HHS Recommends Rescheduling: Now What? | 9.14.23 | Fireside Chats with NCIA’s Government Relations Team

NCIA’s #IndustryEssentials webinar series is our premier digital educational platform featuring a variety of interactive programs allowing us to provide you timely, engaging and essential education when you need it most. The Fireside Chat series of NCIA’s #IndustryEssentials webinars are an opportunity for industry professionals to hear from our government relations team and guests about the latest developments in federal policy LIVE.

For more than fifty years, the federal government has maintained that cannabis is a Schedule I drug, meaning that it has a high potential for abuse and no accepted medical value.

That recently changed when the Department of Health and Human Services (HHS) recommended to the Drug Enforcement Administration (DEA) that cannabis be placed in Schedule III, meaning that it has moderate to low abuse potential, a currently accepted medical use, and a low potential for psychological dependence.

There’s no doubt this move was an historic one– but what does it mean? What’s next? How will it impact your business? Join NCIA’s Aaron Smith and Michelle Rutter Friberg as they unpack all these questions surrounding cannabis rescheduling impact and more!

Panelists:

Michelle Rutter Friberg
Director of Government Relations
NCIA

Aaron Smith
CEO & Co-Founder
NCIA

Descheduling, Decriminalizing, Banking, and More

By Madeline Grant, NCIA’s Government Relations Manager

It’s always an invigorating time on Capitol Hill when a new Congress begins to get to work. The atmosphere is unlike any other; Hill offices are getting situated with their staff, hallways are full of exhilarated constituents, freshman members are finding their footing while moving into their offices, and committee assignments are being finalized. Congressional staffers, members of Congress, lobbyists, constituents, and advocates are back in action.

As we gear up for the 118th Congress, let’s take a look at some bills that we will see introduced to address descheduling, decriminalizing, and banking legislative efforts for the cannabis industry.

The Cannabis Administration and Opportunity (CAOA) Act

The long-awaited CAOA was unveiled last congress by Senate Majority Leader Chuck Schumer (D-NY), Senator Cory Booker (D-NJ), and Senate Finance Committee Chair Ron Wyden (D-OR). The comprehensive legalization would end federal prohibition by removing cannabis from the Controlled Substances Act, empower states to create their own cannabis laws, ensure federal regulation protects public health and safety, and prioritize restorative and economic justice. CAOA was first released as a discussion draft last year, alongside a request for comments from stakeholders. The National Cannabis Industry Association worked directly with Senator Schumer’s office and submitted comments to the bill. Although there was no movement, NCIA will continue to work directly with these offices to continue to improve the bill for the cannabis sector.

The States Reform Act

Rep. Nancy Mace’s (R-SC) States Reform Act was introduced last congress by a freshman congresswoman from a state without any cannabis laws. The bill would federally decriminalize cannabis by fully deferring to state powers over prohibition and commercial regulation, regulate cannabis products like alcohol, institute a three percent federal excise tax on those products to fund law enforcement and small business programs, and protect our veterans by ensuring they will not be discriminated against in federal hiring for cannabis use or lose their healthcare, and more. Last year this bill received positive feedback from the industry and NCIA will continue to work with Rep. Mace’s office this congress.

The Marijuana Opportunity, Reinvestment, and Expungement (MORE) Act

The MORE Act would end the criminalization of cannabis for adults by removing it from the list of controlled substances, eliminate related criminal penalties, and take several other major steps toward criminal justice reform, social justice, and economic development. Some key provisions of this bill are automatic expungements, impose a five percent tax on the retail sales of cannabis, create the Office of Cannabis Justice to oversee the social equity provisions, ensure the federal government could not discriminate against people because of cannabis use, and much more. Rep. Jerrold Nadler (D-NY), who served as chair to the House Judiciary Committee, was the sponsor of the bill last congress and was able to advance the bill through the chamber with ease. However, with Republicans winning back the majority in the House, successes like this will be more challenging. Additionally, Rep. Jim Jordan (R-OH), the new chair of the House Judiciary Committee, has not been supportive of the cannabis sector.

The Securing and Fair Enforcement (SAFE) Banking

The SAFE Banking Act aims to protect banking institutions- as well as their insurers- that choose to offer services to legitimate cannabis-related businesses operating in accordance with their respective state laws. The bill prevents federal banking regulators from imposing penalties on depository institutions that offer services to cannabis-related businesses. SAFE Banking is a bipartisan bill that has passed the House seven times. The broad consensus was that inaction on SAFE Banking came down to Senate leadership. As bipartisan Senate discussions materialized towards the end of last Congress, Republican senators requested the Department of Justice (DOJ) to analyze the bill. The DOJ wrote, “because marijuana would remain illegal under federal law, Congress should ensure efforts to provide access to financial services for state-legal businesses does not unintentionally erect obstacles to prosecution of other illicit activity or activities involving money laundering of proceeds of other illegal drugs or sales of marijuana that do not comply with state requirements.” Despite the concerns, the DOJ stated they would be happy to work with Congress on ways to improve the bill. As the 118th Congress begins, we will continue to do what we can to get SAFE Banking to this finish line.

The Harnessing Opportunity by Pursuing Expungement (HOPE) Act

In 2021 Rep. David Joyce (R-OH), who is a co-chair of the House Cannabis Caucus, and Rep. Alexandria Ocasio-Cortez (D-NY) introduced the HOPE Act to help states with expunging cannabis offenses by reducing the financial and administrative burden of such efforts through federal grants. Both lawmakers have advocated for cannabis reform on their respective sides of the aisle, with Rep. Joyce (R-OH) sponsoring the first Republican-led effort to decriminalize cannabis at the federal level in the House. Towards the end of last year discussions surfaced around including the HOPE Act in a SAFE Plus package. Unfortunately, with the end of the congressional session quickly coming to an end, so did the proposed package.

NCIA will continue to work with Capitol Hill offices to advance cannabis policy in the 118th Congress. With a shift in political dynamic, it’s imperative to continue to be a resource for congressional offices. Don’t miss the opportunity to attend our 11th Annual Cannabis Industry Lobby Days will be held May 16-18 in Washington, D.C.! You can register here. If you’re interested in getting more involved in our policy efforts or have questions about NCIA’s lobby days please reach out to madeline@thecannabisindustry.org. Stay tuned for more updates from the Government Relations team and check out last week’s blogs here.

Omnibus Leaves Industry Hanging

by Michelle Rutter Friberg, NCIA’s Deputy Director of Government Relations

Since 2014, federal funding bills, or appropriations bills, have included provisions restricting the Department of Justice from using tax dollars to prosecute or penalize state-legal medical cannabis businesses and patients. Since then, NCIA and others have worked diligently to expand those protections and enact cannabis reform through the budget, with some efforts being more successful than others. Another issue making matters more complicated: the federal appropriations process requires this provision to be approved by congressional process annually, so introducing, lobbying on, and enacting these provisions has to reoccur every year.

Last week, Congress passed the most recent omnibus appropriations bill, which is increasingly used to group together the budgets of all departments in one year. Keep reading to find out what provisions related to cannabis were included (or weren’t!) and why it matters:

PROTECTIONS

If you’ve been in cannabis for a while, you might remember when medical cannabis protections were first enacted in 2014. Back then, the provision was known as the “Rohrabacher-Farr Amendment,” named for then-Reps. Dana Rohrabacher (R-CA) and Sam Farr (D-CA). This amendment forbids the Department of Justice (DOJ) from spending money to prevent the implementation of state-level medical cannabis programs, in addition to removing funding for federal medical cannabis raids, arrests, and prosecutions in states where medical cannabis is legal. To put it simply: the DoJ can’t use any of its money against state-legal, compliant medical cannabis businesses.

So, the omnibus had some good news and some bad news regarding protections for cannabis businesses from the Department of Justice. Good news? Those protections for medical cannabis businesses, patients, and programs remain in place. Bad news? Congressional leaders declined to expand those protections to include all cannabis businesses, despite the fact that the House has voted twice in the past to do so.

WASHINGTON, D.C.

For decades, Congress has used its power and jurisdiction over Washington, D.C. as a bargaining chip and test subject for various policies, and cannabis is no exception.

Washington, D.C. voted to legalize adult-use cannabis via Initiative 71 in 2014. However, because the Constitution gives Congress jurisdiction over the District of Columbia, Washingtonians have been, and continue to be, unable to implement the taxed and regulated sales of cannabis for adults. (That hasn’t stopped a flourishing gray market, but that’s a topic for another blog!)

One Congressman, in particular, has obstructed D.C’s cannabis market: Andy Harris, the lone Republican in the House from the state of Maryland. The “Harris Amendment,” which prevents legal sales from occurring in D.C., has been included in every appropriations bill since – again, despite the fact that House Democrats have voted to strip the language multiple times.

The inclusion and maintenance of this provision – especially while Democrats control both chambers of Congress – is simply unacceptable and inexcusable. To that end, NCIA recently signed on to a letter urging leadership to remove the language. It’s also critical to point out that Washington, D.C. is one of the places where disparate cannabis arrests occur at an alarming rate, making the need for reform even more dire.

EXPUNGEMENTS

A new appropriations amendment that NCIA supported was also included in the most recent omnibus. The language, championed by Cannabis Caucus Co-Chair Dave Joyce (R-OH), would allow JAG funding to be used for the cost of state and local cannabis expungements and record clearing. This is a small but incredible reform that we hope will be the first step in providing justice to individuals impacted by the War on Drugs.

VAPING

The omnibus also included report language related to cannabis. Report language is non-binding and essentially encourages an agency to do something. In this case, Congress is urging NIDA (the National Institute on Drug Abuse) to conduct interdisciplinary research on the relationship between the vaping of tobacco and marijuana, with an emphasis on risk perceptions, decision-making, and neuroscience.

Interestingly, the appropriations process for FY2023 is beginning to get underway already. NCIA will be working with appropriators and other allies in Washington, D.C. to maintain provisions that protect cannabis businesses and consumers while stripping those that deny opportunity and justice to others. Interested in learning more about appropriations, or working with our team on an amendment? Learn more about our Evergreen Roundtable and committees by visiting our website!

House Rules Committee Weighs In On Cannabis Appropriations Amendments

By Morgan Fox, NCIA’s Director of Media Relations

The process of approving the federal budget is moving full steam ahead, with the House Rules Committee considering several amendments related to cannabis to a series of funding bills this week. Amendments that pass this committee move on to a full vote on the House floor.

In terms of overall cannabis policy reform, the most prominent amendment is one that would prevent the Department of Justice from using funds to interfere with state adult-use and medical cannabis programs or target people and businesses that are in compliance with state cannabis laws. This amendment was offered by bipartisan congressional cannabis champions Reps. Earl Blumenauer (D-OR), Tom McClintock (R-CA), Eleanor Holmes Norton (D-DC) and Barbara Lee (D-CA). The amendment was ruled in order Wednesday and will proceed to a vote, possibly as soon as this week.

Even though the DOJ has generally been respecting state cannabis laws in recent years, passage of this amendment in the final federal budget would add the force of law to that policy for the next fiscal year, providing peace of mind for tens of thousands of regulated cannabis businesses and millions of consumers across the country. This would also add significant momentum to congressional efforts to remove cannabis from the schedule of controlled substances and regulate it at the federal level in separate stand-alone legislation.

Provisions to prevent the DOJ solely from targeting state-legal medical cannabis programs and providers have been approved by Congress every year since 2014. With public support for medical cannabis at roughly 90%, these protections have become mostly a non-issue in Congress and have been included in the original base language of the relevant House appropriations bills since 2019.

The amendment extending those protections to state adult-use programs was approved by the House in the budget votes in 2019 and 2020. Unfortunately, it did not receive the same support in the Senate and was not included in the final funding packages approved by the previous Congress.

An amendment that would remove the renewal of medical cannabis program protections from this legislation, flying in the face of long-supported policy and unnecessarily taking up lawmakers’ time, was also introduced by Rep. Doug LaMalfa (R-CA) and ruled in order.

Rep. LaMalfa, a staunch prohibitionist, has also introduced several amendments to appropriations bills to increase DEA funding for eradication efforts. He made headlines recently when his office released videos of him joining law enforcement in bulldozing outdoor cultivation sites in Siskiyou County, California while grandstanding for the camera and ripping off quotes from the film Apocalypse Now. These sites were located in primarily Hmong communities, a Southeast Asian ethnic diaspora that alleges that the county has prevented its members from obtaining cannabis licenses and prevented water shipments to their communities with serious harm to the quality of life there. LaMalfa’s behavior in these videos is particularly offensive given that many Hmong fled their homes to settle in the United States during and following the Vietnam War after facing persecution for supporting America in that conflict.

Unfortunately, some positive cannabis amendments were ruled out of order by the committee this week and will not be voted upon in this legislation. Delegate Norton offered a pair of provisions that would have prevented the Dept. of Housing and Urban Development from using funds to punish residents of federally assisted housing for state-legal cannabis use in adult-use and medical states, respectively. These reforms are incredibly important, as people living in federal housing can be and are frequently evicted from their homes if they or anyone in their household exercises their legal rights or uses the medicine that works best for them. This leaves many people with no place to legally use cannabis, leading to increased public consumption in low-income communities and continued racial disparities in arrests and citations.

On the positive side, an amendment from Rep. Kurt Schrader (D-OR) to highlight the need for the Food and Drug Administration to establish regulations for CBD products was also ruled in order and approved.

Last week, another bad amendment, introduced by Rep. Debbie Lesko (R-AZ), to remove language from the original legislation that would allow federal funding for universities that are conducting cannabis research was ruled in order but voted down in the House.

The House appropriations bills have a broad range of other cannabis provisions related to topics like banking reform, research, law enforcement funding and grant programs, federal employment guidelines, and allowing the District of Columbia to finally regulate cannabis after it was legalized by voters in 2014. We’ll get into these in more detail in the coming weeks as we get closer to a full vote in the House. Stay tuned!

What To Watch: The Executive Branch Edition

by Michelle Rutter Friberg, NCIA’s Deputy Director of Government Relations

Last week, I wrote about what to expect during the 117th Congress. This week, I want to highlight the incoming Biden Administration, and the various agencies and Cabinet officials that could affect cannabis policy going forward over the next four years.

The tradition of the Cabinet dates back to the beginnings of the Presidency itself. Established in Article II, Section 2, of the Constitution, the Cabinet’s role is to advise the President on any subject he may require relating to the duties of each member’s respective office. The Cabinet includes the Vice President and the heads of 15 executive departments — the Secretaries of Agriculture, Commerce, Defense, Education, Energy, Health and Human Services, Homeland Security, Housing and Urban Development, Interior, Labor, State, Transportation, Treasury, and Veterans Affairs, as well as the Attorney General.

Here’s my breakdown of the top three agencies I’ll be watching:

Treasury Department

In February 2014, the Treasury Department issued guidance to clarify Bank Secrecy Act (BSA) expectations for financial institutions seeking to provide services to marijuana-related businesses. However, over the last seven years, the policy landscape surrounding cannabis has changed dramatically — at the time this guidance was issued, only Colorado and Washington had legalized adult-use cannabis. Now, there are 15 states plus the District of Columbia that allow for the adult-use of cannabis and 36 states with medical cannabis laws.

Incoming President Biden has nominated former Federal Reserve Chairwoman Janet Yellen for the post of Treasury Secretary. Though her position on cannabis is relatively unknown, it’s definitely possible that this guidance could be updated or expanded. Additionally, if the SAFE Banking Act is passed by Congress, the Treasury Department would then be in charge of ensuring that the implementation of that legislation goes smoothly.

Department of Justice (DoJ)

Here’s the big one everyone in cannabis will be watching: the Department of Justice. President Biden has selected Merrick Garland as his nominee for Attorney General, and everyone seems to be wondering the same thing: could there be a new “Garland Memo” ala the Cole Memo?

If you’ll remember, during the Obama Administration in 2013, the Department of Justice issued the Cole Memo, which outlined enforcement priorities for the Department as states were beginning to set their own cannabis policies. Under the Trump Administration, that memo was rescinded in January 2018 by then-Attorney General, Jeff Sessions.

It’s certainly possible that a Garland DoJ could unveil a new cannabis-related memo. Outside of enforcement priorities, the Department could also direct other agencies to reevaluate their policies around cannabis and housing, immigration, and the armed forces.

Small Business Administration (SBA)

In 2018, the Small Business Administration (SBA) came out with a notice to all employees and lenders that updated their policies surrounding marijuana businesses. They stated, “Because federal law prohibits the distribution and sale of marijuana, financial transactions involving a marijuana-related business would generally involve funds derived from illegal activity. Therefore, businesses that derive revenue from marijuana-related activities or that support the end-use of marijuana may be ineligible for SBA financial assistance.” They then went on to outline the ineligibility of direct and indirect marijuana businesses, as well as hemp-related businesses (this was pre-2018 Farm Bill) to participate in SBA programs.

This could all change under a Biden Administration, however. The President-elect has tapped Isabel Guzman as Small Business Administrator — she currently serves as the director of California’s Office of the Small Business Advocate. While her position on marijuana is unknown, I’m incredibly hopeful for reform under Guzman — her familiarity with small businesses in California means she is surely well informed on the struggles the cannabis industry faces.

These are just a few of the agencies that I’m watching, but there are many others to keep an eye on: the Veterans Administration, Health and Human Services, and FDA, just to name a few. And, as always, NCIA will be working to advance positive reforms within the executive branch at every opportunity.

Make sure you’re subscribed to NCIA’s CannaBusiness Leader to stay up to date on the latest and find me over on NCIA Connect with any questions or feedback!

Picking Up Speed In The 116th Congress – An Overview Of Our Progress

by Madeline Grant, NCIA’s Government Relations Manager

We’ve seen an extraordinary amount of momentum sweep through Capitol Hill so far this Congress. The U.S. House of Representatives passed the Secure and Fair Enforcement (SAFE) Banking Act of 2019 and the Judiciary Committee marked up the Marijuana Opportunity Reinvestment and Expungement (MORE) Act of 2019. On top of these significant policy gains and historic achievements, we’ve seen an increase in cannabis-related bills, committee hearings, amendments, and markups.

With strong Democratic leadership on the House side, the question of legalizing cannabis has even been put on the table. Conversations are happening in hearings and markups that will help educate lawmakers. For example, as cannabis remains a Schedule I substance, significant federal research is still unattainable. These are the important conversations we are having with lawmakers. The SAFE Banking Act passed with overwhelmingly bipartisan support, with a vote of 321-103. This bill has been supported by the American Bankers Association, the Governors Association, the National Association of Attorneys General, and the credit unions across the country. The McClintock-Blumenauer-Norton amendment, which would prohibit the Department of Justice from interfering with state cannabis programs, passed the House with a vote of 267-165. This historic vote shows just how far we have come and with continued momentum where we can go.

Now, we need your help. It is more important than ever that Congress hears from their constituents. Your stories and experiences are what resonates the most with Hill offices. Now that the SAFE Banking Act passed the house, we need to turn our attention to the Senate.

Please call your U.S. Senators and urge them to support S.1200, the SAFE Banking Act, which prevents federal banking regulators from punishing banks for working with cannabis-related businesses that are obeying state laws or halting their services, taking action on loans made to those businesses, or limiting depository institution’s access to the Deposit Insurance Fund. As you call your Senators, be sure to explain the frustration you have had with a lack of access to banking. Personal stories resonate with our Congressional offices, so take a few minutes to make these important calls.

To find your Senators, click this link and simply enter your address. The office phone number will pop up next to their photos.

Please join us May 19-21, 2020 for our 10th Annual Cannabis Industry Lobby Days in Washington, D.C. Not only will you meet with congressional offices to discuss priority cannabis legislation, but you’ll get to know other NCIA members from around the country. For more information about Lobby Days, contact Maddy Grant and madeline@thecannabisindustry.org.

VIDEO: June Policy Update With Aaron Smith, NCIA’s Executive Director

There’s been so much progress on cannabis industry issues so far this year. Hear more about the forward movement and victories we’ve seen in Congress on issues like the SAFE Banking Act, which has passed through the House of Representatives and is now in the Senate, and the House also voted to include protections for adult-use cannabis businesses in legal states through the Department of Justice budget vote process. Plus, Illinois becomes the 11th state to enact adult-use cannabis laws. NCIA’s Co-Founder and Executive Director Aaron Smith joins us to review this positive momentum.

Contact your elected officials today and ask them to support pro-cannabis reform legislation!

Progress on the SAFE Banking Act in the House and Senate

Less than two months ago, H.R. 1595: the Secure and Fair Enforcement (SAFE) Banking Act was marked up by the House Financial Services Committee, where it passed out of committee by a margin of 45-15. While the bill must still come to the House floor for a vote by the full chamber and then be taken up by the Senate, let’s take a look at where the bill currently stands.

As a refresher, the SAFE Banking Act would prevent federal banking regulators from punishing banks for working with cannabis related businesses that are obeying state laws or halting their services, taking action on loans made to those businesses, or limiting a depository institution’s access to the Deposit Insurance Fund. The bill would also protect ancillary businesses that work with the cannabis industry from being charged with money laundering and other financial crimes, and requires the Financial Institution Examination Council to develop guidance to help credit unions and banks understand how to lawfully serve cannabis businesses. In the House, the legislation was introduced by Reps. Ed Perlmutter (D-CO) and Denny Heck (D-WA), while the Senate bill was introduced by Sens. Jeff Merkley (D-OR) and Cory Gardner (R-CO).

When the House version of the SAFE Banking Act was introduced in March, you’ll remember it had a historic 108 original cosponsors. As of the beginning of May, the legislation currently has a whopping 172 cosponsors, with 17 members getting on the bill in April alone.

The Senate version of the SAFE Banking Act (S. 1200) was introduced in April with 21 original cosponsors. Currently, the bill is up to 25 cosponsors – that’s a quarter of the entire Senate! Notably, there are six Senators who are running for President in 2020 that have signed onto the legislation.

In addition to gaining more cosponsors in both houses of Congress, other government officials have also thrown their support behind the bill. In April, 27 state banking supervisors signed a letter addressed to congressional leadership that stated, “We urge Congress to consider legislation that creates a safe harbor for financial institutions to serve a state-compliant business or entrusts sovereign states with the full oversight and jurisdiction of marijuana-related activity.”

Even with all this progress and positive signs for the future, we still have some roadblocks in our path to ensuring this legislation crosses the finish line during the current session.

In the House, Republican support is still lagging despite bipartisan original sponsorship. With Republicans making up only 11% of the current cosponsors, we still have much work to do convincing the GOP members of the House to support this sensible legislation.

In the Senate, we will need all the support we can get in Congress to overcome the objections of a key committee head, Sen. Mike Crapo (R-ID), who is the chairman of the Senate Banking Committee. Sen. Crapo will determine whether the SAFE Banking Act can get its first hearing in the Senate, and his recent statements at a conference hosted by the Independent Community Bankers of America (ICBA) that this issue should be left to the Department of Justice highlight the need for us to keep building consensus and momentum to convince him otherwise.

Essentially, we’ve come farther than many thought we would, but there is still much work to do, and we want you to join us!

In just two short weeks, hundreds of cannabis industry professionals from all over the country will descend on Capitol Hill this month for the 9th year in a row for NCIA’s Annual Lobby Days. It’s more important than ever before to make your voice heard and advocate for the federal reforms our industry needs to truly thrive. Whether it’s access to banking for your business, much-needed federal tax reforms, or some of the many other struggles faced by our industry that could be remedied by congressional action, we need you to tell your stories on Capitol Hill with us on May 21-23. See you there!

End of Year Appropriations Deadline Looms

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.

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.

You can get involved and make your mark on Congress by registering for NCIA’s 8th Annual Cannabis Industry Lobby Days in May.

Another Budget Deal: What Does It Mean For You?

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.

As with anything, if you need further clarification or have questions, please contact our Government Relations office.

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.

NCIA’s official statement in response to today’s Department of Justice announcement.

Appropriations Pros and Cons in 2015 for Cannabis

by Michelle Rutter, Government Relations Coordinator

Every year, Congress must pass appropriations legislation to fund the government for the upcoming fiscal year. This annual funding bill has been one of the only avenues by which pro-cannabis reform language can be inserted into the federal budget, due to Congress’ inability to pass meaningful stand-alone legislation addressing the legal cannabis industry.

This year, two riders were included in the budget bill pertaining to cannabis. The first, known as the Rohrabacher-Farr amendment, bans the Department of Justice from spending money to prevent the implementation of state-level medical cannabis programs, in addition to removing funding for federal medical cannabis raids, arrests, and prosecutions in states where medical cannabis is legal. When debated on the House floor this summer, the vote count increased from 219-189 in 2014 to 242-186 this year, with 67 Republicans voting ‘Yes.’ The Rohrabacher-Farr language was included in the final budget bill for the second year in a row, which is a promising sign of progress in Washington, D.C.

A rider known as the Bonamici-Massie amendment, which prevents the DEA from intervening with state-sanctioned and legal hemp, was also included in the final budget package. This section blocks federal money from being used to prevent states from allowing the use, distribution, possession, or cultivation of industrial hemp. It’s important to note that although this progress is promising, the DEA has ignored appropriations language pertaining to cannabis in years prior.

There were other commonsense policy reforms related to cannabis, which were proposed and added to earlier versions of the budget package, but which unfortunately did not make it into the final bill. A crucial example was a provision which would have prevented the Treasury Department from punishing banks that work with legitimate marijuana-related businesses. Another would have allowed Veterans Affairs (VA) doctors to recommend medical cannabis to veterans without fear of retaliation or punishment, and would have also prevented the VA from denying services to any veteran who is a medical marijuana patient.

An additional disappointment in the final budget package was the continuation of language from the previous year which blocks the adult-use sale and purchase of cannabis in Washington, D.C.

It’s important to remember that these appropriations amendments only protect states’ medical cannabis and hemp laws for the upcoming fiscal year and have to be re-included and voted on every year. While this progress is encouraging, it falls short of achieving our goals. NCIA will continue lobbying on behalf of the cannabis industry to achieve the substantive and lasting reforms that our businesses deserve.

CANNABIS MILESTONE: CONGRESS VOTES IN FAVOR OF THE ROHRABACHER-FARR AMENDMENT

by Michelle Rutter, NCIA Government Relations Coordinator

This week was a milestone in the cannabis industry.

On Wednesday, the U.S. House of Representatives debated the Commerce, Justice, and Science (CJS) Appropriations bill (HR 2578), which funds applicable government agencies for the upcoming FY2016. This year, there were four cannabis-related amendments under consideration: the Rohrabacher-Farr medical marijuana amendment, the McClintock-Polis adult-use marijuana amendment, the Bonamici-Massie industrial hemp amendment, and the Perry CBD oil amendment. The results signaled a clear victory for the cannabis industry.

Rohrabacher-Farr

For the second year in a row, Congress voted in favor of the Rohrabacher-Farr medical cannabis amendment. This amendment, introduced by Reps. Dana Rohrabacher (R-CA) and Sam Farr (D-CA), bans the Department of Justice from spending money to prevent the implementation of state-level medical cannabis programs, in addition to removing funding for federal medical cannabis raids, arrests and prosecutions in states where medical cannabis is legal. The vote count increased from 219-189 in 2014, to 242-186 this year, with 67 Republicans voting ‘Yes.’

McClintock-Polis

For the first time ever, the McClintock-Polis amendment was offered on the House floor. This amendment, introduced by Reps. Tom McClintock (R-CA) and Jared Polis (D-CO), is similar to the Rohrabacher-Farr amendment, but would have extended the same protections from the Department of Justice to non-medical retail marijuana businesses and consumers in states where adult-use sales have been legalized. The measure narrowly failed, 206-222, with more than 40 Republicans in support.

Bonamici-Massie

This amendment, officially named the Bonamici-Massie-Blumenauer-Polis amendment, blocks federal tax dollars from being used to prevent states from allowing the use, distribution, possession, or cultivation of industrial hemp. A member of the cannabis family, hemp is a valuable agricultural commodity that can be found in more than 25,000 commercial products including food, paper, beauty products, and more. The measure passed overwhelmingly, 282-146, with 101 Republicans voting in favor.

Perry

Rep. Scott Perry (R-PA) proposed an amendment to the CJS bill that would protect state laws that allow the use of CBD oils, but still leaves most medical marijuana patients and their providers vulnerable to federal arrest and prosecution. The measure was overwhelmingly passed by a margin of 297-130.

Just a few years ago, pro-cannabis amendments passing Congress was something that those involved in the industry could only dream of. Now, we’re just 16 votes shy of limiting the Department of Justice’s interference with any state-sanctioned marijuana business (McClintock-Polis). Though Congress moves at a notoriously glacial pace, these amendments shed light on politicians’ evolving stances on cannabis policy. These votes prove that NCIA, and all of our members, are slowly but surely convincing Congress that the cannabis industry is to be taken seriously.

Cannabis Milestone: Congress votes in favor of the Rohrabacher-Farr amendment

by Michelle Rutter, NCIA Government Relations Coordinator

This week was a milestone in the cannabis industry.

Rohrabacher-Farr

McClintock-Polis

Bonamici-Massie

Perry

Federal officials, financial industry representatives meet to address marijuana banking crisis

The federal Bank Secrecy Act Advisory Group met December 12 for a “frank discussion” among federal regulators, financial industry representatives, and members of law enforcement regarding the banking crisis for state-legal marijuana businesses.According to Jennifer Shasky Calvery, director of the federal Financial Crimes Enforcement Network (FinCEN), FinCEN and other Treasury Department groups have begun conversations with the Department of Justice. The Bank Secrecy Act Advisory Group advises the Director of FinCEN on the operations of the Bank Secrecy Act (BSA) and is the means by which modifications to BSA regulations are considered. Current BSA regulations require banks to file “Suspicious Activity Reports” any time a transaction of $5,000 or more takes place if the financial institution has reason to believe that it may be connected to illegal activity. This requirement is the core policy creating an impediment to marijuana businesses securing and maintaining bank accounts.A September Senate Judiciary Committee hearing reinforced the growing consensus among federal and state officials that the lack of access to banking services is now the most pressing obstacle to ensuring governments can control marijuana sales in the states where it is legal for medical or adult use and federal enforcement priorities can be upheld. Chairman Patrick Leahy (D-VT) was particularly aggressive in his push for a solution to the problem, urging U.S. Deputy Attorney General James Cole to fix the problem before we have a “shoot out somewhere and have innocent people or law enforcement endangered by that.”

Though little is expected to result immediately from this meeting and details remain under wraps, it clearly indicates that a growing group of lawmakers and regulators are aware that excluding a billion-dollar legal market from banking services is untenable.

Aaron Smith, executive director of the National Cannabis Industry Association, addressed the problem in a statement to the media, saying, “Without access to basic banking services, many legitimate cannabis businesses are forced to manage sales, payroll, and even tax bills entirely in cash. That puts their customers, employees, and fellow community members at completely unnecessary risk. Everyone agrees that the situation is untenable; the Treasury Department and the Department of Justice must act and act quickly. The tide of public opinion is turning ever more quickly in support of regulated marijuana markets and, in 2014, at least six states will be implementing new regulations for these markets. It is long past time for the federal government to stop putting citizens in harm’s way by denying legally recognized businesses access to secure banking services.”

Judiciary Committee Hearing Underscores Consensus: New Marijuana Industry Requires Access to Banking

Senators, Deputy Attorney General Cole, and witnesses all call for swift action to resolve banking crisis faced by legal marijuana businesses

Washington, D.C. – Today’s Senate Judiciary Committee hearing reinforced the growing consensus among legal marijuana regulators, law enforcement officials, and cannabis business professionals that allowing access to banking services is now the most pressing obstacle to the success of the regulated marijuana industry realizing its potential to effectively control marijuana sales in the states where it is legal for medical or adult use and ensuring the eight federal enforcement priorities outlined in last month’s Department of Justice memo can be upheld.
Witnesses Deputy U.S. Attorney James Cole, King County Sheriff John Urquhart, and Colorado Governor’s Chief Legal Counsel Jack Finlaw affirmed the concerns of Senators Patrick Leahy (D-VT), Sheldon Whitehouse (D-RI) , and Senator Richard Blumenthal (D-CT) that federal regulators’ actions to block state-legal marijuana business access to simple banking and financial services will inevitably undermine the viability of state-legal marijuana industries. Furthermore, Cole acknowledged that in states where marijuana has been decriminalized or made legal, implementing a strictly regulated system in which marijuana is sold is the only way to prevent criminal activity such as diversion to youth and across state lines and empowerment of criminals and cartels.
“We need to address the [banking situation] and we are working on it,” stated Deputy Attorney General James Cole who indicated the Department of Justice is conferring with the Department of Treasury’s Financial Crimes Enforcement Division to resolve the issue.
Statement from Aaron Smith, NCIA Executive Director:
“The Department of Justice is finally taking seriously the dangers that a lack of access to simple banking services poses to consumers, employees and business owners. We are encouraged that the growing consensus among essentially all stakeholders is that banking access must be available to legal businesses. It portends a quick reform to this dangerous and unnecessary situation.”

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The National Cannabis Industry Association (NCIA) is the only national trade association working to advance the interests of cannabis-related businesses in the US. NCIA promotes the growth of a responsible and legitimate cannabis industry and works for a favorable social, economic and legal environment for that industry in the United States.

National Cannabis Industry Association Statement on DOJ Response to CO, WA Marijuana Laws

The National Cannabis Industry Association welcomes apparent shift in Department of Justice intent regarding marijuana enforcement

Washington, DC – In a memo issued to U.S. Attorneys today, Deputy Attorney General James Cole reinforced guidance indicating that the Department of Justice will not interfere with implementation of adult-use marijuana laws in Colorado and Washington.

Statement from Aaron Smith, Executive Director of the National Cannabis Industry Association:

“We are encouraged by today’s response from the Obama administration. At the heart of the guidance is a willingness to respect the voters who have decided a regulated marijuana market is preferable to a criminal market in their states. Cannabis-related businesses in these states are creating thousands of jobs and generating tens of millions of dollars in tax revenue. These are clear public benefits.

Now is not the time to push marijuana sales back under ground. The new voter-approved, regulated systems in Colorado and Washington should be allowed to proceed. We have full confidence the businesses in these states will comply with any requirements put forth by the Department of Justice. That is what they do. They comply with rules and provide a service to their customers and their communities. We are pleased to see the Obama administration will not cause harm to citizens and states by shutting these businesses down, and hope this will lead to an expansion of sensible policies related to marijuana such as allowing these businesses access to banking and taxing them at a fair rate.”

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