VIDEO: NCIA Submits Testimony At U.S. House Committee On Financial Services
Last week, as NCIA wrapped up another successful Seed to Sale Show, we were vigilantly preparing for a historic hearing about the issue of cannabis banking and the SAFE Banking Act. This is an incredible milestone for our industry. If this bill passes, it would allow marijuana-related businesses in states with existing regulatory structures to access the banking system.
The Consumer Protection and Financial Institutions Subcommittee of the U.S. House Committee on Financial Services held this historic hearing about a draft bill that provides safe banking services for legal cannabis businesses. This was the first Committee hearing on stand-alone legislation that is a priority for our industry. Learn more about the hearing from NCIA’s Aaron Smith.
Read NCIA’s Executive Director and Co-Founder, Aaron Smith’s official testimony here.
To find out more about what NCIA is doing to support this bill and other legislative priorities, join us at a Cannabis Caucus event near you!
New Year, New Attorney General?
by Michelle Rutter, NCIA’s Government Relations Manager
Last month, the Senate Judiciary Committee began the confirmation hearing for William Barr, President Trump’s nominee for Attorney General. Barr served as Attorney General under President George H.W. Bush from 1991-1993 — a time when the War on Drugs was arguably at its peak. There was much concern that Barr’s position on cannabis would be reminiscent of the last Attorney General, Jeff Sessions, however, January’s hearings proved otherwise.
During the Senate confirmation hearing, Barr stated that he would respect state cannabis laws and legal businesses when it comes to enforcing federal marijuana statutes. In response to questioning from Sen. Cory Booker (D-NJ) and Sen. Kamala Harris (D-CA), Barr stated that if confirmed, his “approach to this would be not to upset settled expectations and the reliant interests that have arisen as a result of the Cole Memorandum.” Upon further questioning, he stated that he “is not going to go after companies that have relied on the Cole Memorandum.” (It’s also important to note that the two Senators who asked Barr about cannabis policy are both running for president).
Barr even put it in writing. In response to written questions, Barr wrote, “As discussed at my hearing, I do not intend to go after parties who have complied with state law in reliance on the Cole Memorandum… I have not closely considered or determined whether further administrative guidance would be appropriate following the Cole Memorandum and the January 2018 memorandum from Attorney General Sessions, or what such guidance might look like. If confirmed, I will give the matter careful consideration.” He also wrote to the committee, “I still believe that the legislative process, rather than administrative guidance, is ultimately the right way to resolve whether and how to legalize marijuana.”
The Cole Memo, issued in 2014, directed federal prosecutors not to use resources to target businesses or individuals that were in compliance with state cannabis laws and met a set of public safety criteria. That guidance, which gave many businesses and state governments the confidence to move forward with implementing regulated cannabis markets, was rescinded in January 2018 by then-Attorney General Jeff Sessions.
Several comprehensive cannabis policy reform bills that would allow states to determine their own laws without federal interference are expected to be considered this year. NCIA will continue to work with the Senate Judiciary Committee, Barr (should he be confirmed), and the Department of Justice on these critical issues.
New Bill: VA Medicinal Cannabis Research Act
by Michelle Rutter, NCIA’s Government Relations Manager
The 116th Congress just recently began, but there’s already been a flurry of new cannabis bills filed. Let’s take a look at this new piece of cannabis legislation that was introduced simultaneously in both chambers:
Bill: H.R. 493/S. 179: VA Medicinal Cannabis Research Act of 2019 Introduced by: Rep. Lou Correa (D-CA) and Sen. Jon Tester (D-MT) Additional cosponsors: Reps. Steve Cohen (D-TN), Don Young (R-AK), Dina Titus (D-NV), Matt Gaetz (R-FL), Eleanor Holmes Norton (D-DC), Salud Carbajal (D-CA), Peter DeFazio (D-OR), Katie Hill (D-CA), Janice Schakowsky (D-IL) and Sen. Dan Sullivan (R-AK)
What it does: This bipartisan, bicameral bill requires research into the safety and efficacy of medicinal cannabis usage on veterans diagnosed with PTSD and chronic pain. This legislation would:
Require VA to conduct a double-blind clinical trial with varying forms of cannabis on specified health outcomes of veterans with PTSD and veterans with chronic pain
Authorize a long-term observational study of participating veterans
Require the VA to preserve all data collected or used for the purposes of conducting future research related to medicinal cannabis
Require the VA to submit annual reports to Congress on the implementation of this bill for five years.
NCIA is proud to have endorsed this legislation for two congressional sessions.
Many more (possibly dozens!) of cannabis bills are expected to be filed in the next few months. NCIA will continue to track these pieces of legislation and endorse critical cannabis reforms on Capitol Hill.
Three New Bills In The 116th Congress
by Michelle Rutter, NCIA’s Government Relations Manager
The 116th Congress just began, but there’s already been a flurry of new cannabis bills filed. Let’s take a look at some of the first pieces of legislation to be filed in the House of Representatives on the topic:
Bill: H.R. 420: Regulate Marijuana Like Alcohol Act Introduced by: Congressman Earl Blumenauer (D-OR) What It Does: This bill was introduced in the 115th Congress by now-Governor Jared Polis (D-CO). Filed in the 116th Congress by Rep. Blumenauer, this bill would remove cannabis from the Controlled Substances Act entirely. It would also transfer cannabis enforcement authority from Drug Enforcement Administration to a renamed Bureau of Alcohol, Tobacco, Marijuana, Firearms and Explosives. Both shipping or transporting cannabis into states that have not legalized it would continue to be prohibited. Last year, the bill garnered 26 cosponsors.
Bill: H.R. 493: Sensible Enforcement of Cannabis Act Introduced by: Rep. Lou Correa (D-CA) Additional cosponsors: Reps. Steve Cohen (D-TN), Don Young (R-AK), Dina Titus (D-NV), Matt Gaetz (R-FL), Eleanor Holmes Norton (D-DC), Salud Carbajal (D-CA), Peter DeFazio (D-OR), Katie Hill (D-CA)
What it does: This bipartisan bill seeks to enshrine the now-rescinded Cole Memo into federal law. The legislation directs the Attorney General, in enforcing the provisions of the Controlled Substances Act relating to cannabis, to focus on certain enforcement priorities that were outlined in the Cole Memo, such as:
Distribution of marijuana to minors.
Revenue from the sale of marijuana from going to criminal enterprises, gangs, and cartels.
Diversion of marijuana from States where it is legal under State law in some form to other States.
State-authorized marijuana activity from being used as a cover or pretext for the trafficking of other illegal drugs or other illegal activity.
Violence and the use of firearms in the cultivation and distribution of marijuana.
Drugged driving and the exacerbation of other adverse public health consequences associated with marijuana use.
The growing of marijuana on public lands and the attendant public safety and environmental dangers posed by marijuana production on public lands.
Marijuana possession or use on Federal property.
This bill was previously introduced at the very end of the 115th Congress. NCIA is proud to have endorsed this legislation.
Bill: H.R. 127: Compassionate Access, Research Expansion, and Respect States (CARERS) Act of 2019 Introduced by: Rep. Steve Cohen (D-TN) Additional cosponsors: Reps. Don Young (R-AK) and Matt Gaetz (R-FL)
What it does: This bill would amend the Controlled Substances Act to state that regulatory controls and administrative, civil, and criminal penalties do not apply to a person who produces, possesses, distributes, dispenses, administers, tests, recommends, or delivers medical marijuana in compliance with state law. The bill also excludes “cannabidiol” (CBD) from the definition of “marijuana” and limits the concentration of delta-9-tetrahydrocannabinol (THC) in CBD to 0.3 percent on a dry weight basis. The bill also directs the Department of Health and Human Services (HHS) to terminate the Public Health Service’s interdisciplinary review process that is used to evaluate applications for medical marijuana research, opening up a multitude of research opportunities. The bill requires the DEA to license manufacturers and distributors of marijuana for medical research;, for HHS to register practitioners to conduct research, and for the Department of Veterans Affairs (VA) to authorize VA health care providers to provide recommendations and opinions to veterans regarding participation in their states’ cannabis programs.
Many more (possibly dozens!) of cannabis bills are expected to be filed in the next few months. NCIA will continue to track these pieces of legislation and endorse critical cannabis reforms on Capitol Hill.
The 116th Congress – What To Expect
by Michelle Rutter, NCIA Government Relations Manager
As the 116th Congress begins, the momentum behind cannabis reform has reached an unprecedented level. Let’s take a look at the top three things you can expect from cannabis legislation in the newest congressional session:
Successes in the House of Representatives, but an uphill climb in the Senate. The 116th Congress is the first time in eight years that Democrats have held control of the House of Representatives. As a result, it is expected that cannabis legislation will garner hearings, appropriations amendments will be expanded, and a bill could even be reach the Floor and be voted on! That being said, it’s important to remember that the Senate is still controlled by the more conservative Republican battle, and any cannabis amendments or legislation that reaches that chamber will have a very serious uphill battle prior to passage.
More cosponsors. In the 115th Congress, the House’s SAFE Banking Act (H.R. 2215) had a record breaking 95 cosponsors, while the Senate version (S. 1152) had 20. That’s nearly a quarter of the House of Representatives and a fifth of the entire Senate! Bills to reform IRC Section 280E saw a similar spike– at the end of 2016, the House’s Small Business Tax Equity Act had a mere 18 cosponsors, while the Senate version had four. At the end of December, the Small Business Tax Equity Act (H.R. 1810) has 46 cosponsors, while the Senate’s version (S. 777) has six. In the 116th Congress, you can expect these bills and others to continue to gather record-breaking numbers of cosponsors- in both the House and Senate.
New bills. There are cannabis bills that are introduced every session, like the banking bill, 280E bill, and various pieces of states’ rights legislation. In the 115th Congress, advocates saw multiple new cannabis bills get introduced, like the Marijuana Data Collection Act, the Marijuana Justice Act, and the MAPLE Act. As the 116th Congress continues, you can expect almost all of the cannabis related bills from last session to get reintroduced, but will likely also see a plethora of new legislation be filed that will address many different issues.
While the opportunities for cannabis reform are numerous, one thing is for sure: the 116th Congress will be one for the history books.
Join us on May 21-23, 2019 for NCIA’s 9th Annual Cannabis Industry Lobby Days in Washington, D.C., to make our voices heard on Capitol Hill! This event is complimentary and exclusive to NCIA members. Registration opens February 11.
Member Blog: Hemp & CBD Legalization, Regulation & Compliance – Key Language in the Farm Bill
Few developments in the world of cannabis — whether marijuana or hemp — could match the impact of the 2014 Farm Bill. But the 2018 Farm Bill, approved by the House and the Senate this week, promises to do just that.
As a quick reminder, the 2014 Farm Bill created an exception to the federal laws that prohibit the cultivation and sale of cannabis. To simplify, to the extent that a state created a pilot program to study hemp cultivation and the plants were of a sufficiently low level of THC, the resulting plant would be considered “Farm Bill hemp” and not subject to the prevailing federal prohibitions. To state the obvious, this was a very significant change. In fact, as a result of a combination of the magnitude of the change and the narrowness of the exception, apparent confusion led to periodic enforcement actions and court challenges.
As 2018 draws to a close, Congress must once again reauthorize the Farm Bill. It’s worth noting that the periodic reauthorization has nothing to do with hemp policy, and everything to do with the federal legislative process.
And the relatively narrow “exception” for hemp in the 2014 Farm Bill is on the cusp of significant expansion. Hemp, defined as cannabis plants and all their parts, extracts, “cannabinoids,” and derivatives with a THC concentration of less than 0.3%, will be subject to a regulatory scheme devised by the federal Department of Agriculture and will be removed from the federal Controlled Substances Act. States that wish to regulate hemp may propose regulations that the state “shall submit to the Secretary” of Agriculture. Notably, no state “shall prohibit the transportation or shipment of hemp or hemp products” produced in compliance with these new rules.
So, inquiring minds might wonder, what happens if 2018 Farm Bill hemp turns out to have a THC concentration of 0.31% instead of the permissible 0.3%? To the extent that higher THC concentration is the result of an honest mistake, Section 297B(e)(2) provides the answer: if the state has developed hemp regulations, and the state concludes the violation was the result of “negligence” (e.g., an unintentional oversight), the producer will be required to take corrective action. If that happens 3 times in a 5-year period, the producer will be ineligible to produce. If the state has not developed hemp regulations, the same standard will be applied by the federal Secretary of Agriculture pursuant to Section 297C(c)(2).
That is, a “negligent” mistake should not place the cultivator at risk of being placed outside of the protections of the Farm Bill (discussion of the reach of those federal laws is fascinating, but beyond the scope of this post). As a result, it will remain advisable for hemp cultivators to implement sufficient compliance efforts to avoid any potential inference that they are intentionally seeking a higher THC concentration.
Barring the unexpected, the 2018 Farm Bill will have a seismic impact on the hemp and hemp-derived CBD industry. With the nation watching, a smooth, well-regulated transition can only help to bolster calls for broader cannabis reform. As a result, once the 2018 Farm Bill becomes law, the industry will undoubtedly be paying close attention to the regulations promulgated by federal and state hemp regulators. And they will be working hard to demonstrate that they are staying within those guidelines.
Michael Cooper is the co-founder and managing member of MadisonJay Solutions LLC, a leading regulatory advisor to the adult-use cannabis industry that helps businesses understand the latest rules and build effective compliance infrastructure to address risk. He is the Vice Chair of the NCIA’s State Regulations Committee, and publishes and speaks frequently on cannabis regulation.
He is a graduate of Harvard College and Harvard Law School, and previously served as General Counsel of MHW, Ltd. and in the litigation department of Cravath, Swaine & Moore LLP. He began his legal career as a law clerk on the U.S. Court of Appeals for the Fifth Circuit. He can be reached at mcooper@madisonjaysolutions.com.
Top Five Memorable Marijuana Moments In 2018
by Michelle Rutter, NCIA Government Relations Manager
As 2018 draws to a close, our Government Relations team in Washington, D.C. is feeling especially thankful this year – both for all of our members, and for all of the strides forward that cannabis policy made this year! Before 2019 begins, let’s take a look back on marijuana’s top five most memorable moments of 2018:
Cannabis wins big at the ballot box
There’s no doubt about it: America experienced a green wave on election night as voters all over the country cast their votes in favor of reforming cannabis laws and electing candidates that share those values. Voters in Michigan cast their votes for the legalization of adult-use cannabis, increasing momentum of our movement. At the same time, voters in Missouri and Utah were successful in legalizing medical cannabis, becoming the 32nd and 33rd states to do so, and despite significant hurdles. In addition to the ballot initiatives that were passed, Democrats took control of the House of Representatives, while Republicans maintained their control of the Senate. While this development surely means that cannabis policy will progress further than ever in the House in 2019, it also means that anything passed through that chamber will face significant hurdles in the more conservative Senate.
Shake-up at the Department of Justice and the rescission of the Cole Memo
On January 4, then-Attorney General Jeff Sessions announced the Department of Justice’s decision to rescind the “Cole Memo” and two additional memos related to marijuana enforcement policy. These memos, issued in 2013 and 2014, helped to clarify the Department’s response to state-legal cannabis activity. The rescission of the memo has not resulted in any major change in enforcement policy, rather, this continues to be a matter of prosecutorial discretion. On November 6, the day after the midterm election, Jeff Sessions resigned as Attorney General at the President’s request.
Congressional banking and 280E bills gain record co-sponsorship
As the momentum for cannabis reform grows, so has the number of cosponsors on marijuana bills in Congress. Most notable is legislation that would provide safe harbor to financial institutions that choose to service the cannabis industry. At the end of the 114th Congress in 2016, the House’s Marijuana Businesses Access to Banking Act had 39 cosponsors, while the Senate version had just 10. As we finish the 115th Congress, the House’s SAFE Banking Act (H.R. 2215) has 95 cosponsors, while the Senate version (S. 1152) has 20. That’s nearly a quarter of the House of Representatives and a fifth of the entire Senate! Bills to reform IRC Section 280E have seen a similar spike. At the end of 2016, the House’s Small Business Tax Equity Act had a mere 18 cosponsors, while the Senate version had four. Today, the Small Business Tax Equity Act (H.R. 1810) has 46 cosponsors, while the Senate’s version (S. 777) has six.
Canada implements adult-use cannabis laws
In October, Canada’s laws making marijuana legal for adults went into effect and licensed retail stores opened throughout the country. This move made Canada the second country in the world, after Uruguay, to formally legalize the recreational use of the plant. Canada is the first G7 and G20 nation to do so. Federal prohibition has effectively locked American cannabis companies out of legitimate financial markets and, in doing so, has provided a significant advantage to publicly traded Canadian firms. Changes to federal law are needed to enable American small businesses to compete on the emerging multi-billion-dollar global cannabis market. Without legislative action, U.S. cannabis entrepreneurs will miss out on opportunities to develop innovative new products, attract global investment funding, and expand their reach to capitalize on expanding international business opportunities.
NCIA’s 8th Annual Cannabis Industry Lobby Days
This year, 225 cannabis industry professionals descended on Washington, D.C. to lobby congressional offices on some of the issues they and their businesses are facing. In total, NCIA members met with nearly 300 offices on Capitol Hill! The cannabis industry has seen exponential growth in the mainstream support for regulated cannabis markets from both sides of the political aisle. This progress is a direct result of the uncountable number of personal stories told by our members each year at our annual Lobby Days events in Washington, D.C., so don’t forget to mark your calendars for May 21-23, 2019, so that you can join us for our largest event yet!
The 116th Congress will arrive in Washington, D.C. in January. With the change in leadership in the House of Representatives and the momentum at our backs, 2019 is shaping up to be one of the cannabis industry’s best years yet. Our Government Relations team looks forward to all of the opportunities we will be faced with in the new year, and we wish you a very happy holiday season!
VIDEO: The Benefits of Legalizing Cannabis
In this third installment of NCIA’s animated educational video series, we explore the benefits of legalizing cannabis nationwide and beyond. Learn how ending federal prohibition can improve public safety and add economic opportunities to our communities, and how you can help.
By Michelle Rutter, NCIA Government Relations Manager
As 2018 comes to an end, so does the 115th Congress. But, before the 116th Congress is sworn-in in January, an appropriations agreement must be reached before December 7, when the continuing resolution (CR) that is in place expires. That means if Congress doesn’t pass appropriations legislation by December 7, a partial government shutdown will occur.
Passing the bill in less than ten days will be an uphill battle. The President wants $5 billion appropriated towards a border wall and has threatened to veto the bill should it not include it. The Republican-controlled Senate has also asked for $1.6 billion worth of “pedestrian fencing” at the southern border. Should a shutdown occur, it will be the last chance for the President to win wall funding before Democrats take over the House majority in January.
There are a couple of different scenarios that could occur, but both bode well for cannabis advocates. First, Congress could pass another continuing resolution, which would include the current protections in place for medical cannabis patients, programs, and businesses. Alternatively, Congress could choose to pass an appropriations package that includes the Subcommittee on Commerce, Science, and Justice (CJS) bill, which also includes those same medical cannabis protections. Essentially, either way, medical cannabis protections remain in law.
This simple, one sentence appropriations amendment is the only thing standing in the way of the Department of Justice from prosecuting medical cannabis businesses and patients, and the process of getting it included into the federal appropriations bill every year can be incredibly difficult.
Moving into 2019, NCIA will continue to focus on ensuring that these protections remain in place, but also work to expand them to include adult-use cannabis businesses. In addition, NCIA will be using the appropriations process to advance other areas of cannabis policy, like curtailing the Treasury Department from prosecuting banks that choose to service the legal cannabis industry, and prohibiting the Department of Veterans Affairs from punishing veterans that choose to use cannabis in states where it’s legal.
All of these amendments will have good chances of passage in the Democratic-controlled House, but will face challenges in the Republican-controlled Senate.
Jeff Sessions Resigns
Yesterday, Attorney General Jeff Sessions submitted his resignation to President Trump, at the President’s request. His resignation marks the end of an era at the Justice Department under one of the most notable cannabis opponents Washington has ever seen.
During a hearing in 2016, then-Senator Sessions firmly stated that “good people don’t smoke marijuana.” After being appointed as Attorney General by President Trump, Sessions made the decision to rescind the Obama-era Cole Memo, which outlined eight enforcement priorities that largely allowed states to set their own cannabis policies without fear of federal interference.
NCIA looks forward to working with acting-Attorney General Matthew Whitaker and is actively working with our allies in the Senate to ensure that the need to protect the legal cannabis industry is front and center when the future nominee is considered by the chamber.
Appropriations and Cannabis (Part 2): Why It Matters
by Michelle Rutter, NCIA Government Relations Manager
Last week, we explained the appropriations process and detailed how Congress allocates federal funds (click here for a quick refresh). This week, we’ll take a look at how exactly cannabis fits into the equation, and why it matters.
By 2001, California, Oregon, Alaska, Washington, Maine, Hawaii, Nevada, and Colorado had all legalized medical cannabis. As is still the case, federal law and these medical cannabis laws contradicted one another, and as a result, one member of Congress decided that something had to be done. That congressman was Rep. Maurice Hinchey (D-NY), and he decided to use Congress’ “power of the purse,” or the appropriations process, to protect medical cannabis laws and patients.
Rep. Hinchey first introduced an amendment addressing these inconsistencies between state and federal cannabis laws in 2001, but withdrew it before it could be voted on. Just two years later, in 2003, Rep. Hinchey teamed up with Rep. Dana Rohrabacher (R-CA) to introduce what would simply become known as the “Hinchey-Rohrabacher amendment,” which prohibited the Department of Justice from using its federally appropriated funds to interfere with the implementation of state medical cannabis laws. The amendment failed when brought to the House floor for a vote by a margin of 152–273, and would continue to fail five more times over the next decade.
By 2014, the amendment was known as the “Rohrabacher-Farr amendment,” and was introduced in the House of Representatives by Rep. Rohrabacher and Rep. Sam Farr (D-CA). Finally, hard work and patience paid off: when brought to the House floor for a vote on May 30, 2014, the amendment passed by a 219–189 margin as an attachment to the Commerce, Justice, and Science Appropriations bill for fiscal year 2015. In the hyper-partisan times we live in, the amendment was lauded for being bipartisan and receiving the support of nearly 50 Republicans.
The amendment was then introduced in the Senate by Sens. Rand Paul (R-KY) and Cory Booker (D-NJ) just weeks later, but was not allowed a vote. In December, however, the amendment was inserted into the spending bill as part of final negotiations, and the bill was signed into law by President Obama on December 16, 2014.
Thankfully, that amendment remains in place today and continues to protect medical cannabis businesses, patients, and laws in the 31 states where it’s legal. It hasn’t been easy, though: appropriations bills must be negotiated and passed annually, so the amendment must be introduced year after year. Not only that, the appropriations process is riddled with legislative procedures and technicalities that have made the amendment’s passage a struggle in the Republican controlled Congress.
Since its initial passage in 2014, the amendment has been renamed multiple times, introduced by a member of the House Appropriations Committee, been introduced by the Senate Appropriations Committee Ranking Member, been included in nearly a dozen continuing resolutions, and been included in the original (unamended) text of the Senate’s version of the appropriations bill. Needless to say, the amendment has had quite a legislative journey in just four years! Despite all of that, however, the amendment has not received a House floor vote since 2015, and has never received one in the Senate.
Funding for fiscal year 2018 ends this Sunday, September 30. It is expected that the House of Representatives will vote this week on an appropriations package that would include yet another continuing resolution, likely beyond the midterm elections. This package, if passed, will include medical cannabis protections. If this appropriations package does not pass by September 30, the government will shut down, and medical cannabis businesses and patients will be left in limbo.
This simple, one sentence appropriations amendment is the only thing standing in the way of the Department of Justice from prosecuting medical cannabis businesses and patients, and as you’ve read, the process of getting it included into the federal appropriations bill every year can be incredibly difficult. NCIA continues to focus on ensuring that these protections remain in place, but also works to expand them to include adult-use cannabis businesses. In addition, NCIA is trying to use the appropriations process to advance other areas of cannabis policy, like curtailing the Treasury Department from prosecuting banks that choose to service the legal cannabis industry, and prohibiting the Department of Veterans Affairs from punishing veterans that choose to use cannabis in states where it’s legal. While the appropriations process is long, arduous, and incredibly technical, ensuring the inclusion of cannabis amendments is essential, imperative, and crucial.
The History of Appropriations
by Michelle Rutter, Government Relations Manager
Congress doesn’t spend much of their time on passing legislation, but one exception is how much time they spend on the nation’s annual spending bills. These bills, also commonly known as appropriations bills, are legislation in Congress that “appropriates,” or sets aside, federal funds to be divided between specific federal government departments, agencies, and programs.
Let’s take a look at the history of the appropriations process, and later, we’ll talk about how it all relates to cannabis.
Appropriations bills are one part of the larger federal budget and spending process. Congress’ ability to appropriate funds has its origin in the Constitution — Article I, section 9, clause 7 states that “No money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law…” The President still has the power to veto appropriations bills, however, they cannot choose which provisions to keep and which to delete — the Executive must either approve or disapprove of the entire bill.
Regular appropriations bills are passed annually, with the funding they provide covering one fiscal year. The fiscal year runs from October 1 to September 30 of the following year. For example, Fiscal Year 2019 (FY2019) will run from October 1, 2018, until September 30, 2019. Appropriations bills are created, amended, and passed initially by the House and Senate Committees on Appropriations, both of which have twelve matching subcommittees, each tasked with working on one of the twelve annual regular appropriations bills. Each of those twelve subcommittees deals with a different subject.
As Congress has become increasingly partisan, another type of appropriations bill, the continuing resolution (CR), has gotten much more popular. If a new fiscal year begins and Congress has not passed some — or all — of the regular appropriations bills, Congress can extend their funding authority from the previous year, with possible minor modifications, using a continuing resolution. Think of a CR as a “copy and paste” of the appropriations bill, with possibly a few other provisions added. If all twelve regular appropriations bills have been passed, a continuing resolution is unnecessary.
There are various points throughout the appropriations process where members of Congress may introduce amendments to the bill being considered. They may be introduced in committee by a member of either chamber’s Appropriations Committee, or they may be submitted to the powerful Rules Committee. In recent years, the Rules Committee has been overcome by partisanship and has essentially blocked the minority’s amendments. This has made it difficult for any topic that can even be considered as somewhat “controversial” to be addressed.
In next week’s installment, we’ll talk about how the appropriations process relates to cannabis policy and how NCIA has moved the dial in recent years. Stay tuned!
New Bill: The Veterans Medical Marijuana Safe Harbor Act
In the 115th Congress, there are more cannabis reform bills than ever before — dozens, as a matter of fact! Let’s take a closer look at one of the newest reform bills that was just introduced today!
Bill: The Veterans Medical Marijuana Safe Harbor Act
Introduced by: Senator Brian Schatz (D-HI) and Senator Bill Nelson (D-FL)
What It Does: This bill would create federal, safe harbor protection for veterans and their doctors when using or recommending medical cannabis in states where it is legal. In order to provide our nation’s veterans immediate relief from opioid abuse, the bill directs the Department of Veterans Affairs to conduct research on the effects of medical marijuana on veterans in pain, and to research the relationship between state-sanctioned medical cannabis programs and any reduction in opioid abuse among veterans.
Endorsements: National Cannabis Industry Association, American Academy of Pain Medicine, Veterans Cannabis Coalition, Veterans Cannabis Project, Veterans for Medical Cannabis Access, Americans for Safe Access, NORML, and Marijuana Policy Project.
What To Expect: Now that the bill has been introduced, NCIA will continue to gather cosponsors for the legislation, as well as advocate for a hearing. With midterm elections fast approaching in November (register here), timing will be of the essence.
Hemp: One of the Nation’s Oldest, and Now Newest, Agricultural Commodities
by Michelle Rutter, NCIA’s Government Relations Manager
HISTORY
Farming and agriculture has long been a part of North American history. When the Great Depression hit in the 1930’s, both President Franklin Delano Roosevelt and Congress knew that the United States would struggle until the agriculture industry became prosperous again. As a result, many New Deal programs dealt with farming, but arguably the most notable agriculture related legislation was the Agricultural Adjustment Act of 1938, which was the first version of what we know today as simply the “Farm Bill” that is updated roughly every five years.
TODAY
In 2018, a new Farm Bill was introduced with a price tag upwards of $800 billion. One of the most notable provisions in this year’s bill was led by Senate Majority Leader Mitch McConnell (R-KY): hemp legalization. Industrial hemp refers to the cannabis plant with less than 0.3 percent THC content and would include CBD medicinal products — so long as it contains less than 0.3 percent THC and is derived from industrial hemp.
While leadership in the House of Representatives blocked the hemp provision in its version of the bill, the Senate’s version of the bill that passed overwhelmingly in June does include it. That means that when the bill goes to conference in early September, that hemp legalization will be debated. Considering that the Senate Majority Leader is championing this provision, it stands a good chance at being included, though nothing is guaranteed.
Marijuana’s “cousin,” hemp, is generally barred because it is part of the cannabis plant, despite the fact that it contains little of that drug’s key psychoactive ingredient, THC. In 2014, Sen. McConnell secured a hemp pilot program in that year’s farm bill. Since then, at least 35 states have taken up the offer and developed industrial hemp programs, and those states will be eligible to pursue a legal, regulated market if the 2018 Farm Bill is passed with the hemp provision included.
If passed, the Farm Bill would legalize hemp as an agricultural commodity by removing it from the federal list of controlled substances and giving states the opportunity to be the primary regulators of hemp production. In addition to removing hemp from the federal controlled substance list, the Senate farm bill would allow industrial hemp to be eligible for crop insurance, a perk already enjoyed by other, more traditional crops. The bill would also reauthorize commodity, trade, agricultural research, rural development, and food and nutrition programs. Under current law, authorizations will expire September 30 or the end of the applicable crop year.
The first farm bill conference committee meeting has been set for September 5, 2018. The conferees from the House and Senate will try to iron out differences between their two bills in the panel. Included in the discussions will be 47 members of the House of Representatives and nine Senators. The results of this could mean a new era for the agricultural industry if hemp returns to American farmlands.
New Bill: The Clean Slate Act
In the 115th Congress, there are more cannabis reform bills than ever before — dozens, as a matter of fact! Let’s take a closer look at one of the newest reform bills that was just introduced last week.
Bill: The Clean Slate Act
Introduced by: Congresswoman Lisa Blunt Rochester (D-DE)
Original Cosponsors: Reps. Dwight Evans (D-PA), Gwen Moore (D-WI), Bobby Rush (D-IL), Sheila Jackson Lee (D-TX), Barbara Lee (D-CA), Robin Kelly (D-IL), Danny Davis (D-IL), Lacy Clay (D-MO), David Scott (D-GA), Al Green (D-TX), Frederica Wilson (D-FL), Eddie Bernice Jackson (D-TX), Hakeem Jeffries (D-NY), Yvette Clark (D-NY), Anthony Brown (D-MD), Brenda Lawrence (D-MI), Andre Carson (D-IN), Marcia Fudge (D-OH), Eleanor Holmes Norton (D-DC), and Donald Payne Jr (D-NJ)
What It Does: This bill gives an order to the court to be carried out at the time of sentencing. At that time, the court will enter an order that each criminal record that either relates to Section 404 of the Controlled Substances Act or any Federal, non-violent offense involving marijuana shall be sealed automatically one year after the individual fulfills their sentence. That means that exactly one year after someone has “done their time” or fulfilled the expectations laid out in their sentencing, that their record is automatically expunged of the crime. According to the ACLU, 52% of all drug arrests are for marijuana. Not only that, but of the 8.2 million marijuana arrests between 2001 and 2010, 88% were for simply having marijuana. Combine that with the fact that despite roughly equal usage rates, African-Americans are 3.73 times more likely than their white counterparts to be arrested for marijuana and you have a recipe for disaster. For all of those reasons, the Clean Slate Act is long overdue and should be enacted.
What To Expect: Now that the bill has been introduced, NCIA will continue to gather cosponsors for the legislation, as well as advocate for a hearing. With the House of Representatives currently away for August recess and midterm elections in November (register to vote here), timing will be of the essence.
New Bill: Fairness in Federal Drug Testing Under State Laws Act H.R. 6589
In the 115th Congress, there are more cannabis reform bills than ever before — dozens, as a matter of fact! This week, we want to highlight another brand new bill introduced in the House of Representatives.
Bill: H.R. 6589: Fairness in Federal Drug Testing Under State Laws Act
Introduced by: Congressman Charlie Crist (D-FL) and Congressman Drew Ferguson (R-GA)
What It Does: This bill would protect federal workers “whose residence is in a State where that individual’s private use of marijuana is not prohibited” from being denied employment or being “subject to any other adverse personnel action” as a result of a positive cannabis test. There is, however, an exception is laid out if there is “probable cause to believe that the individual is under the influence of marijuana” at the workplace. The bill’s language applies only to civilian federal employees across departments and agencies, from being punished for their off-the-job cannabis consumption as long as it is in accordance with a state law — whether that be medical or adult-use. The bill does not cover those applying for or holding positions involving “top secret clearance or access to a highly sensitive program.”
What To Expect: Now that the bill has been introduced, NCIA will continue to gather cosponsors for the legislation, as well as advocate for a hearing. With August recess underway and midterm elections in November (register here), timing will be of the essence.
NCIA’s government relations team was happy to work with Congressman Crist’s office on the Fairness in Federal Drug Testing Under State Laws Act’s language and roll-out. It is undoubtedly time for federal law to respect states’ decisions to legalize cannabis — and protect consumers and employees alike.
Canada Legalizes Cannabis – When Will The U.S. Follow?
by Rachelle Lynn Gordon, NCIA Editorial Staff
On June 19, Canada became the first G7 nation and second in the world after Uruguay to fully legalize cannabis for adult use, paving the way for what is estimated to be a CAD$9.2 billion dollar industry by 2025. Canadian Prime Minister Justin Trudeau Tweeted in response to the move:
“It’s been too easy for our kids to get marijuana – and for criminals to reap the profits. Today, we change that. Our plan to legalize & regulate marijuana just passed the Senate. #PromiseKept”
The passing of the iconic Bill C-45, also known as the Cannabis Act, was met with raucous applause from the across the globe and sent marijuana stocks soaring. Provinces and territories now have until October 17 to develop and implement their own regulations for the sale of cannabis products; according to the federal statute, adults will be able to carry and share up to 30 grams of marijuana in public and cultivate up to four plants at home.
But when will the United States follow suit and become a part of the multi-billion dollar global cannabis market?
High Time for Federal Legalization
“With leading policymakers on both sides of the aisle calling for reform, there has never been more momentum behind the effort to replace criminal marijuana markets with regulated businesses, but we still have a long way to go.” says Aaron Smith, executive director for the National Cannabis Industry Association (NCIA).
Despite the fact that 29 states, as well as Guam, Puerto Rico, and the District of Columbia, have legalized cannabis for medical and/or adult-use, the plant is still illegal at the federal level. This has led to immense headaches for business owners within the legal space who only wish for their companies to thrive but are hindered by lack of access to traditional banking and fundraising opportunities and stuck operating within individual state lines.
Lawmakers from legal states have heard their constituents’ voices loud and clear and have joined together to develop the STATES Act, short for “Strengthening the Tenth Amendment Through Entrusting States.” Introduced by Senators Elizabeth Warren (D-MA) and Corey Gardner (R-CO), the bill aims to protect states that choose to legalize cannabis by creating an exemption to the U.S. Controlled Substances Act, and would remove industrial hemp from the Controlled Substances Act entirely. The bill would also allow banks to work with cannabis businesses more easily. Representatives David Joyce (R-OH) and Earl Blumenauer (D-OR) have already introduced a companion bill in the House.
When asked about the STATES Act by reporters, President Trump replied that he would more than likely support the measure, stating: “I support Sen. Gardner, I know exactly what he’s doing. We’re looking at it. But I probably will end up supporting that, yes.”
Full Legalization Needed for Market to Thrive
Adopting a federalist approach on the issue of cannabis law reform will certainly mean that individual states will be allowed to flourish, but it stops short of the immense financial opportunities that federal legalization could bring.
“The cannabis industry is vibrant and expanding rapidly, but until the threat of federal interference is removed, our economic potential is limited,” said Aaron Smith, NCIA. “Lack of access to financial services, exorbitant tax pressures, and the absence of interstate and international commerce are all problems that we can fix by turning up the pressure on Congress.”
U.S.-based companies and investors are missing out on huge financial investment opportunities due to cannabis’ current status as a Schedule I controlled substance. According to a recent white paper released by NCIA’s Policy Council, as of February 2018, 39 of the 89 federally-licensed producers (LPs) of cannabis in Canada were publicly traded, raising a total of $1.2 billion CAD in January 2018 alone. On June 20th, it was announced that Tilray would be joining Cronos Group as the second Canadian LP listed on the U.S.-based NASDAQ; behemoth Canopy Growth is listed on the NYSE.
In late 2017, Canopy announced the sale of nearly 10 percent of its stock to U.S.-based alcohol giant Constellation Brands (known for Corona and SVEDKA vodka) for a cool $191 million dollars. Now that cannabis is legal in Canada, there are certain to be even bigger deals fastly approaching that U.S. operators are missing out on.
Impressive Advancements are Being Made – Just Not in America
The United States is also being left behind in terms of research and development and intellectual property within the cannabis space. In countries such as Israel, where the federal government appropriates money to researching marijuana, rapid advancements are being made that could be groundbreaking – and have global effects. In 2017, there were more than 110 clinical trials involving cannabis in Israel – far more than any other developed nation. It was also recently revealed that China now holds around half of the IP related to hemp in the world. This puts Americans at a disadvantage as the rest of the world competes to create innovative and life-altering cannabis medicines and technology.
“R&D requires access to capital and federal and academic support,” explains Frank Lane, President of Cannabis Financial Network. “These remain elusive in the U.S. because cannabis remains federally illegal. The U.S. is slowly allowing more University backed cannabis research but at a much slower pace then Israel, Canada and have allowed research on a federal level for years. The U.S. will be playing catch up as medical cannabis continue to be adopted globally.
Exports Expected to Rule Canadian Market
While legal domestic sales won’t begin for several months, some Canadian LPs have already been exporting cannabis products to several countries that have approved the plant for medical purposes. It was announced last October that Cronos Group had reached a deal to put their products in over 12,000 pharmacies across Germany, where the government is choosing to use their own socialised healthcare systems to handle the distribution of cannabis product to patients. Obtaining these lucrative government contracts means big money for exporters, and unfortunately for entrepreneurs from the U.S. looking to cash in may be too late by the time legalization occurs.
“Many European and Latin American countries are approving cannabis for medical use,” Lane adds. “These are billion dollar markets that countries like Canada and Uruguay are seizing because they have federally legalized cannabis and become adept at developing pharmaceutical grade products.”
U.S. Canna-Businesses Must Double Down on Reform Efforts
Until the federal government ceases to consider cannabis a Schedule I narcotic, American businesses will continue to lag behind and miss out on multi-billion dollar opportunities. Therefore, it is more important than ever that the industry continue to communicate with policymakers in order to create impactful change – before it’s too late. Attending events such as the NCIA Quarterly Cannabis Caucus series is a perfect way to engage with local politicians and fellow entrepreneurs while also staying up to date on the latest legalization developments.
NCIA’s Aaron Smith re-caps another successful Cannabis Industry Lobby Days! Watch this video to hear more about NCIA Members’ experiences and why you should plan to join us next year in D.C.
Are you an industry leader looking to invest in continued national advocacy for the industry but not yet a member of NCIA?
NCIA’s staff and professional lobbying consultants work year-round in our nation’s capital to build support for the cannabis business community and the policy changes needed for our industry to reach its full potential. That work has led us to the tipping point we are seeing today and it’s all been made possible by the financial support of our members.
Adding your name to the growing list of responsible businesses behind this effort will bring us even closer to reaching the day when the cannabis industry is treated fairly under federal law.
Already a member of NCIA but want to enhance your support for this vital work? Sponsor a quarterly Cannabis Caucus event in a city near you! All profits from event sponsorships support the efforts of our robust team in D.C.
NCIA Update From Capitol Hill
NCIA’s team in Washington, D.C. and our allies in Congress have been busy advancing cannabis reforms on Capitol Hill over the last couple of weeks. The Congressional appropriations process for the FY2019 federal budget is well under way and cannabis has been at the center of some of the debates around government spending.
Last week, the Senate Appropriations Committee approved legislation that would renew protections for state medical cannabis programs when the current spending budget expires in September. The language, which was introduced by Sen. Patrick Leahy (D-VT), prevents the Department of Justice from using any resources to target medical cannabis patients or providers who are in compliance with state laws.
While this provision has been amended into the budget since 2014, this is the first time that this provision has been included in the original language of the spending bill by either chamber of Congress. Thanks to the hundreds of member-businesses that have invested in NCIA’s work on Capitol Hill over the years and the growing public support for national cannabis reforms, this policy is no longer a controversial issue for Congress.In fact, leading up to the Senate hearing, Sen. Lankford (R-OK) attempted to include a budget rider that would effectively nullify the medical cannabis protections but later withdrew it, citing lack of support.
Over on the House side, an amendment offered by Rep. David Joyce (R-OH) which would have restricted the Treasury Department from using tax dollars to sanction banks for providing financial services to the legal cannabis industry came very close to passing but ultimately did not make it into the budget package. NCIA is working with our allies in the Senate to include the banking protections in that chamber’s version of the federal budget in the days ahead.
Another champion for social justice and sensible cannabis policies, Rep. Barbara Lee (D-CA), introduced a first-of-its-kind resolution bringing attention to the racially discriminatory enforcement of marijuana prohibition. Lee’s Realizing Equitable & Sustainable Participation in Emerging Cannabis Trades (RESPECT) Resolution calls on states with legal cannabis to enact policies to ensure that people of color and communities that have suffered the most under prohibition policies have equal access to business opportunities within the emerging legal cannabis industry.
NCIA applauded Rep. Lee and the bipartisan group of lawmakers who are leading the charge on tackling this important issue.
Meanwhile, other nations may be surpassing the U.S. in enacting sensible marijuana policies. Just today, the Canadian Parliament passed legislation that would legalize adult-use cannabis for our neighbor to the North beginning in October 2018. For more information about how the U.S. cannabis industry risks falling behind other nations due to outdated federal laws, download NCIA’s recent white paper, “How the U.S. is Falling Behind in the Global Cannabis Market.”
Stay engaged with NCIA for more news about the advancement of federal cannabis reforms and to learn about how you can get more involved.
Our Members in Action at NCIA’s 2018 Cannabis Industry Lobby Days
by NCIA Editorial Staff
The cannabis industry has seen exponential growth in the mainstream support for regulated cannabis markets from both sides of the political aisle. This progress is a direct result of the relationships NCIA has built on Capitol Hill, as well as the personal stories told by our members each year at our annual Lobby Days events in Washington, D.C. NCIA’s 8th Annual Cannabis Industry Lobby Days, hosted May 21-23, was the industry’s most impactful fly-in yet, as our members made more inroads to Congress at a time when the nation has reached a tipping point in the fight to protect legal cannabis.
“So many more people keep coming to Lobby Days which is amazing to see,” said Karson Humiston, founder of Vangst. She’s one of Forbes’ 30 under 30 and the only female in cannabis to make the list. She’s focused on telling members of Congress about the potential for job creation and the economic impact of a fully recognized cannabis industry. “We are talking about jobs as much as possible in order to educate members of Congress about the economic stimulation regulated cannabis is bringing to the states and the need for federal legalization,” she said.
NCIA announced the release of its 2018 State Cannabis Progress Report during this year’s Lobby Days. The publication outlines a myriad of economic and social benefits already being realized by states with successful cannabis programs, including job creation, tax revenue, and reductions in crime and teen use.
So far 2018 is shaping up to be much different from the past seven years, largely because of Republican backlash against Attorney General Jeff Sessions attempting to ramp up federal interference in state cannabis programs by rescinding the Cole Memo. Historically, the GOP has been less publicly supportive of reforming cannabis laws, although there has been a strong current of support among certain segments of the party. Now, they listen and many have even joined us in support of banking and tax reforms needed for our industry to reach its full potential, in addition to their traditional support of federalism issues related to cannabis. Advocates, patients, and NCIA member-businesses all over the United States are keeping this positive momentum going.
At the Lobby Days welcome reception on the evening of Monday, May 21, NCIA Executive Director Aaron Smith said he was delighted with the turnout. “There are so many new faces, so many old friends, and Lobby Days veterans,” he told the audience of cannabis professionals, who had just arrived in Washington prior to the two full days of meetings with congressional offices. “Starting tomorrow, we will descend upon Capitol Hill to show lawmakers what a responsible, politically engaged cannabis industry looks like.” He called Lobby Days one of the cannabis industry’s most important events of the year.
NCIA member and founder of Washington, D.C.’s National Cannabis Festival and the National Cannabis Policy Summit, Caroline Phillips, said that she was proud to see so many members coming to her backyard to demonstrate their unity. “This is a really wonderful opportunity to share with members of Congress the diverse and innovative ideas of the cannabis industry and to show off the professionalism, creativity, and care that the people in the industry put into their work, “she added. “I think a lot of members on the Hill are starting to understand the cannabis industry is a lot more than just stereotypes, and for them to have one-on-one interactions with some of the best professionals in our industry is extraordinarily valuable.”
New to Lobby Days was Attorney Blake Mensing. He was eager to join the crowd of professionals to advocate for the fair treatment of cannabis businesses. “I think that this is the eighth year that this is happening really shows that the industry is coming out of the shadows and the momentum has built to the point that there’s a small probability that things are going back to the way they were [prior to the reform victories of the last decade].” Mensing founded The Mensing Group after he left his job as a Municipal Attorney in Massachusetts to start a cannabis-only practice. “It’s the first time I’ve ever had fun being a lawyer,” he remarked before heading into Senator Orrin Hatch’s (R-UT) office.
Professional football player Mike James also joined NCIA this year to advocate on behalf of his fellow athletes who would prefer to treat their health issues with medical marijuana instead of opiates. The active NFL running back has played for the Tampa Bay Buccaneers and the Detroit Lions during his career, which has wreaked havoc on his body, leaving him with chronic pain that he used to treat with opioids. “Within the NFL, I’m trying to go through their process and change policy. That way, hopefully, they can be an example for society,” he said. Currently a free agent, he’s the first and only active player with a medical marijuana card.
From the need to expand medical access to cannabis, to tax and banking reform, to addressing the injustice of racially disproportionate marijuana enforcement, NCIA hit the Halls of Congress to educate members of Congress and their staffs on what’s happening in their own backyards and the successes of regulating cannabis.
For example, when it comes to tax reform, Heather Sullivan of 3C Consulting said the cash-flow is only one of the issues they have to worry about from the 280E tax burden. “It’s a tough decision come tax season,” she said. “Do you set aside those tax rates so you don’t have that money to use for other things for your business, or do you play the game and run the risk that you’re not going to get audited?” Many cannabis businesses face similar issues, which can effectively ruin a company over time.
There were many Congressional offices that were receptive to the efforts and positions of NCIA members during Lobby Days. Heather took a meeting with Sen. Bernie Sanders’ (I-VT) office, for example, and after leaving the meeting she felt that it went wonderfully, stating, “Senator Sanders is a proponent for the safe and regulated use of cannabis whether in the medical side or the adult use side, so it was a meeting that for us was an opportunity to tell Bernie and his staff how much we appreciate the hard work that he’s done, ask him what we can do as an industry to help them continue the progress that they’ve already made and learn more about where his focus is.” Sullivan is well-versed in the issues facing cannabis businesses today and knows many other officials are still in need of convincing.
In spite of heavy opposition from Attorney General Jeff Sessions, as well as House leadership, the cannabis industry saw a huge victory when protections for medical marijuana were included in this years’ fiscal budget. Now, with the help of our members who flew in to speak about their personal issues and experiences, we can all look forward to an even more progress and a better outlook for the U.S. cannabis industry.
The Small Business Tax Equity Act: Supporting a Just Cause at NCIA Lobby Days
by NCIA Editorial Staff
The American cannabis industry should be proud of generating thousands of jobs and billions of dollars in tax revenue for America- but can you imagine how much more we could do without the 280E tax burden?
While it’s an exciting time to be in the cannabis industry, our businesses are struggling under crippling federal taxation. It’s all due to Section 280E of the IRS tax code. A provision originally set out to penalize bad actors in criminal market. Unfortunately for our industry, the federal government has yet to remove the plant from its list of scheduled drugs and continues to deny cannabis as a fully legal product with medical benefits. In sum, if your business touches the plant then you’re in danger of losing your profits under Section 280E of the IRS tax code. It’s a critical time for us to come together and demand change for the industry at the federal level so our business owners can do what they do best; grow their business and give back to the community.
Despite the 280E difficulties, Portland’s MindRite dispensary was voted the most charitable cannabis store by DOPE magazine. Owners Shea and Jaime Conley said they would give even more if their business was taxed like any other industry.
MindRite can’t write off their tens of thousands of dollars in charitable donations because 280E hinders it. “It’s coming out of our profits but its just something we do and has never been up for debate because we believe it’s the business owner’s responsibility to make the community around them better, said Shea. The Conley’s also said they would jump through even more hoops and regulations because it’s a privilege to be able to work in an industry they are so passionate about. But the fact remains, “if 280E wasn’t over our heads,” he said, “we would’ve expanded our business by now.” Without 280E they would reinvest the money they paid the government. “We could have two more dispensaries open,” said Shea.
As tax professional Jim Marty of Bridge Westexplained, businesses can normally retain profits from usual business deductions such as; employee salaries, utilities, facility rent, payments to contractors, and health insurance premiums. For those in the green space, anything outside of the cost of goods sold is not deductible. In efforts to level the playing field, Jim works with clients and lobbyists at the state level to allow for deductions. “We’ve testified in front of committees,” he said, “and some state tax rates are lower than the federal.” In prior interviews with CNBC and FOX Business, his advice is to understand your business plan because 280E creates an impossible situation for legitimate cannabis businesses.
State tax rates may be lower than federal in states like Colorado and Oregon, however, it’s not enough to offset the penalty they pay at the federal level. “We are aware of every dollar that goes out and comes in, it’s a must if you want longevity for your business,” said Shea. The dispensary deals with razor-sharp profit margins in anticipation of paying their penalty to the IRS every April.
It’s frustrating for business owners and employees. Mitch Woolheiser of Northern Lights Cannabis said his business growth is stunted as a direct result of the issue. “I can’t give my employees raises. I can’t put money back into my business. Instead, I’ve been hoarding cash in anticipation of what the IRS is going to take,” he said. In total, cannabis businesses are paying taxes on gross income which often amounts to paying rates that are 70% or higher. Comparatively, the corporate tax rate established by The Tax Cuts and Jobs Act of 2017 is only 21%.
That’s why we are once again taking to the steps of Congress in May for our 8th annual Lobby Days in Washington D.C. While in D.C., Jim said he hopes to meet with President Donald Trump. He said if the executive branch has authority to reschedule marijuana, he’d ask President Trump to categorize cannabis as a Schedule 3 substance or unschedule it completely because it would ensure that section 280E would no longer apply.
We also encourage everyone in support of a healthy, prosperous cannabis industry to talk to their Senators and Representatives about The Small Business Tax Equity Act. The amendment would exempt compliant cannabis businesses from the 280E provision which we believe would inevitably lead to in an influx of employment opportunities with more competitive salaries.
Why it’s Critical For Cannabis Business Owners to Advocate for Policy Reform
by Rachelle Lynn Gordon, NCIA Editorial Contributor
Cannabis legalization reform has been in the works for years and will certainly continue for years to come due to the plant’s Schedule I status. In addition to the activists and organizations who have paved the way for marijuana legalization for decades, such as NORML, Marijuana Policy Project, and Students for Sensible Drug Policy (SSDP), cannabis business owners are now at the forefront of what will most certainly be a multi-billion dollar industry within a short matter of time. But why is it important for these cultivators, dispensary owners, and investors to be directly involved with legalization advocacy?
“Advocacy is critical at this stage, where there is still so much progress to be made at the state and federal levels,” says David Murét, Co-founder & COO of Viridian Staffing. “While I believe that national legalization is now a foregone conclusion, the form in which it takes and who it will end up benefiting is still an open question.”
At this point in time, 30 states and the District of Columbia have legalized medical and/or adult-use cannabis, each one with their own set of rules and regulations. As more and more states begin to come online and design their own programs, lawmakers will look to states where cannabis is already legal in order to learn from both successes and mistakes. At the federal level however, things are far more complicated.
While marijuana remains an illegal drug in the eyes of the federal government, certain protections are in place for businesses that are operating in compliance with their own states’ regulations. Several members of Congress representing these states have been pushing for even further protections and/or straight legalization, in spite of current Attorney General Jeff Sessions’ staunch anti-cannabis stance. In January, Sessions rescinded the Cole Memo, which had previously stated that federal funds shall not be directed towards enforcing federal cannabis policy within states that have passed for those operating in compliance with the items stated in the memo. However, this doesn’t mean that state prosecutors have to go after compliant businesses
Fortunately, the move was a moot point. A rider bill in the federal budget proposal, which is essentially a must-pass in order to prevent a government shutdown, maintained the protections that the Rohrabacher-Farr amendment (now Rohrabacher-Blumenauer amendment), which prevents the DOJ from going after state-legal medical cannabis. A bipartisan group of 62 members of Congress sent a letter to House appropriations leaders calling for action.
“We respectfully request that you include language barring the Department of Justice from prosecuting those who comply with their state’s medical marijuana laws,” the lawmakers, led by Reps. Dana Rohrabacher (R-CA) and Earl Blumenauer (D-OR), wrote. “We believe such a policy is not only consistent with the wishes of a bipartisan majority of the members of the House, but also with the wishes of the American people.” These protections are now included through September 30th.
David Sutton, President & COO of NanoSphere Health Sciences, agrees that time is of the essence in order to create new legislation that will positively impact the industry in years to come.
“Cannabis business owners and professionals have to participate in advocacy,” he argues. “No matter how many states adopt some form of cannabis legalization, the industry still needs change at the federal level. Without a federal shift in cannabis policy, operators in the industry will remain hampered and handcuffed from growth.”
Many canna-business owners are not only involved with pro-legalization policy efforts with the industry’s future in mind, but also the end consumers. High-profile cases of medical marijuana patients becoming ill due to flower containing mold and instances of widespread pathogen prescences from certain cultivators have increased efforts to prevent these products from getting to market.
“We have a responsibility to ensure this business grows in the right way,” explains Brett Johnson, Founder & CEO of Spectrum-Gro. “We have to be the adults in the room. I am always advocating for the end users – we need to guarantee safe and consistent products that are free from harsh chemicals and other pathogens. If the current leaders in this industry do not advocate for the future, there could be negative results across the board – from cultivation to the consumer.”
There are many ways business owners and professionals within the cannabis space to get involved with advocacy. NCIA Lobby Days brings hundreds of industry professionals and thought leaders to Washington, D.C. in order to tell their stories to lawmakers and push for cannabis reform. In addition, working with local organizations within their own states and jurisdictions is a wonderful way for entrepreneurs to spread awareness and potentially help build legislation in their communities.
“If we want to see how big the industry could be and how many lives can be changed for the better, you cannot simply rely on just hope, everyone needs to act,” adds Sutton. “Change comes from the masses and the masses need each and every owner and professional to participate in industry advocacy.”
Rachelle Lynn Gordon is a Minneapolis-based writer and reporter and graduate of Hamline University. She has contributed to publications such as Cannabis Now Magazine and High Times.
News Alert! Omnibus Update: Medical cannabis businesses protected through September 30
by Michelle Rutter, NCIA Government Relations Manager
After years of continuing resolutions and many rounds of negotiations, Congress reached a budget deal and passed a new omnibus spending package that funds the government through the remainder of FY2018, which ends on September 30.
This new spending bill does include the Leahy amendment (formerly the Rohrabacher-Farr amendment), which prohibits the Department of Justice from using tax dollars to enforce federal law against state-legal medical cannabis patients and businesses. Following the rescission of the Cole Memo in January by Attorney General Jeff Sessions, NCIA and our allies in Washington, DC pushed even harder to ensure that this language, which has been included in federal appropriations bills since 2014, was included in the spending package for the remainder of FY2018. In addition to language protecting state-legal medical cannabis programs, the omnibus bill unfortunately also included a provision that continues to block Washington, DC from taxing and regulating adult-use cannabis, despite the fact that voters approved the legalization measure nearly four years ago.
In normal budget cycles, Congress passes a fiscal year budget that goes from October 1 until September 30. But in these extraordinarily partisan times, Congress has been unable to agree on an annual budget and has patched together short-term funding bills called Continuing Resolutions (CR’s), which maintains current funding levels. Since just last September, there have been five such short-term CR’s. All of these CR’s have included the Rohrabacher-Farr (now Rohrabacher-Blumenauer in the House and the Leahy amendment in the Senate) amendment which protects medical cannabis businesses, programs, and patients in states where it’s legal. The last of these continuing resolutions is set to expire on Friday, March 23rd. The new omnibus spending bill will continue to fund the government through the remainder of FY2018, which ends on September 30, 2018.
The congressional appropriations process for FY2019 is already underway. While we have achieved a victory in extending medical cannabis protections, there’s much more work to be done. NCIA is lobbying not only to continue the medical cannabis protections, but to also expand protections to protect all legal cannabis businesses from federal interference, including adult-use businesses operating in the eight states with such programs. We are also working to pass a cannabis banking amendment, as well as an amendment that would protect veterans who choose to participate in state-legal cannabis programs. In addition to all of these appropriations amendments, NCIA is still working to pass legislation that would solve the cannabis banking problem, amend IRC Section 280E, and, ultimately, end cannabis prohibition.
VIDEO: Aaron Smith invites you to #NCIALobbyDays this May 21-23
Over the last several years the cannabis industry has experienced unparalleled economic growth. But, as business owners in the industry, we know first hand that this success also comes with persistent challenges. As long as we still experience the crippling effects of federal policies like 280E and unfair banking regulations, our success is merely potential.
This is why it is essential that cannabis business owners are also industry advocates. With the challenges posed by the current administration and the uncertain federal policies governing our industry, it is critical that we make our voices heard on Capitol Hill.
Join 300+ cannabis industry professionals at NCIA’s 8th Annual Cannabis Industry Lobby Days on May 21-23 in Washington, D.C. to advocate for our industry and forge a unified front with the industry’s most politically engaged leaders. Register before April 30 for a chance to win tickets and travel for two to #CannaBizSummit July 25-27.
Watch this video to hear more from NCIA’s Co-founder and Executive Director Aaron Smith.
For more information about NCIA’s 8th Annual Cannabis Industry Lobby Days,
by Michael Correia, NCIA Director of Government Relations
Following a brief shutdown in the wee hours of Friday morning, Congress came to yet another short-term budget deal to continue funding the federal government until March 23, 2018.
In normal budget cycles, Congress passes a fiscal year budget that goes from October 1 until September 30. But in these extraordinarily partisan times, Congress has been unable to agree on an annual budget and has patched together short-term funding bills called Continuing Resolutions (CR’s), which maintains current funding levels. Since just last September, there have been five such short-term CR’s. These short-term funding bills have not only hampered basic government functions, but have also affected military readiness and has even led to a federal government shutdown, which has lowered the public’s already dismal opinion of Congress.
After much negotiation between House and Senate leaders, it appears that the parameters of a two-year budget solution have been agreed to. The new budget deal is both bipartisan and bicameral (which has become a rarity in Washington, D.C.) and addresses many controversial issues that have hindered previous negotiations. This new budget deal increases funding levels for the military, provides billions in disaster relief, addresses infrastructure, education, child care, and attempts to combat the opioid epidemic.
But, in typical Congressional fashion, the details still have yet to be finalized. The Congressional Leaders have agreed to work with the leaders of the appropriations committees to ensure that all budget priorities are met.
So, what does this mean for your business and what does this mean for medical cannabis protections?
Since 2014, the federal budget has included language that protects medical cannabis operators from Department of Justice prosecution. These protections will be maintained in this short-term funding bill, so medical cannabis programs and businesses are protected until at least March 23, 2018. However, it is imperative that Congress maintains these protections (and even expand protections for adult-use) in the longer budget that is being negotiated between now and March 23. NCIA will continue our Congressional lobbying efforts and work with our partners and other advocates to continue these protections.
Our team in Washington, D.C., works everyday to make the industry’s voice heard, but nothing matches the power of a personal story personally told. Remember to join us for NCIA’s 8th Annual Cannabis Industry Lobby Days this year on May 21-23 in Washington, D.C.
Department of Justice Rescinds Cole Memo: Here’s what to expect
This morning, Attorney General Jeff Sessions announced the Department of Justice’s move to rescind the “Cole Memo” and two additional memos related to marijuana enforcement policy. These memos, issued in 2013 and 2014, have helped to clarify the Department’s response to state-legal cannabis activity.
This is disturbing news for the cannabis industry and the majority of U.S. voters who support legal cannabis. However, the rescinding of this memo does not necessarily mean that any major change in enforcement policy is on the horizon. This has been, and still will be, a matter of prosecutorial discretion.
NCIA’s team in D.C. is working tirelessly to ensure that the administration and the Department of Justice uphold President Trump’s campaign promise to not interfere with state-legal cannabis programs by making sure they understand that regulated cannabis is successfully undercutting the criminal market, while funding important state programs.
At this time, it’s critical the cannabis industry unify to amplify that message so it’s crystal clear. It’s also imperative that Congress take action to align federal legislation with the majority of states, which now allow some form of legal cannabis.
One pressing issue before Congress is Senator Leahy’s appropriations amendment which would prevent the DOJ from using resources to undermine state medical cannabis laws. (The Senate’s version of the Rohrabacher-Blumenauer Amendment in the House.)
Please call your U.S. Senators today and urge them to include the Leahy Amendment in the upcoming Omnibus Appropriations Bill.
Talking points to help guide your call are included on our online action page.
To learn more about NCIA’s advocacy efforts or the NCIA-PAC, please contact NCIA Government Relations Manager, Michelle Rutter by emailing Michelle@thecannabisindustry.org.
And, of course, if your business is not yet a member of NCIA, please join today so that we have the resources we need to prevent any rollback of the progress we’ve made in recent years.
In November’s Member Spotlight Video, NCIA visits with Rabbi Kahn of Takoma Wellness Center in Washington D.C., a family-owned and operated medical cannabis dispensary, and a member of NCIA since 2014. He tells us about the challenges of opening the business in the Takoma Park neighborhood of D.C. near the Maryland border.
Learn more about Takoma Wellness Center from Rabbi Kahn.
I’m calling today to ask for your Senator’s support of the Leahy amendment to the appropriations bill. This amendment protects medical cannabis businesses and patients in states where it’s legal. It does this by barring the Department of Justice from using its funds to interfere with state legal medical cannabis programs.
This provision has been included in federal law since 2014, and will continue to be in effect until December 8th, 2017 when the current funding bill runs out.
46 states have legalized some form of cannabis. Additionally, over 90% of individuals believe medical cannabis should be legalized and 73% do not support federal law enforcement actions that undermine state marijuana laws.
The cannabis industry supports tens of thousands of jobs, tens of millions in tax revenue, and billions in economic activity in the United States.
Thanks for taking my call, I appreciate you listening to my concerns.
Video: The Cannabis Industry Speaks Out in D.C.
Last month, more than 250 cannabis industry professionals came to D.C. for NCIA’s 7th Annual Cannabis Industry Lobby Days. In this month’s video newsletter, we capture highlights from this energizing two days of advocacy, education, and community. Watch the video to re-live the experience, or live vicariously through your fellow NCIA members. And plan to join us next year to add your voice!
Were you there? How did your meetings on Capitol Hill go? What was your favorite part of the experience? Please send a brief testimonial of your experiences to NCIA Communications Manager Bethany Moore by emailing bethany@thecannabisindustry.org.
Thank you to the co-chairs of NCIA’s Policy Council for their premier sponsorship of our 2017 Cannabis Industry Lobby Days:
The Cannabis Industry Takes D.C. – Highlights from NCIA’s 7th Annual Lobby Days
by Michelle Rutter, NCIA Government Relations Manager
With the uncertainty that the new administration has brought the cannabis industry, it’s become more important now than ever before to be proactive in government and in our nation’s capital. Last month, NCIA did just that by hosting our 7th Annual Cannabis Industry Lobby Days. 250 cannabis industry professionals joined us in Washington, D.C., to meet with more than 300 Capitol Hill offices and tell their stories.
Lobby Days kicked off with a breakfast and training session for our attendees, where they learned lobbying basics and were briefed on our talking points. There, attendees met with their groups and gathered their materials to drop off in Capitol Hill offices for staff.
Once the training session was complete, we led our attendees down to our group photo location. Every year, NCIA has nearly doubled the number of participants at Lobby Days.
Following our (very large!) group photo, meetings on Capitol Hill commenced. We scheduled more than 300 meetings with congressional opponents, advocates, members from relevant committees, and others. In addition to the meetings we had scheduled, we also dropped in on various offices and left information about our issues with staff for them to review. In all, we made contact with nearly all of the 535 congressional offices on the Hill!
Simultaneously during our Hill meetings, NCIA hosted a private luncheon for Rep. Carlos Curbelo (R-FL), the new sponsor of H.R. 1810: The Small Business Tax Equity Act, which addresses the unfair burden of 280E faced by the cannabis industry. Over the years, NCIA has consistently worked to increase our Capitol Hill advocates and are thrilled that Congressman Curbelo will be leading the charge on 280E reform.
After a busy day of meetings on Capitol Hill, NCIA hosted a fundraiser for the NCIA-PAC, the Political Action Committee (PAC) for cannabis industry professionals. We had six members of Congress show their support by joining us: Reps. Earl Blumenauer (D-OR), Salud Carbajal (D-CA), Carlos Curbelo (R-FL), Ruben Gallego (D-AZ), Jared Polis (D-CO), and Dina Titus (D-NV).
We were thrilled to raise $60,000 for the NCIA-PAC, which supports federal candidates who are open to the challenges and concerns our industry faces, support cannabis reform at the federal level, and introduce or support pro-cannabis legislation.
Our second day got off to a great start with a press conference held in front of the United States Capitol Building. NCIA executive director Aaron Smith was joined by seven members of Congress (Reps. Blumenauer, Steve Cohen [D-TN], Curbelo, Diana DeGette [D-CO], Eleanor Holmes-Norton [D-DC], Polis [D-CO], and Titus [D-NV]) to address the need for reform federal marijuana laws.
Overall, it was an incredibly successful Lobby Days, and our biggest yet! We’ve already seen co-sponsorship on cannabis-related bills increase, and it is undoubtedly related to the meetings and personal stories NCIA members shared. We look forward to seeing you all in Washington, D.C., for our 8th Annual Cannabis Industry Lobby Days in 2018!
During the Senate confirmation hearing, Barr stated that he would respect state cannabis laws and legal businesses when it comes to enforcing federal marijuana statutes. In response to questioning from Sen. Cory Booker (D-NJ) and Sen. Kamala Harris (D-CA), Barr stated that if confirmed, his “approach to this would be not to upset settled expectations and the reliant interests that have arisen as a result of the Cole Memorandum.” Upon further questioning, he stated that he “is not going to go after companies that have relied on the Cole Memorandum.” (It’s also important to note that the two Senators who asked Barr about cannabis policy are both running for president). 
On June 19, Canada 
“So many more people keep coming to Lobby Days which is amazing to see,” said Karson Humiston, founder of 
There were many Congressional offices that were receptive to the efforts and positions of NCIA members during Lobby Days. Heather took a meeting with Sen. Bernie Sanders’ (I-VT) office, for example, and after leaving the meeting she felt that it went wonderfully, stating, “Senator Sanders is a proponent for the safe and regulated use of cannabis whether in the medical side or the adult use side, so it was a meeting that for us was an opportunity to tell Bernie and his staff how much we appreciate the hard work that he’s done, ask him what we can do as an industry to help them continue the progress that they’ve already made and learn more about where his focus is.” Sullivan is well-versed in the issues facing cannabis businesses today and knows many other officials are still in need of convincing.
