congressional hearing on marijuana policy this Congress, including a historic meeting of the House Judiciary Crime, Terrorism and Homeland Security Subcommittee on pathways to end the federal prohibition of cannabis. Another committee is scheduled to discuss hemp production on Wednesday.

Aaron Houston contributed reporting for this story from Washington, D.C.

Senate Schedules Second Cannabis Hearing For Next Week

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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Sixth Minnesota House Committee Approves Marijuana Legalization Bill On Its Path To The Floor

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A bill to legalize marijuana in Minnesota is going through a thorough vetting process, with a sixth House committee on Wednesday giving the reform proposal a green light following a hearing.

House Majority Leader Ryan Winkler (D), Speaker Melissa Hortman (D) and other lawmakers filed the measure in February. It would allow adults 21 and older to purchase and possess up to 1.5 ounces of cannabis and cultivate up to eight plants, four of which could be mature.

Days after a separate panel approved the legislation with amendments, the House Judiciary Finance and Civil Law Committee passed it in a 9-7 vote.

“The purpose of House File 600 is to eliminate the harm that cannabis has in our society,” Winkler said of the bill at the hearing. “The primary harm that cannabis poses in Minnesota is the prohibition and criminal enforcement of cannabis.”

“The goal of House File 600 is to shift in a legal marketplace that is policed and over-policed disproportionately and instead to create a policy of repair, an opportunity for those most adversely affected by the war on drugs,” he said.

The House Environment and Natural Resources Finance and Policy Committee was the last body to approve the bill, on Monday, and members there adopted a number of changes to the proposal. For example, it now stipulates that members of a cannabis advisory council established under the bill could not serve as lobbyists while on the panel and for two years after they end their service.

Before that hearing, the House Agriculture Finance and Policy Committee, the Workforce and Business Development Finance and Policy Committee, the Labor, Industry, Veterans and Military Affairs Finance and Policy Committee and the Commerce Finance and Policy Committee each advanced the measure.

Its next stop is the State Government Finance and Elections Committee.

Winkler recently said that he expects the legislation to go through any remaining panels by the end of April, with a floor vote anticipated in May.


Marijuana Moment is already tracking more than 900 cannabis, psychedelics and drug policy bills in state legislatures and Congress this year. Patreon supporters pledging at least $25/month get access to our interactive maps, charts and hearing calendar so they don’t miss any developments.

Learn more about our marijuana bill tracker and become a supporter on Patreon to get access.

Still, even if the legislation does make it all the way through the House, it’s expected to face a significant challenge in the Republican-controlled Senate, where lawmakers have signaled that they’re more interested in revising the state’s existing medical cannabis program than enacting legalization of adult use.

After the New York legislature approved a recreational cannabis legalization bill—which the governor promptly signed into law—Winkler said that Minnesota is “falling behind a national movement towards progress.”

“MN has some of the worst criminal justice disparities in the country, and legalizing cannabis & expunging convictions is a first step towards fixing that,” he tweeted.

The majority leader’s bill as introduced was identical to a proposal he filed last year, with some minor technical changes. Winkler, who led a statewide listening to gather public input ahead of the measure’s introduction, called it the “best legalization bill in the country” at the time. It did not advance in that session, however.

Under the legislation, social equity would be prioritized, in part by ensuring diverse licensing and preventing the market from being monopolized by corporate players. Prior marijuana records would also be automatically expunged.

On-site consumption and cannabis delivery services would be permitted under the bill. And unlike in many legal states, local municipalities would be banned from prohibiting marijuana businesses from operating in their areas.

Retail cannabis sales would be taxed at 10 percent. Part of that revenue would fund a grant program designed to promote economic development and community stability.

The bill calls for the establishment of a seven-person Cannabis Management Board, which would be responsible for regulating the market and issuing cannabis business licenses. It was amended in committee month to add members to that board who have a social justice background.

People living in low-income neighborhoods and military veterans who lost honorable status due to a cannabis-related offense would be considered social equity applicants eligible for priority licensing.

Cannabis retails sales would launch on December 31, 2022.

Gov. Tim Walz (D) is also in favor of ending marijuana prohibition, and in January he called on lawmakers to pursue the reform as a means to boost the economy and promote racial justice. He did not include a request to legalize through his budget proposal, however.

Walz did say in 2019 that he was directing state agencies to prepare to implement reform in anticipation of legalization passing.

Winkler, meanwhile, said in December that if Senate Republicans don’t go along with the policy change legislatively, he said he hopes they will at least let voters decide on cannabis as a 2022 ballot measure.

Heading into the 2020 election, Democrats believed they had a shot of taking control of the Senate, but that didn’t happen.

The result appears to be partly due to the fact that candidates from marijuana-focused parties in the state earned a sizable share of votes that may have otherwise gone to Democrats, perhaps inadvertently hurting the chances of reform passing.

In December, the Minnesota House Select Committee On Racial Justice adopted a report that broadly details race-based disparities in criminal enforcement and recommends a series of policy changes, including marijuana decriminalization and expungements.

Alabama Medical Marijuana Bill Moves Closer To Floor Vote With House Committee Action

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Alabama Medical Marijuana Bill Moves Closer To Floor Vote With House Committee Action

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An Alabama House committee on Wednesday amended a medical marijuana legalization bill that already passed the Senate. Members also took public testimony in advance of an expected Thursday vote to send the revised legislation to the House floor.

This hearing of the House Health Committee comes one week after a separate panel in the body amended and cleared the bill.

Sponsored by Sen. Tim Melson (R), the legislation would allow people with qualifying conditions to access cannabis for therapeutic purposes. The full Senate approved the bill last month.

“I just want to take [cannabis] to the patients that need it. I want to see people get relief,” the senator said at the meeting. He also made the case that allowing legal access can mitigate opioid overdose deaths.

Melson is the same lawmaker who sponsored similar legislation that was approved by the full Senate last year but which later died without any House votes amid the coronavirus pandemic.

This latest proposal would establish an Alabama Medical Cannabis Commission to implement regulations and oversee licensing.

To qualify for the program, patients would have to be diagnosed with one of about 20 conditions, including anxiety, sleep disorders, post-traumatic stress disorder and intractable pain. Regulators would not be able to independently add additional conditions, leaving that decision up to lawmakers.

The House Judiciary Committee approved 10 amendments to the legislation during last week’s hearing. For example, members agreed to scrap provisions providing reciprocity for out-of-state patients and reducing the percentage of marijuana tax revenue that would go to cannabis research from 30 to 15 percent.

Those amendments were integrated into a new substitute version of the bill adopted by the Health panel, with additional revisions such as removing anxiety and adding depression and Parkinson’s disease as qualifying conditions for medical cannabis. The committee voted to accept the substitute version for consideration before going into testimony.

Time was evenly divided between supporters and opponents. By and large, the conversation revolved around personal anecdotes about the medical benefits and risks of marijuana.

More amendments were added following the testimony. One change would add an annual registration fee for physicians who recommend cannabis. Another would give the state attorney general’s office access to a patient registry database.


Marijuana Moment is already tracking more than 900 cannabis, psychedelics and drug policy bills in state legislatures and Congress this year. Patreon supporters pledging at least $25/month get access to our interactive maps, charts and hearing calendar so they don’t miss any developments.

Learn more about our marijuana bill tracker and become a supporter on Patreon to get access.

Members further approved an amendment to remove fibromyalgia and menopause from the list of qualifying conditions and another to expand the number of institutions that are eligible for grants to research marijuana. A revision to develop a uniform flavor for all cannabis products was also accepted.

Additionally, an amendment was approved to require dispensaries to have 24-hour security cameras operating in their facilities. These changes are all being added to a new substitute that the panel will take up and vote on Thursday.

Because the proposal has been amended, it would go back to the Senate for final consideration if it’s passed in the House before being sent to the governor’s desk.

Advocates say they’re encouraged that medical cannabis reform is advancing in Alabama, but they’ve raised concerns about a number of aspects of the bill.

One problematic provision, advocates say, is that patients with chronic or intractable pain could only be recommended medical marijuana in cases where “conventional therapeutic intervention and opiate therapy is contraindicated or has proved ineffective.”

The bill also prohibits raw cannabis, smoking, vaping and candy or baked good products. Patients would instead be allowed to purchase capsules, lozenges, oils, suppositories and topical patches.

Patients would be allowed to purchase and possess up to “70 daily dosages of medical cannabis.” Under an amendment approved on the Senate floor, the maximum daily dose was reduced from 75 to 50 milligrams. However, the amendment’s sponsor said it could be increased to 75 milligrams in some circumstances.

The revision also calls for a label on marijuana products to indicate that cannabis can cause drowsiness.

It also calls for a nine percent gross proceeds tax on medical marijuana sales.

Patients, caregivers and and medical cannabis businesses would receive legal protections under the proposal, preventing them from being penalized for activities authorized by the state.

For physicians to be able to recommend cannabis to patients, they would have to complete a four-hour continuing education course and pass an exam. The course would cost upwards of $500 and doctors would also be required to take refresher classes every two years.

Under the bill, regulators would be tasked with developing restrictions on advertising and setting quality control standards. Seed-to-sale tracking and laboratory testing would be mandated.

Other changes approved in the Senate would add language to stipulate that gelatinous cannabis products cannot be sugar coated and insert provisions promoting good manufacturing practices and tamper-evident packaging.

Applications for cannabis business licenses would have to be accepted starting September 1, 2022 and then proceeded within 60 days.

The commission would be required to approve at least four cultivators, up to four processors, up to four dispensaries for the first year of implementation (more could be approved after that point depending on demand) and as many as five vertically integrated operators.

This bill’s reintroduction has been greatly anticipated by advocates. The Senate approved a separate medical cannabis bill in 2019, but the House later severely compromised it. The legislation as enacted would not have legalized patient access; rather, it set up a study commission to explore the issue and make recommendations.

The commission came back with its report in December 2019, with members recommending that medical marijuana be legalized.

There could be additional pressure on the legislature to enact legalization given that voters in neighboring Mississippi approved a medical cannabis reform initiative during the November election.

Separately, the Alabama Senate Judiciary Committee approved a bill last month to decriminalize possession of up to two ounces of cannabis, making it punishable by a $250 fine without the threat of jail time.

Majority Of Connecticut Residents Back Marijuana Legalization And Expungements, Poll Finds As Reform Bills Advance

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Former Gov. Rick Perry Urges Texas Lawmakers To Pass Psychedelics Study Bill

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“All of that properly done in the right type of clinical setting will save a multitude of lives,” Perry said. “I’m convinced of it. I have seen it enough of these young men.”

By Patrick Svitek, The Texas Tribune

Rick Perry, in a rare return to policy debates in Austin, is teaming up with a Democratic state lawmaker to push for psychedelic drug therapy for veterans struggling with post-traumatic stress disorder.

The former Republican governor is throwing his support behind a bill by state Rep. Alex Dominguez, D-Brownsville, that calls for a clinical study of psilocybin—the active ingredient in “magic mushrooms”—to treat PTSD in veterans.

“To me, this may be one of the most hopeful pieces of legislation that the members of the Legislature have the opportunity to consider this session,” Perry said in an interview Tuesday.

Some studies have suggested that psilocybin could be safe and effective in treating mental health disorders like depression, while calling for larger studies with more thorough methods.

Perry said he has “historically been a very anti-drug person” and still firmly opposes legalization for recreational uses. However, he said he has seen through his longtime advocacy for veterans how psychedelic drugs can provide relief to former service members who have exhausted other options — and are traveling to other countries, like Mexico, to receive treatment.

“All of that properly done in the right type of clinical setting will save a multitude of lives,” Perry said. “I’m convinced of it. I have seen it enough of these young men.”

Perry is set to join Dominguez for a news conference on his proposal Wednesday morning at the state Capitol. The news conference will also be attended by veterans that Perry has gotten close to over the years, including retired Navy SEAL Morgan Luttrell and Dakota Meyer, a Marine veteran and Medal of Honor recipient.

Dominguez’s House Bill 1802 would direct the Health and Human Services Commission to conduct the clinical study of psilocybin in partnership with a health sciences university and a Veterans Affairs hospital. The proposal would also ask HHSC to do a literature review—a survey of prior studies—of using not just psilocybin but also MDMA and ketamine to treat PTSD in veterans.

HHSC would have to submit quarterly progress reports on its study, and it would have a deadline of Dec. 1, 2024, to deliver final findings to the the so-called “Big Three”—the governor, lieutenant governor and House speaker—as well as members in both chambers.

The bill was referred to the House Public Health Committee last month but has not received a hearing yet.

Texas has largely avoided loosening its drug laws in recent years as a growing number of states have legalized marijuana for recreational use. The state has legalized marijuana with limited levels of THC—the psychoactive ingredient in marijuana that makes people feel high—for people with certain debilitating illnesses, but eligibility is limited and relatively few people have signed up.

Noting the influence that the Big Three could have if they get behind a proposal, Perry said he’s talked with the offices of Gov. Greg Abbott and Lt. Gov. Dan Patrick and that the speaker’s office has been briefed on it. He added that he is hoping that Republicans can “get comfortable [that], ‘Hey, this is not some recreational drug thing,'” but a life-changing treatment for veterans when handled carefully.

Dominguez said in an interview that he has found that colleagues on both sides of the aisle are “very supportive” of studying the issue.

“I think in general we’re supportive of veterans issues and certainly there’s maybe a generational discussion to be had… But I found most members want to hear the science,” Dominguez said, emphasizing the study would go through a “controlled process” and that there would be “a number of safeguards in place to make sure that nobody abuses this and we learn the efficacy.”

The lawmaker said his interest in the issue comes from his time as a prosecutor in Cameron County, which set up a veterans treatment court in 2014.

Perry has largely stayed out of state legislative matters since leaving office in 2015, unsuccessfully running for president in 2016 and then joining former President Donald Trump’s Cabinet as energy secretary. He stepped down as energy secretary in late 2019.

But Perry is not unfamiliar with the Legislature, though, and particularly the House. He served there from 1985 to 1991—first as a Democrat and then as a Republican.

This article originally appeared in The Texas Tribune.

With State Law Against Drug Possession Overturned, Washington Governor Frees 15 People From Prison

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