Midsummer Movement: The Pre-August Recess Rush in D.C.

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

As Congress gets ready to beat the D.C. heat and leave Washington for their annual August recess, there’s at least one thing on their minds: cannabis.

Last week, Senate Majority Leader Chuck Schumer (D-NY) along with Finance Committee Chair Ron Wyden (D-OR), and Sen. Cory Booker (D-NJ) introduced their much anticipated Cannabis Administration and Opportunity Act (CAOA), which is now the Senate’s only pending legislation that would provide comprehensive cannabis policy reforms across the nation.

The landmark bill would remove cannabis from the federal Controlled Substances Act and move regulatory responsibility from the Drug Enforcement Administration (DEA) to the Alcohol and Tobacco Tax and Trade Bureau (TTB), the Food and Drug Administration (FDA), and other agencies to protect public health and safety. The bill would also institute a federal excise tax of 5-25% on cannabis on top of the already-hefty state taxes imposed on the industry, concerning advocates for small cannabis businesses and equity operators.

The long-awaited CAOA was introduced after sponsors circulated a discussion draft last year. NCIA and other advocacy organizations provided comprehensive feedback to the bill’s authors last year. Notable changes to the legislation include:

Increases the permissible THC by dry weight from the current 0.3 percent to 0.7 percent and refines the definition of “hemp,” and consequently “cannabis” by taking into account the total THC in a cannabis product, rather than just delta-9 THC.
Changes to the weight quantity to qualify a person for felony cannabis distribution or possession charge under the section from 10 pounds to 20 pounds.
Provides that a court shall automatically, after a sentencing review, expunge each federal cannabis conviction, vacate any remaining sentence, and resentence the defendant as if this law had been in place prior to the original sentencing.
Enables a noncitizen who has received a deportation order based on a cannabis-related offense to file a motion to reconsider that decision. If the motion to reconsider is filed within 30 days of the removal order, the motion may allow for the cancellation of the deportation order.
Establishes a new 10-year intermediary lending pilot program in which SBA would make direct loans to eligible intermediaries that in turn make small business loans to startups, businesses owned by individuals adversely impacted by the war on drugs, and socially and economically disadvantaged small businesses.
Removes the requirement to maintain a bond for any cannabis business that had less than $100,000 in excise tax liability in the prior year and reasonably expects excise tax liability in the current year to be below such amount.
Incorporates rules similar to rules currently applicable to permitted malt beverage producers and wholesalers.

While the historic nature of the CAOA cannot be understated, the bill has a multitude of challenges ahead of it. Not all Senate Democrats support the legislation, making the 60-vote filibuster threshold nearly impossible. Plus, with only a couple dozen legislative days between now and the end of the session, time is also working against advocates.

Dovetailing with the introduction of the CAOA, the Senate Judiciary Committee’s Subcommittee on Criminal Justice and Counterterrorism will hold a hearing titled “Decriminalizing Cannabis at the Federal Level: Necessary Steps to Address Past Harms” this Tuesday. While the witness list has not been made public as of publication, expect the hearing to focus on the newly introduced legislation and how it would affect communities most impacted by the war on drugs.

In other news, the House and Senate will vote on a revised research bill, the Cannabidiol and Marihuana Research Expansion Act, this week. The bill is expected to pass both chambers and be sent to President Biden’s desk for his signature. The Senate bill is sponsored by Sens. Dianne Feinstein (D-CA), Chuck Grassley (R-IA), and Brian Schatz (D-HI) and passed by unanimous consent in March. The House bill is sponsored by Reps. Earl Blumenauer (D-OR) and Andy Harris (R-MD), and passed 343-75 in April. One of the notable areas of compromise? The House bill would have allowed researchers to do their studies on cannabis that’s actually being sold to consumers in dispensaries. That was removed during negotiations, meaning that researchers will still have to obtain their cannabis from the University of Mississippi’s cultivation facility.

There’s still time before recess begins, so make sure you stay tuned to NCIA’s podcast, social media, and newsletter to stay up-to-date on all the latest from Washington, D.C.! Interested in making more of an impact? Don’t forget to register for our upcoming 10th Annual Cannabis Industry Lobby Days on September 13-14, 2022!

Making History In Congress, Thanks To NCIA Members!

by Aaron Smith, NCIA’s CEO and Co-founder

History was made today as Senate Majority Leader Chuck Schumer (D-NY) along with Senators Ron Wyden (D-OR) and Cory Booker (D-NJ) introduced the Cannabis Administration and Opportunity Act which would finally remove cannabis from the federal Controlled Substances Act and begin the process of federal regulation.

For the last year, NCIA has been working behind the scenes to ensure this landmark legislation not only ends prohibition but also creates an environment where small and medium-sized businesses can thrive under national legalization. These businesses – who we now call “Main Street Cannabis” – are the heart of our industry and we’re proud to have been giving them a seat at the table in our nation’s halls of power for over 12 years.

We will continue working with our allies in the Senate to advance this bill and advocate for some necessary amendments to better ensure that small, equity, and women-owned businesses (in particular) are well-positioned to thrive after the end of federal prohibition.

We would not be where we are today if not for your support which has allowed us to effectively represent the interests of small businesses like yours in the halls of Congress and in the court of national public opinion.

I hope you’ll join us in making national legalization a reality by making your voice heard at our upcoming 10th Annual Cannabis Industry Lobby Days in Washington, D.C. September 13 & 14!

Thanks to your membership, NCIA’s government relations staff represents Main Street Cannabis in D.C. every day but Lobby Days is your chance to show up and tell your unique story to our nation’s lawmakers, firsthand.

Lobby Days is also the best opportunity to connect with your fellow industry leaders who are truly invested in the future of cannabis and sensible national policy. Please register today so you don’t miss out on making history with us! Reach out to my colleague Madeline Grant to learn more about how you can be as impactful as possible at this year’s Lobby Days.

Thanks, as always, to all NCIA members for their support of the cannabis industry. If your company is not yet a member of NCIA, now’s the time to join and have your voice heard in the halls of Congress.

Watch this video update with Aaron Smith and Michelle Rutter Friberg:

Video: NCIA Today – July 23, 2021

Video: NCIA Today – July 16, 2021

NCIA Deputy Director of Communications Bethany Moore checks in with what’s going on across the country with the National Cannabis Industry Association’s membership, board, allies, and staff. This week Bethany is joined by NCIA’s GR team in Washington D.C. to discuss the Cannabis Administration and Opportunity Act discussion draft introduced by Senate Majority Leader Chuck Schumer. Join us every Friday on Facebook for NCIA Today Live. Registration to our Midwest Cannabis Business Conference in Detroit is now open with special limited-time super early bird pricing on tickets available, head to www.MidwestCannabisBusinessConference.com today.

Senate Opens Doors to Federal Legalization

At long last, the day we’ve been waiting for all year has finally come! Early Wednesday morning, Senate Majority Leader Chuck Schumer (D-NY) and Sens. Cory Booker (D-NJ) and Ron Wyden (D-OR) released the discussion draft language for a comprehensive bill that would effectively make cannabis legal at the federal level while allowing states to continue to determine their own cannabis policies and work to repair the harms caused by prohibition.

While it has yet to be formally introduced in the Senate (stay tuned!), this draft legislation is designed to jumpstart bipartisan negotiations that have been building momentum in Congress since the first states chose to regulate cannabis for adults, and which came to the forefront in the wake of last year’s renewed focus on criminal justice reform and the House passage of the MORE Act at the end of the last congressional session.

You can find a summary of the language here and the full draft here.

NCIA will be carefully reviewing the details of this proposed legislation in the coming days and will be actively eliciting feedback from our members, allies, and especially our Evergreen members, Policy Council, and committees to determine what – if any – changes need to be made before the bill is introduced. Our dedicated in-house government relations team will also be working closely with lawmakers to find an effective path forward for comprehensive cannabis policy reform that helps to undo the disastrous impacts of our current federal laws in the immediate future.

Senate leadership will be taking comments and suggestions until September 1. If you would like to add your input, please contact Deputy Director of Government Relations Michelle Rutter Friberg at Michelle@TheCannabisIndustry.org.

From The Hill: The Emergency Cannabis Small Business Health and Safety Act

by Morgan Fox, NCIA’s Director of Media Relations

Legislation to give legal marijuana businesses, which have been declared essential in a majority of states with regulated cannabis markets, access to resources being made available by congressional COVID-19 emergency response packages was introduced in the House of Representatives last week by Rep. Earl Blumenauer (D-OR) and Rep. Ed Perlmutter (D-CO).

The Emergency Cannabis Small Business Health and Safety Act would stop cannabis businesses and those that provide services to them from being excluded from further federal relief funding provided through the Small Business Administration (SBA).

Specifically, this bill would impact the following programs: Paycheck Protection Program (PPP), Economic Injury Disaster Loans (EIDL), and EIDL emergency grants. It would also protect SBA employees from prosecution for administering relief funds to cannabis businesses.

The full text of the bill is available here.

Under current policy, businesses that deal directly with cannabis production and sale, as well as many that provide services to them, are ineligible for most SBA programs. And the definition that the SBA uses to define which ancillary businesses are eligible is very vague. You can find a useful primer on federal relief eligibility from our friends at Vicente Sederberg LLP.

Let’s be clear: the fact that many cannabis businesses have been permitted to remain operating during this difficult time will not be enough to sustain the industry or allow for an effective and timely recovery once this nightmare is behind us. Lack of access to federal funds is just one of the many stressors facing cannabis businesses, which is why it is vital that we become eligible for relief as soon as possible.

Many indirect businesses have not been declared essential and have been forced to close. Cannabis businesses that have remained open must contend with declining sales, supply chain disruptions, onerous tax rates, lack of access to banking services, and the costs incurred by implementing additional health and safety measures to protect employees and customers.

Thankfully, the chorus of voices calling for fair access has been steadily growing. Earlier in April, Rep. Blumenauer and nearly three dozen of his colleagues sent a letter to House leadership urging them to make cannabis businesses eligible for SBA programs. Senators Jacky Rosen (D-NV) and Ron Wyden (D-OR) along with eight co-signers sent a similar letter to Senate leadership last week. They have been joined by cannabis industry advocates, the Marijuana Justice Coalition, the United Food and Commercial Workers International Union, state officials including Colorado Gov. Jared Polis, and others.

NCIA and our allies will continue to put pressure on Congress to treat cannabis businesses fairly during this crisis, but we need your help.

Please email and then call your congressional representatives today and ask them to support the legal (and essential) cannabis industry during this critical time. Talking points and instructions for calling your representatives are available on our website.

Email My Representative

Call My Representative

Here is a sample script you can use:

“Hi, I am calling/writing today to ask that you co-sponsor Congressmen Blumenauer and Perlmutter’s recently introduced Emergency Cannabis Small Business Health and Safety Act. This important piece of legislation would stop cannabis businesses and those that provide services to them from being excluded from further federal relief funding provided through the Small Business Administration. This current lack of access will undoubtedly lead to unnecessary layoffs, reduced hours, pay cuts, and furloughs for the workers of cannabis businesses who need support the most. As your constituent, I ask and urge that you sign on as a co-sponsor for this Act as soon as possible. Our industry, our businesses, and our employees cannot wait.”

The situation on Capitol Hill is extremely fluid as you might imagine. This bill could move forward as standalone legislation or could be incorporated into the next round of federal relief funds, which is being called CARES 2. Stay tuned for updates and be on the lookout for additional ways you can help us protect our essential industry.

America’s Own Homegrown Industry

Co-authored by NCIA and BDS Analytics

It all begins with the humble plant.

The fastest-growing industry in the United States relies 100 percent upon the simple cultivation and harvesting of one plant, cannabis sativa — its buds, its leaves, and the diversity of organic compounds the plant provides, including THC.

If the plant is grown indoors, as is most legal cannabis in the United States, it first needs a building before it ever digs roots and spreads a canopy. The building requires complicated lights, many of which are manufactured in the United States. It demands a wilderness of HVAC networks, to maintain a healthy temperature and humidity level. Irrigation systems, potting soil and soil amendments, complex sprinkler systems in case of fire, high-tech security systems — all of these and much more must be in place before the first plant begins to rise towards the light.

And these first steps produce jobs and work: real estate professionals, lawyers, accountants, bookkeepers, electricians, carpenters, plumbers, HVAC specialists, irrigation experts, sprinkler and alarm installation technicians, factory workers. Once the building is ready, the company needs horticulture experts and trimmers, among others. And it requires ongoing work, too, from electricians and other trades specialists, as things break and need to be replaced or updated. The cultivation of the plant alone is a rapidly-developing career field.

But hands-on growing represents just one small patch of the cannabis landscape. Every step along the way, from seed to store, propagates work for people in hardhats, lab coats and blazers. And all of the jobs are Made in the USA. Even more, due to the patchwork regulatory environment, cannabis industry jobs also tend to root, and stay put, within individual states and communities.

Legal cannabis today in the United States is the ultimate homegrown industry. Detailed sales data from industry market research firm BDS Analytics reveals astounding growth within states where cannabis is legal. For example, during the first quarter of 2018 in Colorado, where sales of recreational cannabis have been legal since 2014, dollar sales of concentrates in recreational shops grew by 47.4 percent compared to the first quarter of 2017. Concentrates do not represent a tiny piece of the overall recreational marketplace: During this year’s first quarter, adult use concentrates sales hit $85.35 million, and captured a full 30 percent of the recreational marketplace. That’s an enormous chunk of the state’s mature adult use cannabis market, and yet sales still expand by close to 50% within a year.

And with all of that growth, quarter after quarter, comes increased need for workers.

States with laws that replace criminal marijuana markets with regulated industries are also benefiting from significant tax revenues that support important programs like school construction, law enforcement, and drug education. According to the National Cannabis Industry Association’s , the five states that allowed adult-use sales realized nearly $800 million in combined state tax revenue alone.

Industry investment and market research firms The Arcview Group and BDS Analytics predicted in their study US Legal Cannabis: Driving $40 Billion Economic Output that the industry will hatch 414,000 jobs in a multitude of fields both directly and ancillary related to cannabis by 2021 — everything from delivery drivers to retail sales pros to extraction technicians, warehouse workers, bakers, marketing gurus, and PhDs in pest control.

The industry’s impact is certainly felt in Colorado, which began retail cannabis sales for adult use on Jan. 1, 2014 — the first in the nation to do so. Many economic experts attribute the state’s lowest-in-the-nation unemployment rate, at least in part, to the cannabis boom.

Colorado’s ascending sales results, as well as those in the other cannabis-legal states, would likely resound with even more oomph if two difficult issues could be resolved: banking, and the ability to write off business expenses for cannabis companies.

As the industry’s leading national advocate, NCIA is working hard on both fronts.

The Small Business Tax Equity Act of 2017, co-sponsored by Rep. Carlos Curbelo (R-FL) and Sen. Ron Wyden (D-OR), seeks to let cannabis companies operating legally under state law to implement business-related tax credits or deductions for expenses — the entire issue is often referred to simply as 280E (the applicable section of the tax code) as shorthand. For now, the federal government treats marijuana sales in legal states the same way it treats sales of illegally-trafficked drugs — needless to say, people illegally selling controlled substances cannot itemize tax deductions or claim business-related tax credits but NCIA believes that state-licensed businesses should not be caught up in the wide net cast by 280E.

Meanwhile, the Secure and Fair Enforcement (SAFE) Banking Act seeks to provide a “safe harbor” and additional protections for depository institutions that want to engage with cannabis companies that are in compliance with state law. Rep. Ed Perlmutter (D-CO) and Sen. Jeff Merkley (D-OR) are co-sponsors of this important legislation, which finally would, among other things, provide cannabis companies access to bank loans — taken for granted in most industries, but long outlawed in legal cannabis.

The success of the industry truly astounds despite such profound roadblocks. Success in alleviating such banking and taxation headaches would further stoke what is already the hottest industry in the country.

Research into the economic benefits of cannabis legalization and regulation is just beginning, and for now it remains too early to make definitive declarations about how legalization will influence the economic path of different communities. Undoubtedly the effects will vary from location to location — the effect on San Francisco, for example, may be entirely different from the effect on Fort Collins, Colorado.

One early study, conducted by the University of Colorado-Pueblo’s Institute of Cannabis Research, found that legalization in Pueblo, a diverse, blue-collar area about two hours south of Denver, could be responsible for the County’s recent success. In addition, the study rejected predictions that legalization would bring increased homelessness and crime to the region.

“When compared to similar communities in states where cannabis is not legal in any form, Pueblo appears to be doing better on a variety of measures,” the study says. “Overall, the positive changes that are noticed in Pueblo County, such as increasing real estate values, higher income per capita, and more construction spending may be attributed to legalization of cannabis in the state of Colorado.”

To date, cannabis still represents a fairly small slice of the employment pie in Colorado. A recent study conducted by the Federal Reserve Bank of Kansas City estimated the industry directly supports 17,821 jobs today. The study’s author writes: “Employment in the marijuana industry is a relatively small share of total employment in Colorado, but in recent years it has been one of the state’s fastest-growing industries,” adding that between 2016 and 2017 jobs in cannabis rose by 17.7 percent.

The study also noted the effect Colorado’s cannabis industry has had on state government coffers; in 2017 alone, it added $247 million to the budget. Cannabis tax receipts go to a variety of places. The state’s Building Excellent Schools Today school construction program, for example, receives the first $40 million from excise taxes on wholesale cannabis, and Colorado Gov. John Hickenlooper recently signed a bill that will drastically increase this amount. Local governments receive another 10 percent of the taxation haul.

Nationwide, the cannabis industry now supports close to 10,000 active cannabis licenses — that is, businesses that need licenses to grow, manufacture, distribute or sell the plant, according to CannaBiz Media, which tracks marijuana licenses. These “touch-the-plant” businesses are the sturdy and rapidly expanding trunk of a flourishing industry — without them, none of the other jobs and businesses that are sprouting up around cannabis sales today would exist.

But if touch-the-plant businesses are the trunks of the industry, the branches, leaves and flowers are the ancillary jobs — those that don’t grow, manufacture or sell marijuana directly. Of those anticipated 414,000 cannabis jobs by 2021, many will not sprout directly from licensed businesses. For example, software developers targeting the cannabis industry are flourishing. Entrepreneurs across the country are opening factories that make everything from plastic containers and child-safe bags for cannabis, to customized extraction equipment. New legal, public relations, marketing, and other professional services appear every day that revolve around the industry.

During a recent economic conference, Ian Siegel, the CEO of ZipRecruiter, which is a prominent job recruitment marketplace, said of cannabis: “Twenty-nine states have legalized marijuana [in some form]. There’s a 445 percent job growth in job listings in the category year-over-year.” By comparison, Siegel said other hard-charging industries like technology and healthcare lag far behind, with job growth at 245 percent and 70 percent respectively. He also noted that cannabis jobs expansion grew at a more rapid pace during Q4 2017, which saw an increase of 693 percent compared to the previous year.

As growth rockets ahead (new jobs, workers with new skills, growing tax revenues, etc.), the same trajectory is beginning to rise in Canada, where adult-use cannabis use is expected to begin later this summer. Despite Canada’s relatively small size — with a population of 35 million, it is smaller than California and dwarfed by the United States population of nearly 326 million — it enjoys a distinct advantage on the global stage: Canada allows cannabis exports. Growers and manufacturers in Canada ship cannabis to Germany, Israel and other countries that seek cannabis for their medical programs (only one other country in the world, Uruguay, enjoys legal adult-use cannabis use and sales). This is a fairly small market, for now. But as more and more countries embrace the medical, if not adult-use, benefits of cannabis, it is a marketplace destined to expand and grow increasingly dynamic. Permitting cannabis exports remains another NCIA priority.

Either way, the cannabis revolution is here, across the United States — where it all began. It is the ultimate homegrown industry, one we all should embrace, nurture and strengthen. It’s good for America, and good for America’s cities, towns and citizens.

This post was co-authored by the National Cannabis Industry Association, the largest cannabis trade association in the U.S. and the only one representing cannabis businesses at the national level and BDS Analytics, the leader in providing comprehensive cannabis market intelligence and consumer research. Learn more about NCIA by visiting: thecannabisindustry.org. Learn more about BDS Analytics by visiting: bdsanalytics.com.