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.
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.”
