Rep. Eric Swalwell (D-CA) joined the ranks of 2020 Democratic presidential hopefuls on April 8 and later suspended his bid on July 8.
The congressman, a former prosecutor who sits on the House Judiciary Committee, endorsed California’s adult-use legalization measure prior to its passage in 2016 and has cosponsored numerous pieces of cannabis legislation on Capitol Hill, including bills to end federal marijuana prohibition. His record on the issue earned him an “A+” grade from NORML.
This piece was last updated on July 8, 2019 to include the candidate’s statements and policy actions on marijuana since joining the race.
Legislation And Policy Actions
While Swalwell has not been the lead sponsor of any cannabis bills, he’s put his name on several wide-ranging proposals as a cosponsor since joining Congress in 2013.
On several occasions, he signed on to legislation that would federally deschedule marijuana or otherwise shield state legalization laws from federal interference. He also cosponsored a more far-reaching bill to deschedule cannabis while also setting aside funding for expungements and to support women- and minority-owned marijuana businesses.
On a more incremental level, he supported legislative efforts to protect states that have legalized medical cannabis from federal intervention. He also signed on to a bill to let defendants in federal court cases introduce evidence of their state-legal medical cannabis activity as a defense.
Swalwell cosponsored bills to secure banking access for state-legal marijuana businesses, to allow the U.S. Department of Veterans Affairs (VA) to study medical cannabis for veterans, to impose an excise tax on marijuana sales, to exempt real property from civil asset forfeitures for medical cannabis activity in compliance with state law and to increase the number of federally authorized marijuana manufacturers for research purposes.
Besides his bill cosponsorships, Swalwell has also voted in favor of floor amendments to shield medical cannabis from federal enforcement in 2014 and 2015. He voted for similar amendments to extend that protection to adult-use and CBD-only states in 2015.
Other amendments he’s supported include ones that would allow doctors at the VA to recommend medical cannabis, others to prevent the Justice Department from using its resources to interfere with state-legal hemp markets and one to provide banking access to legitimate marijuana businesses.
The congressman was absent for 2019 floor votes on measures to protect all state marijuana laws from federal interference and remove roadblocks to research on Schedule I substances such as cannabis and psychedelic drugs.
In 2014, Swalwell signed a bipartisan letter to President Barack Obama imploring him to direct the attorney general to remove marijuana from Schedule I of the Controlled Substances Act. He made the same request, along with 13 other members of Congress, in a spearate 2016 letter to Obama. He also asked Obama to lift barriers to marijuana research in a 2016 letter and, in 2018, requested that the president select a DEA head who is willing to “set drug enforcement priorities that make sense within the evolving landscape of state marijuana laws.”
— Rep. Eric Swalwell (@RepSwalwell) May 2, 2015
The congressman joined colleagues in a separate letter in 2015, urging House and Appropriations Committee leadership to support an amendment that would shift money from the Drug Enforcement Administration (DEA) marijuana eradication fund to three unrelated accounts.
He was also part of large coalitions that sent a letters to House leaders in 2017 and 2018 asking them to maintain protections from federal intervention for states that have legalized medical cannabis.
— Rep. Eric Swalwell (@RepSwalwell) January 16, 2018
After then-Attorney General Jeff Sessions rescinded Obama-era guidance on marijuana enforcement priorities for U.S. attorneys, Swalwell and 11 other House members sent a letter requesting a hearing on the cannabis policy change.
“We fear that the elimination of the Obama Administration’s marijuana enforcement guidance will promote an inefficient use of limited taxpayer resources and subvert the will of voters who have clearly indicated a preference for legalized marijuana in their states,” the lawmakers wrote.
Finally, in October 2018, Swalwell and others sent a letter to Sessions and the then-acting administrator of the DEA, questioning how the Trump administration can pursue a “buy American” agenda while blocking the domestic production of marijuana for research purposes.
Why are we importing #cannabis from Canada for research while the @DEAHQ isn’t acting on more than two dozen U.S. cannabis manufacturer applications? @RepMattGaetz and I are leading a bipartisan effort to find out. #BuyAmerican pic.twitter.com/lvR2LYyigY
— Rep. Eric Swalwell (@RepSwalwell) October 1, 2018
On The Campaign Trail
Swalwell praised Nevada’s marijuana legalization law during a campaign visit in May, saying the state is “doing a great job.”
“I want to have a country where it is legalized everywhere and patients can benefit as they are suffering from different diseases,” he said.
During a CNN town hall event in June, Swalwell spoke about his support for decriminalizing and rescheduling cannabis and expunging the records “of anyone who had a marijuana conviction in the past.”
He included his support for legalizing marijuana in a tweet criticizing the 1994 Crime Bill and calling for additional criminal justice reforms.
I was 13 when the 1994 Crime Bill was passed. Millions others affected by it weren’t even born. How about we stop living in the past and do something NOW about its effects?
✅ Legalize marijuana
✅ End private prisons
✅ Send fewer people to prison
✅ Restore rights https://t.co/q6m28zTdRX
— Eric Swalwell (@ericswalwell) May 29, 2019
Quotes And Social Media Posts
The congressman hasn’t taken to social media to make his views on marijuana reform heard quite as often as other Democratic candidates have. But what he has said—which is mostly confined to letters covered above—has made his stance on cannabis clear.
When he voted in favor of an amendment to protect medical marijuana states from federal intervention, Swalwell wrote on Facebook that, as a former prosecutor, “I did not take this vote on medical marijuana lightly.”
“But as someone who has seen first-hand how it has helped family members struggling with chronic illness and disease, I can’t allow them or any patient to live in uncertainty,” he wrote. “I voted to stop the DEA from enforcing federal marijuana laws against states that have passed medicinal marijuana laws.”
He also spoke about his relationship to family members who use medical cannabis when he was asked about his support for California’s adult-use legalization measure in 2016.
“I’m probably the most unlikely person to support it. I was a prosecutor for seven years,” he said. “For me, I just look at where we put our resources—and I have family members who use medicinal marijuana for a medical issue they have and it certainly helps. When I look at where we put our resources, the fact that we haven’t studied it enough to know if can help more people, why not decriminalize it? Why not better control it and pass Proposition 64?”
“Scientists and health care professionals believe that keeping marijuana illegal is unjustified,” he told The Sacramento Bee. “Prosecution of marijuana violations clog our already overburdened courts and cost hundreds of millions of dollars annually to enforce.”
During a congressional hearing in 2018, Swalwell pressed the head of the DEA about what’s being done to combat youth substance misuse, which led the official to say that he doesn’t believe that cannabis is a gateway drug.
The congressman also told Politico in 2017 that he “was disappointed that the [Obama] administration didn’t seize the opportunity to end” federal marijuana prohibition.
— POLITICO Live (@POLITICOLive) May 11, 2017
Speaking about a piece of marijuana legislation that he cosponsored, Swalwell said the bill “gives states more autonomy—and gets federal authorities off the back of states like California which already have made a choice to legalize—while giving landlords and federally-insured banks much-needed clarity that they’re not violating the law by getting involved with cannabis businesses.”
“It’s time that we sort this out once and for all,” he said.
Personal Experience With Marijuana
Swalwell said in 2016 that he’s “never tried the stuff,” which “probably makes me less qualified” to endorse California’s legalization measure.
“I was such a nerd in high school,” he said, “and playing college sports you get tested all the time.”
That said, he has seen marijuana’s therapeutic benefits up close. In a video he posted on Twitter, Swalwell said he is “a family member to someone who uses cannabis for their medical condition.”
Where do I stand on the legalization of marijuana?
— Eric Swalwell (@ericswalwell) June 1, 2019
Marijuana Under A Swalwell Presidency
While marijuana reform might not be at the top of Swalwell’s agenda if he’s elected as compared to other candidates who have focused more intensely on the issue, he’s repeatedly indicated that he supports efforts to broadly end prohibition and allow states to set their own cannabis policies.
Additionally, his support for moves to increase research into medical cannabis, restrict the Justice Department from enforcing prohibition and lifting barriers to financial institutions for cannabis businesses means his platform is aligned with ongoing congressional efforts to change federal marijuana laws.
Congressman Says Marijuana Could Be Legal Sooner If Trump Stops Tweeting
The plan to federally legalize marijuana is well underway, Rep. Earl Blumenauer (D-OR) said in a new interview. But it’d be moving a lot quicker if it weren’t for distractions emanating from the president’s Twitter account, he joked.
Blumenauer gave a status update on his plan to end federal cannabis prohibition during a Sunday KATU-TV interview in which he was asked whether he felt Congress was still on track to legalize marijuana by year’s end.
“We are in really great shape. We’ve had a number of votes in the House. The things I’ve put in the blueprint are moving forward,” the congressman said, adding that the Judiciary Committee held a major hearing on legalization legislation in July.
Blumenauer issued a memo to his party’s leadership last year—which he called a “blueprint”—in which he laid out a step-by-step plan by which House committees could advance incremental cannabis legislation while building up to the eventual federal legalization of marijuana by the end of 2019.
“We’ve got things keyed up. I think there’s a great chance of doing it this Congress—maybe even this fall—depending on how crazy things get,” he said in the TV interview.
“Every time I turn around, there’s some other national catastrophe or Trump is out there with Twitter storms,” he cautioned. “It’s not a manageable situation, but the issues dealing with cannabis are on the right track.”
“We can get it wrapped up this Congress, maybe even this year.”
Watch Blumenauer’s marijuana comments, starting at about 9:35 into the video below:
While the 116th Congress is by many measures the most cannabis friendly in history, advocates hoped that reform legislation would move more expeditiously, especially in the Democratic-controlled House.
I recently spoke with @BrianWoodKATU on Your Voice Your Vote about some pressing issues: gun violence, my visit to the southern border, healthcare reform, cannabis legalization, the housing crisis, and more…https://t.co/Nb2V2a13Q4
— Earl Blumenauer (@repblumenauer) August 19, 2019
For example, a bipartisan bill that would protect banks that service marijuana businesses from being penalized by federal regulators cleared the House Financial Services Committee in March, but it didn’t get a full House floor vote before the August recess like advocates anticipated.
That said, companion legislation did get a somewhat unexpected hearing in the Senate Banking Committee even after the panel’s chair indicated it wouldn’t advance as long as cannabis remains federally illegal.
Blumenauer also said in the interview that voters are ahead of Congress on the issue, moving forward with state-level legalization efforts while legislative action on Capitol Hill crawls ahead. And beyond the U.S.’s border, the congressman mentioned that Mexico will be implementing legalization this fall.
Photo courtesy of KATU 2.
Credit Unions Can Bank Hemp Businesses, Federal Agency Announces
A federal financial agency released updated guidelines on banking in the hemp industry on Monday, following up on requests from multiple lawmakers to provide clarity on the issue.
The National Credit Union Administration (NCUA) said in its interim guidance that providing banking services to hemp businesses is allowable since the crop and its derivatives were federally legalized under the 2018 Farm Bill. The notice also emphasized the economic potential of hemp and the role credit unions can play as the industry continues to develop.
“Lawful hemp businesses provide exciting new opportunities for rural communities,” NCUA Chairman Rodney Hood said in a press release. “I believe today’s interim guidance keeps with the mission of the nation’s cooperative credit system to serve people who have been overlooked and underserved.”
“Many credit unions have a long and successful history of providing services to the agriculture sector,” he said. “My expectation is that credit unions will thoughtfully consider whether they are able to safely and properly serve lawfully operating hemp-related businesses within their fields of membership.”
Growth in hemp-related commerce will create a need for capital & financial services. Interim guidance gives #creditunions the ability to step in & provide hemp-related businesses these customary financial services. Learn more: https://t.co/otTzUt3tL7
— The NCUA (@TheNCUA) August 19, 2019
— The NCUA (@TheNCUA) August 19, 2019
In a letter sent to Sen. Michael Bennet (D-CO) last month, which the presidential candidate’s Senate office shared exclusively with Marijuana Moment, Hood noted that NCUA was “working on possible future guidance to financial institutions” but that such guidance would be subject to change depending on what regulations the U.S. Department of Agriculture (USDA) ultimately develops.
In the meantime, the new interim guidance notes that “growth in hemp-related commerce could provide new economic opportunities for some communities, and will create a need for such businesses to be able to access capital and financial services” while clarifying that credit unions “may provide the customary range of financial services for business accounts, including loans, to lawfully operating hemp related businesses within their fields of membership.”
While NCUA said that it is “generally a credit union’s business decision as to the types of permissible services and accounts to offer,” it highlighted the need to comply with the Bank Secrecy Act (BSA) and with Anti-Money Laundering (AML) requirements, in particular:
—Credit unions need to maintain appropriate due diligence procedures for hemp-related accounts and comply with BSA and AML requirements to file Suspicious Activity Reports (SARs) for any activity that appears to involve potential money laundering or illegal or suspicious activity. It is the NCUA’s understanding that SARs are not required to be filed for the activity of hemp-related businesses operating lawfully, provided the activity is not unusual for that business. Credit unions need to remain alert to any indication an account owner is involved in illicit activity or engaging in activity that is unusual for the business.
—If a credit union serves hemp-related businesses lawfully operating under the 2014 Farm Bill pilot provisions, it is essential the credit union knows the state’s laws, regulations, and agreements under which each member that is a hemp-related business operates. For example, a credit union needs to know how to verify the member is part of the pilot program. Credit unions also need to know how to adapt their ongoing due diligence and reporting approaches to any risks specific to participants in the pilot program.
—When deciding whether to serve hemp-related businesses that may already be able to operate lawfully–those not dependent on the forthcoming USDA regulations and guidelines for hemp production–the credit union needs to first be familiar with any other federal and state laws and regulations that prohibit, restrict, or otherwise govern these businesses and their activity. For example, a credit union needs to know if the business and the product(s) is lawful under federal and state law, and any relevant restrictions or requirements under which the business must operate.
“Hemp provides new opportunities for communities with an economic base involving agriculture,” the notice states. “The NCUA encourages credit unions to thoughtfully consider whether they are able to safely and properly serve lawfully operating hemp-related businesses within their fields of membership.”
“Lending to a lawfully operating hemp-related business is permissible.”
After USDA releases its rules for the hemp industry, which are expected to come ahead of the 2020 planting season, NCUA said it “will issue additional guidance on this subject.”
Senate Majority Leader Mitch McConnell, who like Bennet has also pressured federal regulators to clear up confusion around hemp banking, took credit for NCUA’s response and celebrated the new guidance.
At @senatemajldr’s request, @TheNCUA issues guidance to assist legal #hemp industry. Hearing concerns from his constituents, McConnell urged NCUA to provide clarification to help address this barrier in #Kentucky. @KYCreditUnions applauds the positive news https://t.co/5kaQmxJE1x
— Senator McConnell Press (@McConnellPress) August 19, 2019
“I’m delighted to hear the NCUA has answered my call on behalf of Kentuckians to ensure the legal hemp industry can access much-needed financial services,” McConnell said in a press release. “Although President Trump signed into law my initiative last year to remove hemp from the federal list of controlled substances, many of my constituents have told me about their difficulty receiving loans and other services that are necessary to successfully run a hemp business.”
“Through this guidance by the NCUA, I look forward to more hemp farmers, processors and manufacturers starting or growing their operations with the help of Kentucky’s credit unions,” he said. “As Senate Majority Leader, I’ll continue advocating for Kentucky’s priorities throughout the federal government, and I’m proud of today’s positive news.”
Credit unions have generally been friendlier to the marijuana and hemp industries than have conventional banks, and NCUA has similarly taken a more proactive role in evolving to meet the demands of these burgeoning markets.
For example, the agency’s head clarified earlier this month that credit unions wouldn’t be punished simply for serving hemp businesses so long as they were following standard procedures. NCUA also released a draft rule in July that would allow people with past drug convictions to work at credit unions.
Cannabis banking issues have received significant congressional attention this session, with a bipartisan consensus emerging around creating a legislative fix so that hemp and marijuana businesses are able to access financial services.
The hemp industry in particular has enjoyed bipartisan support since the crop was legalized, but while marijuana remains a federally controlled substance, more lawmakers from across the aisle are expressing interest in affording cannabis businesses the same access in order to increase financial transparency and mitigate public safety risks associated with operating on a largely cash-only basis.
The House Financial Services Committee approved a bill in March that would protect banks that service marijuana businesses from being penalized by federal regulators, and the Senate Banking Committee also held a hearing on the issue last month.
Banking Chairman Mike Crapo (I-ID), who suggested earlier this year that his panel wouldn’t convene to discuss the matter as long as cannabis is federally illegal, has since taken a stance that the issue needs to be resolved.
But while advocates hoped that legislation to address marijuana banking problems would be taken up by the full House ahead of the August recess, that window closed and attention is now turned to a potential hearing in the fall.
Photo courtesy of Brendan Cleak.
Marijuana Taxes Differ In Legalized States, Complicating Projections
The marijuana legalization movement is often described as a state-level experiment—and one aspect of its implementation that’s garnering more attention is how legalized jurisdictions approach cannabis taxes in different ways.
Pew Charitable Trusts has been monitoring taxation in the legal industry and released a report on Monday that explains the challenges of establishing effective tax schemes and accurately projecting revenues, especially considering that experts don’t have a sizable body of historical data on which to base predictions like they do for alcohol and tobacco.
That said, there are some lessons to be taken from recent years since early legalizers implemented their respective programs.
Because tax rates differ significantly for marijuana businesses and consumers depending on the state, revenue from cannabis sales has varied, leaving policymakers in a flux as they work to meet budget goals and predict future trends, Pew reported.
Revenue was 40 percent higher in the first six months of sales than Nevada anticipated, for example, while sales in California were 45 percent lower than initially projected.
Here’s a breakdown of marijuana tax revenue in five adult-use states:
Pew also observed that revenue growth is slowing in Colorado and Washington, the first states to legalize for recreational use, as the market evolves.
— Pew States (@PewStates) August 19, 2019
“Supporters of legalizing recreational marijuana expected a new revenue source for states, but market uncertainties continue to challenge revenue forecasters and policymakers,” Pew concluded. “The difficulty in forecasting revenue is compounded by the fact that states have only recently begun to understand the recreational marijuana market: the level of consumer demand for recreational marijuana products, the types of users and how much they might pay for the drug, and competition with the black market.”
“States have learned some lessons but continue to grapple with unknowns.”
In order to prevent budget shortfalls that could impact funding for certain programs, policymakers should take caution and bear in mind the differences “between marijuana revenue’s short-term growth and long-term sustainability.”
“While these new dollars can fill immediate budget needs, they may prove unreliable for ongoing spending demands,” Pew said. “Policymakers should look to other, more familiar sin taxes for lessons on how to manage marijuana tax revenue most effectively.”
Photo courtesy of WeedPornDaily.