Congress Introduces Law to Deschedule Cannabis, Considers Banking Reform
Today was one of the biggest days in Washington, D.C. for the cannabis legalization movement so far in 2019.
On Tuesday, July 23, cannabis took center stage twice on Capitol Hill. First, Democratic presidential candidate Sen. Kamala Harris (D-CA) and House Judiciary Chair Rep. Jerry Nadler (D-NY) introduced a comprehensive bill to federally deschedule cannabis and enact a host of initiatives to address the racist impacts of the War on Drugs. Second, the Senate held a committee meeting on the challenges of cannabis and banking.
In a phone call at the end of the day, leaders of the Congressional Cannabis Caucus said that the day had been a “watershed moment” for the cannabis legalization movement.
Omnibus MORE Act Introduced to Congress
The legislation that Harris and Nadler introduced on July 23 — the Marijuana Opportunity, Reinvestment, and Expungement (MORE) Act — is one of the most comprehensive federal cannabis bills ever.
It gets even better though, because it’s possible that the MORE Act could actually pass in the Democratically-controlled House of Representatives. Nadler chairs the House Judiciary Committee, which makes him one of the most powerful Democrats in the House and a key holder for a committee that any cannabis legislation would need to pass through. Harris is a presidential debate stand-out and former prosecutor, who once laughed at the idea of legal marijuana in the not-too-distant past but has since changed her tune. It will be fascinating to see how this bill weighs against her wider criminal justice record in the eyes of the electorate.
The MORE Act would remove cannabis from the Controlled Substances List and raise funds to help the communities who hit hardest by cannabis prohibition get their shot in the industry. Another part of the plan is a 5% federal cannabis tax that would be used to create an Office of Cannabis Justice and fund an effort from the Small Business Administration to assist people participating in the cannabis industry. The SBA would also encourage state and local equity programs.
“As a person of color, as a woman, as a person whose community has been tremendously negatively impacted by these [drug] laws, this is a good day,” said Rep. Barbara Lee (D-CA), who co-sponsored the bill, in a press call on Tuesday.
In February, Lee also introduced her own bill, the Marijuana Justice Act, to address cannabis legalization and social equity, but she said that she was happy to see multiple bills confront the problems of race and cannabis policy.
“I don’t think [the Marijuana Justice Act] been usurped, I think it’s been included,” Lee said. “We’re trying to get this done any way we can, by any means necessary. Now we have a broader base and a broader coalition. I’m going to continue to work on the Marijuana Justice Act, but to see our provisions included in what is almost this omnibus bill I think is a positive step.”
The National Cannabis Industry Association weighed in on the magnitude of the effort behind the MORE Act.
“The fact that key congressional leaders are introducing such forward-thinking and justice-focused cannabis legislation is truly a sign of how far we’ve come on this issue,” said NCIA Executive Director Aaron Smith said in an email following the MORE Act’s announcement.
“We still have a long way to go before we see sensible cannabis policies enacted at the federal level, but this shows that the conversation has shifted from if to how,” said Smith. “We are very happy to see an increased emphasis on how to address the racially and economically disparate impact of our failed federal drug laws so that everyone has the chance to benefit from the opportunities created by the legal cannabis industry.”
The MORE Act was also co-sponsored by Democratic presidential candidates Sen. Elizabeth Warren, Sen. Cory Booker and Rep. Tulsi Gabbard.
Senate Banking Committee Hears Testimony on Cannabis Problems
It’s widely acknowledged that, in the push for cannabis legalization at the state level, cannabis companies desperately need federal help in order to access the banking industry.
There has been a solid week of buildup to the Senate Committee on Banking, Housing, and Urban Affairs’ hearing, titled, “Challenges for Cannabis and Banking: Outside Perspectives.” So, you had to figure we would be diving into one of the most pressing issues facing pot entrepreneurs and corporate entities. You can watch the whole hearing here.
The day included reform-supporting statements from Sen. Cory Gardner (R-CO) and Sen. Jeff Merkley (D-OR), and representing the cannabis industry was John Lord of LivWell Enlightened Health. Lord also chairs the board of the Cannabis Trade Federation.
“Over our 10 years of operations, we have had accounts closed at over a dozen financial institutions,” Lord told lawmakers. “As you can imagine, this is incredibly disruptive. Imagine running a manufacturing, wholesale, and retail operation with hundreds of employees and having to make all payments, including payroll, in cash. It is difficult and, frankly, it is dangerous. This is something hundreds, if not thousands, of state-legal cannabis companies have had to struggle with.”
Lord went on to tell the committee the current situation makes it even harder for small businesses trying to plant their flag.
“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,” Lord said. “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.”
A primary point of concern for everyone who came out in support of reform today is the Secure And Fair Enforcement (SAFE) Banking Act of 2019. One of the people who has been carrying its torch on Capitol Hill rallying lawmakers is NORML Political Director Justin Strekal.
“We duly recognize that better access to banking is necessary in order for the legal marijuana market to become more transparent and more convenient for customers,” Strekal said in a statement following the hearing.
“No industry can operate safely, transparently, or effectively without access to banks or other financial institutions and it is self-evident that this industry, and the consumers that are served by it, will remain severely hindered without better access to credit, financing, banking, and payment processing,” Strekal continued. “Ultimately, Congress must amend federal policy so that the growing number of state-compliant businesses, and the millions of Americans who patronize them, are no longer subject to policies that needlessly place them in harm’s way. Cannabis businesses ought to be held to the same standards as any other commercial enterprises.”
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