Historic cannabis banking vote – Politico

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The marijuana banking act comes to a vote on the floor of the House today — vote is expected around 2:30 pm Eastern.

Senate Majority Leader Mitch McConnell championed hemp legalization as a boon to Kentucky farmers. He may not have foreseen it would let those facing pot charges off the hook.

There are likely “hundreds” more vaping-related illnesses across the country, the CDC says, prompting states to take increasingly aggressive action to keep people from using e-cigarettes or THC vapes.

IT’S WEDNESDAY, SEPTEMBER 25. WELCOME TO POLITICO’S DAILY CANNABIS NEWSLETTER. If you’re ever feeling overwhelmed by Capitol Hill acronyms, you’re not alone. A marijuana trade organization issued a cheeky letter this morning, aimed at a group of state Attorney Generals who earlier this week called for the passage of the STATES Act, which they claim would help with marijuana banking. Well, says the trade org, it is actually the SAFE Act that focuses most strongly on banking, not STATES. And speaking of banking, today is *the day.* Be sure to keep sending us cannabis news, tips or cat gifs — to nfertig@politico.com or on twitter at @natsfert. And follow us on Twitter: @POLITICOPro. Read about our mission in our inaugural issue.

TODAY IS THE DAY — The House is slated to vote this afternoon on legislation designed to allow banks to work with businesses in the marijuana industry. No standalone marijuana bill has ever reached a vote on the House floor. It’s expected to clear the house by a wide margin, especially after the addition of provisions for hemp and Operation Choke Point — but watch for how many Republicans vote for the bill; some advocates believe a large number of GOP votes could help pressure the Republican-led Senate.

And speaking of the Senate: Natalie has been all over Capitol Hill, assessing the lay of the land as this bill inches closer to the other chamber of Congress.

“I think you can be against marijuana and still understand that if it’s going to be a legalized product, we need to be able to control it through our banking system,” Sen. Marco Rubio (R-Fla.) told Natalie.

And Sen. Elizabeth Warren (D-Mass.), whose fellow presidential candidates — Sens. Cory Booker (D-N.J.), Kamala Harris (D-Calif.) and Bernie Sanders (I-Vt.) — tweeted in favor of more comprehensive marijuana reform over standalone banking legislation last week, told Natalie on Tuesday she hopes both can happen.

“I’d like to get as much as we can,” Warren — who cosponsors both the marijuana banking bill and more comprehensive reform bill pegged to go next in the House — told Natalie. “But Mitch McConnell is in charge of the Senate right now. So I want to see us do something that is helpful.”

She added that she’s reserving judgment on banking until she sees what the Senate version of the bill ultimately looks like.

NADLER THROWS SUPPORT BEHIND SAFE — House Judiciary Chairman Rep. Jerry Nadler tweeted just after 7 p.m. last night that the House is expected to consider the SAFE Banking Act on the floor „and I will vote for it.” Nadler is the primary sponsor of the MORE Act, a comprehensive marijuana legalization and criminal justice reform bill that was pitted against the banking bill by some in the last two weeks.

OP-ED: BANKING BILL IS IMPORTANT STEP TOWARD OPENING UP CANNABIS INDUSTRY TO MINORITIES — The cannabis banking bill is about more than access to financial services for a rapidly growing industry, argue the Brookings Institution’s Makada Henry-Nickie, John Hudak and Aaron Klein. It’s also about beginning to ameliorate damage from the “war on drugs.”

“Women and racial minorities face well-documented barriers in accessing investment dollars, in part because the ability to fund one’s own business depends largely on preexisting wealth,” they write in an opinion piece for POLITICO’s The Agenda. “Increasing access to traditional financial products increases opportunity for potential minority and women cannabis entrepreneurs to enter the space.”

HOW MCCONNELL MADE POT BUSTS HARDER — McConnell was instrumental in getting hemp legalization passed in the 2018 farm bill. Now, local prosecutors across the country are stepping back from marijuana enforcement. Mona spoke to local prosecutors from Texas to South Carolina about how their offices are handling new hemp laws when police can’t tell the difference between hemp and marijuana. The two are often indistinguishable by sight, though hemp has less than 0.3 percent THC, a trace amount of the intoxicating compound in marijuana. State crime labs are investing hundreds of thousands of dollars on testing equipment that can determine THC levels.

Would McConnell have pushed for hemp legalization if he were aware of the drug enforcement implications? The senator didn’t comment for the story, but advocates doubt it. McConnell has consistently opposed efforts to liberalize marijuana laws and took great pains to distinguish hemp from marijuana in his farm bill push.

Many prosecutors have been moving away from punitive drug enforcement before hemp legalization laws anyway. In states where marijuana is still illegal, local prosecutors are winning elections by campaigning on reformer platforms that include stepping back pursuing marijuana cases.

“On only rare occasions would someone actually get jail time for marijuana misdemeanor possession,” said Columbus City Attorney Zach Klein, who does not want to prioritize such cases in light of the “historical wrongs of marijuana convictions” on communities of color.

CDC: ‘HUNDREDS’ MORE VAPING-RELATED ILLNESSES — There are likely „hundreds” more cases of vape-related illness since the CDC reported 530 cases across the country last week, CDC Principal Deputy Director Anne Schuchat told lawmakers on Tuesday. Schuchat said she also expects the number of deaths to rise from the nine already confirmed as federal and state agencies continue investigating. The CDC is expected to release updated official numbers on Thursday, POLITICO’s Brianna Ehley reports.

CDC officials said the majority of these cases have involved THC or a combination of THC and nicotine. The FDA and DEA have been investigating the supply chain, and officials are warning people to avoid buying products on the black market or modifying them in any way.

What’s next? The House Energy and Commerce oversight committee has a hearing today on the outbreak of vaping-related illnesses.

States are taking an increasingly aggressive approach to curtail vaping: The escalating public health crisis prompted state regulators across the country to discourage individuals from continuing to use vaping products. Massachusetts Gov. Charlie Baker took the most dramatic step, ordering a four-month ban on the sale of all vaping products, whether e-cigarettes or THC vapes.

“We need to pause sales in order for medical experts to collect more information about what is driving these life threatening vaping related illnesses,” Baker said at a press conference Tuesday. “E-cigarette usage is exploding, and it is clear there is a very real danger to the population.”

The ban on vape sales prompted a swift backlash from some legalization advocates.

“This is a terrible decision,” wrote Shaleen Title, who holds the social justice seat on Massachusetts’ Cannabis Control Commission, on Twitter. “Purposely pushing people into the illicit market — precisely where the dangerous products are — goes against every principle of public health and harm reduction.”

What are other states doing? Other states — most notably California — issued increasingly urgent pleas for residents to stop using the products. In addition, New York Gov. Andrew Cuomo called for a partnership with neighboring states New Jersey and Connecticut to coordinate rules on both vaping products and marijuana legalization. All three states spent months debating proposals to fully legalize marijuana this year, but failed to pass legislation.

What’s the response on the Hill? A bipartisan group of senators introduced legislation that would establish federal safety standards for e-cigarettes and other vaping devices. The bill would require the FDA to set standards that prevent consumers from modifying or adding any substances to electronic delivery systems in a way that is not intended by the manufacturer.

BUT WAIT, IT’S ALL CONNECTED — Anti-legalization group Project SAM is using the vaping crisis to fight the passage of cannabis banking. The group’s New Hampshire chapter called for a hold on the cannabis banking bill until the vaping situation is sorted out. „Banking access for the marijuana industry will put pedal to the metal on Big Marijuana,” said Abu Edwards, SAM Action’s director of state affairs.

CANNABIS DELIVERY SERVICE LAUNCHES EQUITY PROGRAM — California cannabis delivery platform Eaze launched a social equity program on Tuesday, POLITICO California’s Alexander Nieves reports. Local government efforts to help those impacted by drug enforcement into the booming cannabis industry have been slow to get off the ground. Eaze will provide $50,000 grants and 10 weeks of training to 10 participants in its program, which will include minorities, women, LGBTQ people, and more.

An industry’s burden? Oakland pioneered the idea of cannabis equity programs after the city government instituted a system of awarding half of all available marijuana licenses to those who have been disproportionately harmed by marijuana enforcement. Since then, other cities and states including Massachusetts and Illinois have followed with programs of their own. While well-intentioned, these programs haven’t delivered. Facing funding challenges and bureaucratic red tape, very few “equity applicants” have managed to get their businesses off the ground. Some advocates argue the industry needs to support such efforts — several marijuana companies in California have announced similar programs in the last month. Others argue the government should bear the burden, not the private sector.

NEW MEXICO TO APPEAL RULING ON MEDICAL MARIJUANA — A New Mexico judge has once again directed the state health department to license patients from out of state in its medical marijuana program in a ruling earlier this week. Three people — two from Texas and one from Arizona — wanted to make use of the state’s medical marijuana program under changes to the law that went into effect in June, but the state opposed their efforts.

“There is no support in law for continued disregard of the judge’s clear and unambiguous order,” said a statement from Duke Rodriguez, one of the petitioners and CEO of New Mexico medical marijuana company Ultra Health.

But the state’s Health Department plans to appeal and might hold off on enrolling non-residents into the program, the Albuquerque Journal reported.

Why does this matter? State medical marijuana programs are increasingly opening up to out-of-state patients, which can boost their patient numbers and increase demand for medical marijuana companies. However, some are worried about the potential consequences — one marijuana advocate in Texas expressed fear that allowing Texans into New Mexico’s medical marijuana program would lead to confusion and an increase in arrests for patients bringing the drug back to their home state.

NJ TRADE TURMOIL — NJ Advance Media — which owns The Star-Ledger — reports that a New Jersey cannabis trade group has hired an outside consultant “to investigate allegations of potential ethical ‘concerns’ raised within its own ranks.” The New Jersey Cannabis Industry Association is being investigated for “insider dealings, inappropriate disclosures and possible sexual indiscretions.” NJ Advance Media also has ended their events partnership with NJCIA, following this news.

A CHAT WITH REP. BARBARA LEE — Natalie recently caught up with Rep. Barbara Lee (D-Calif.), a co-chair of the Congressional Cannabis Caucus, to chat about cannabis legislation. Here is an excerpt of that conversation, edited for clarity.

Why did you decide to become involved as a co-chair of the Cannabis Caucus?

I think it’s very important that the Cannabis Caucus reflect the entire country, in terms of racial equity and diversity. And the Cannabis Caucus has never had a woman nor an African-American, or a person of color co-chair of the caucus. It’s extremely important because, in a bipartisan way, we have to work together to try to address all of the issues around cannabis policy — including banking, access to capital, but also all of the issues around the failed war on drugs, and what it has done to black and brown communities.

… Up until now the focus has not been — or the support hasn’t been — for [criminal justice reform and equity bills]. But now, as co-chair of the Cannabis Caucus, I have a way to work with other members to make the argument as to why we need to address this as a criminal justice reform matter.

How does banking specifically relate to the issues of criminal justice reform and social equity?

That’s extremely important, because we want to make sure that we have people who’ve been affected by the terrible war on drugs first in line to be able to apply for licenses and develop their own businesses. But they can’t do that unless they have the capital and the access to banking services. When you look at the industry, only one percent of those licenses have been granted to people of color. We want to create economic growth and economic opportunity and jobs through the industry. And you have to have legitimate banking services so the industry can move forward for everyone.

If the SAFE Banking Act passes, do you think that takes the wind out of the sails of future marijuana legislation?

No way. No way. This is so complex, and so there are so many levels and layers to this, and so we gotta do it all. And so I think that’s a great first step.

ARTHRITIS FOUNDATION GETS IN THE CBD GAME — After pushing the FDA to issue regulations in July, the nation’s largest arthritis patient advocacy organization has created its own CBD use guidelines for adults with arthritis.

— They also conducted a national survey in July. Of the 2,600 patients who responded to their survey, 76 percent of those said they are currently using CBD.

URUGUAY EXPORTS MARIJUANA — The South American nation has sent 10 kilograms of marijuana to Australia, the first export of its kind in the country. Uruguay became the first country in the world to legalize adult-use marijuana in 2013. Its government hopes to cash in on exports.

AUSTRALIA PLAGUED BY RED TAPE — The country may be getting a fresh new batch of medical marijuana from Uruguay, but its cannabis program is struggling. A government-commissioned report found that regulators did not have enough resources to handle license applications, contributing to delays and a lack of access for patients.

A debate about banning medical marijuana companies in favor of smaller operators “prompted practically unheard-of animosity” in Cambridge, Mass. The city council voted to bar existing medical cannabis companies from the recreational market in an effort to help economic empowerment companies, which benefit those harmed by drug enforcement.

An Army veteran is serving a life sentence for selling $30 worth of marijuana thanks to Louisiana’s habitual offender law. He’s hoping for relief from the state Supreme Court.

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