Marijuana Law, Policy & Reform

Editor: Douglas A. Berman
Moritz College of Law

Tuesday, April 9, 2019

"The Good, the Bad, and the Ugly: Why IRC § 280E is not the Industry Killer it is Portrayed to be"

The title of this post is the title of a presentation to be made by one of my students in my Marijuana Law, Policy & Reform seminar this coming week.  Here is part of his explanation of his topic and links to some background reading:

State legalization of marijuana, and the rising prevalence of marijuana businesses, has continually thrust Internal Revenue Code (IRC) § 280E into the spotlight.  Many scholars have argued for the provision’s abolishment, but the IRS’s staunch stance remains unyielding.  The literature seems to suggest a tacit assumption that IRC § 280E will remain a hurdle if/until marijuana is removed from Schedule I.  Although IRC § 280E is a hurdle, other mechanisms are shifting to allow marijuana businesses to be successful despite this tax provision. 

For example, in many cases, the Tax Cuts and Jobs Act of 2017 did more for marijuana businesses than a repeal of IRC § 280E would have.  Yes, marijuana businesses are still worse off than other businesses from a tax perspective, but marijuana’s competition is not necessarily other sectors, it is the black market.  There is something to be said for the fact that the marijuana industry continues to grow, despite claims of IRC § 280E making growth “impossible.”  However, the primary focus of this paper is not to explain why IRC § 280E predictions were incorrect, it is to look forward at why and how the industry can continue to succeed regardless of IRC § 280E.

Background Reading

April 2015 white paper by the National Cannabis Industry Association, "Internal Revenue Code 280E: Creating An Impossible Situation For Legitimate Businesses": Download 2015-280E-White-Paper

Fortune article, "The Marijuana Industry’s Battle Against the IRS"

2015 IRS Memo on IRC § 280E

Cannabis Business Times article, "Tax Court Reinforces IRS Code 280E in Harborside Ruling"

Memo from Rosenberg Martin Greenberg law firm, "Are Owners of Cannabusinesses Eligible for the Qualified Business Income Deduction Under Section 199A?"

April 9, 2019 in Business laws and regulatory issues, Federal Marijuana Laws, Policies and Practices, Taxation information and issues | Permalink | Comments (1)

Friday, April 5, 2019

Will the new, reintroduced version of the STATES Act be able to get even a hearing in Congress?

Supportstates-copy-300x300The question in the title of this post was my reaction of this news out of Congress as reported here by Marijuana Moment:

Reps. Earl Blumenauer (D-OR) and David Joyce (R-OH) filed the Strengthening the Tenth Amendment Through Entrusting States (STATES) Act, appearing alongside cosponsors Reps. Barbara Lee (D-CA) and Joe Neguse (D-CO) at a press conference. Sen. Cory Gardner (R-CO) and Elizabeth Warren (D-MA) filed the Senate version of the bill.... The legislation would amend the Controlled Substances Act to protect people complying with state legal cannabis laws from federal intervention, and the sponsors are hoping that the bipartisan and bicameral nature of the bill will advance it through the 116th Congress.

“I’ve been working on this for four decades. I could not be more excited,” Blumenauer told Marijuana Moment in a phone interview. While other legislation under consideration such as bills to secure banking access for cannabis businesses or study the benefits of marijuana for veterans are “incremental steps that are going to make a huge difference,” the STATES Act is “a landmark,” he said....

The congressman said it will take some time before the bill gets a full House vote, however. Rep. Jim McGovern (D-MA) recently suggested that the legislation would advance within “weeks,” but Blumenauer said it will “be a battle to get floor time” and he stressed the importance of ensuring that legislators get the chance to voice their concerns and get the answers they need before putting it before the full chamber. “We want to raise the comfort level that people have. We want to do it right,” he said. “There’s no reason that we have to make people feel like they’re crowded or rushed.”...

Asked whether he’d had conversations with House Speaker Nancy Pelosi (D-CA) about moving cannabis bills forward this Congress, Blumenauer said there’s been consistent communication between their offices and that the speaker is “very sympathetic” to the issue and “understands the necessity of reform.”

There are 26 initial cosponsors — half Democrats and half Republicans—on the House version. Reps. Ro Khanna (D-CA), Lou Correa (D-CA), Ed Perlmutter (D-CO), Matt Gaetz (R-FL) and Don Young (R-AK) are among those supporters. The previous version ended the 115th Congress with 45 cosponsors.

On the Senate side, there are 10 lawmakers initially signed on: Warren and Gardner, along with Sens. Catherine Cortez Masto (D-NV), Michael Bennet (D-CO), Amy Klobuchar (D-MN), Ron Wyden (D-OR), Dan Sullivan (R-AK), Kevin Cramer (R-ND), Lisa Murkowski (R-AK) and Rand Paul (R-KY)....

For the most part, the latest versions of the legislation are identical to the previous Congress’s bills, though there are two exceptions. Previously, there was a provision exempting hemp from the definition of marijuana, but that was removed—presumably because it is no longer needed in light of the passage of the 2018 Farm Bill, which federally legalized the crop.

The bigger change is that the new version contains a section that requires the Government Accountability Office to conduct a study on the “effects of marihuana legalization on traffic safety.” Among other data points, the office would be directed to collect info on “traffic crashes, fatalities, and injuries in States that have legalized marihuana use, including whether States are able to accurately evaluate marihuana impairment in those incidents.” A report on those effects would be due one year after the law is enacted.

This article in Roll Call, headlined "Marijuana bill could help Cory Gardner’s re-election chances. Will Senate GOP leaders get behind it?," provides some more insights into the politics in play. Here are excerpts:

The bill’s sponsors are confident the bill can pass — if it comes up for a vote. “If we get it on the floor of the Senate, it passes,” said Gardner. “If we get it on the floor of the House, it passes.”...

Gardner acknowledged the bill will have a harder time in the GOP-controlled Senate than in the Democrat-led House, saying he was working to convince Judiciary Chairman Lindsey Graham to advance the bill and Majority Leader Mitch McConnell to eventually allow it to come to a floor vote. Graham, asked about the bill, said he hadn’t thought about marking it up. “I’m not very excited about it,” the South Carolina Republican said....

Gardner is up for re-election in 2020 in a state that legalized recreational marijuana, and allowing him a legislative win could help the GOP retain control of the Senate. On the other hand, Republican leadership may be loath to give some Democratic co-sponsors running in 2020 — whether for re-election or the presidency — political victories.

If Congress passes the proposal, Gardner said President Donald Trump will sign it. “The president has been very clear to me that he supports our legislation,” Gardner said. “He opposed the actions that were taken by the Attorney General [Jeff Sessions] to reverse the Cole memorandum and believes we have to fix this.” The Cole memorandum is Justice Department guidance against prosecuting federal marijuana laws in states that have legalized it.

April 5, 2019 in Campaigns, elections and public officials concerning reforms, Federal Marijuana Laws, Policies and Practices, Who decides | Permalink | Comments (0)

Sunday, March 31, 2019

Federal scheduling and research challenges for cannabis and psychedelics

The second of four student presentation this coming week in my Marijuana Law, Policy & Reform seminar will focus on  federal scheduling under the Controlled Substances Act and the research and market realities impacted by the placement of marijuana in Schedule I.  Here is how my student has summarized his topic, along with the background readings he has provided:

The placement of cannabis in Schedule I practically prevents comprehensive and meaningful research into its medical applications and potential harms.  The federal government cites cannabis' placement in Schedule I as the reason rigorous research must be conducted before it can be rescheduled, but places restrictions on its research, because of its schedule, that are nearly impossible to overcome.  Is there an alternative pathway to federal cannabis legalization, or at least rescheduling, so that more meaningful research can be conducted? 

My presentation will examine U.S. drug scheduling, looking at the criteria and examples of substances in each schedule.  I will then provide an overview of the FDA research model by which new drugs come to market, contrast it with the type of research conducted on cannabis, and discuss why meaningful, rigorous research into cannabis is so difficult.  With this background, I will discuss the findings of a former UK drug-policy adviser that suggests substantial rescheduling is necessary, and how these findings helped initiate research into other Schedule I drugs.  Finally, I will provide an overview of research into other Schedule I substances, particularly psychedelics, and how this research may accelerate the rescheduling or federal legalization of cannabis so that its impact on health may be studied more effectively.

Background Resources:

March 31, 2019 in Assembled readings on specific topics, Federal Marijuana Laws, Policies and Practices, Medical Marijuana Data and Research, Recreational Marijuana Data and Research, Who decides | Permalink | Comments (1)

Monday, March 25, 2019

"The Effect of Marijuana Use on American Veterans with PTSD, and How the U.S. Department of Veterans Affairs Ought to Respond"

The title of this post is the title of a presentation to be made by one of my students in my Marijuana Law, Policy & Reform seminar this coming week.  Here is part of his explanation of his topic and links to some background reading:

Because the U.S. Department of Veterans Affairs (VA) is required to follow all federal laws, the VA is prohibited from prescribing, recommending, or assisting veterans in obtaining marijuana.  While veterans may discuss marijuana use with VA providers, VA doctors cannot help their patients participate in a state medical marijuana program and veterans cannot obtain reimbursement funding through the VA when they seek medical marijuana from state programs.

The inability of the VA to prescribe or recommend marijuana to American veterans with PTSD denies former service members an opportunity to receive treatment that many veterans not only want, but which also has the potential to be safer than the VA’s history of doling out addictive prescription drugs such as opioids, antidepressants, and anti-anxiety pills.  PTSD is a serious disease that is relatively common among combat veterans — it causes varying symptoms such as flashbacks, nightmares, severe anxiety, and uncontrollable thought about a triggering event.

The medical research in this arena has reached mixed findings.  While some researchers have found that the use of medical marijuana by veterans with PTSD has positive results, other studies suggest that marijuana use by those with PTSD may actually make symptoms worse.  There simply has not been enough controlled studies to conclusively state whether marijuana is beneficial for those with PTSD.  Nonetheless, there is plenty of anecdotal evidence by veterans suggesting that their use of marijuana has improved, or in some cases eliminated, symptoms associated with their PTSD.  Fortunately, the first clinical trial of marijuana for American veterans with PTSD is currently underway in Colorado.  My presentation will suggest that we need more controlled clinical trials such as this to further identify whether marijuana could (or should) truly be used as a remedy for veterans with PTSD.

* Medical journal article, "Post-Traumatic Stress Disorder" (discussing what PTSD is and various treatment options, including cannabis).

* Medical journal article, "Use and effects of cannabinoids in military veterans with posttraumatic stress disorder"(reviewing several studies and noting that while there is a need for more randomized and controlled studies, some PTSD patients report benefits in terms of reduced anxiety and insomnia and improved coping ability).

* Medical journal article, "Posttraumatic Stress Disorder and Cannabis Use Characteristics among Military Veterans with Cannabis Dependence" (exploring the negative effects of treating PTSD with marijuana and finding that individuals with PTSD may have a particularly difficult experience when attempting to quit marijuana).

* Medical journal article, "Marijuana and other cannabinoids as a treatment for posttraumatic stress disorder: A literature review" (explaining that conclusions cannot yet be drawn about the therapeutic effects of marijuana and related cannabinoids for PTSD; suggesting that rapidly changing legal landscape will permit promising clinical research).

* Medical journal article, "A review of medical marijuana for the treatment of posttraumatic stress disorder: Real symptom re-leaf or just high hopes?" (finding some positive data for use of marijuana for PTSD but also noting conflicting findings and limits of studies conducted thus far).

* Report on study, "Marijuana for Symptoms of PTSD in U.S. Veterans" (first clinical trial of marijuana for PTSD in American veterans underway).

* Recent Weedmaps article, "Marijuana Study Findings Could Hold Promise for Veterans With PTSD" (noting that MAPS study mentioned above could pave the way toward an FDA-approved prescription medicine; anecdotal evidence of veteran using black market rather than expensive medical marijuana program in CA)

March 25, 2019 in Federal Marijuana Laws, Policies and Practices, Medical community perspectives, Medical Marijuana Commentary and Debate, Medical Marijuana Data and Research, Medical Marijuana State Laws and Reforms, Who decides | Permalink | Comments (0)

Thursday, February 28, 2019

Senator Cory Booker introduces "Marijuana Justice Act of 2019"

D0frrINXQAI1noaAs reported in this press release, US Senator Cory Booker has joined with a number of other Democrats to formally introduce his social-justice-oriented federal marijuana reform bill.  Here are comments from the bill's sponsors (many of whom are running for President) from the press release, as well as some particulars and a link to the full bill:

U.S. Senator Cory Booker (D-NJ), a member of the Senate's Judiciary Committee, Rep. Barbara Lee (D-CA), Co-Chair of the Congressional Cannabis Caucus, and Rep. Ro Khanna (D-CA), today reintroduced their landmark bill to end the federal prohibition on marijuana.

In the Senate, the bill is cosponsored by Senators Ron Wyden (D-OR), Kirsten Gillibrand (D-NY), Bernie Sanders (I-VT), Kamala Harris (D-CA), Jeff Merkley (D-OR), Elizabeth Warren (D-MA), and Michael Bennet (D-CO).

"The War on Drugs has not been a war on drugs, it's been a war on people, and disproportionately people of color and low-income individuals," said Booker.  "The Marijuana Justice Act seeks to reverse decades of this unfair, unjust, and failed policy by removing marijuana from the list of controlled substances and making it legal at the federal level."

"But it's not enough to simply decriminalize marijuana.  We must also repair the damage caused by reinvesting in those communities that have been most harmed by the War on Drugs.  And we must expunge the records of those who have served their time.  The end we seek is not just legalization, it's justice."

"The War on Drugs has destroyed lives, and no one continues to be hurt more than people of color and low-income communities," said Wyden. "There is a desperate need not only to correct course by ending the failed federal prohibition of marijuana, but to right these wrongs and ensure equal justice for those who have been disproportionately impacted."

"Millions of Americans' lives have been devastated because of our broken marijuana policies, especially in communities of color and low-income communities," said Gillibrand. "Currently, just one minor possession conviction can take away a lifetime of opportunities for jobs, education, and housing, tear families apart, and make people more vulnerable to serving time in jail down the road.  It is shameful that my son would likely be treated very differently from one of his Black or Latino peers if he was caught with marijuana, and legalizing marijuana is an issue of morality and social justice.  I'm proud to work with Senator Booker on this legislation to help fix decades of injustice caused by our nation's failed drug policies."

"As I said during my 2016 campaign, hundreds of thousands of people are arrested for possession of marijuana every single year," said Sanders. "Many of those people, disproportionately people of color, have seen their lives negatively impacted because they have criminal records as a result of marijuana use. That has got to change. We must end the absurd situation of marijuana being listed as a Schedule 1 drug alongside heroin. It is time to decriminalize marijuana, expunge past marijuana convictions and end the failed war on drugs."

"Marijuana laws in this country have not been applied equally, and as a result we have criminalized marijuana use in a way that has led to the disproportionate incarceration of young men of color. It's time to change that," said Harris. "Legalizing marijuana is the smart thing to do and the right thing to do in order to advance justice and equality for every American."

"Marijuana should be legalized, and we should wipe clean the records of those unjustly jailed for minor marijuana crimes. By outlawing marijuana, the federal government puts communities of color, small businesses, public health and safety at risk." said Warren.

"This long-overdue change will help bring our marijuana laws into the 21st century. It's past time we bring fairness and relief to communities that our criminal justice system has too often left behind." said Bennet....

The Marijuana Justice Act seeks to reverse decades of failed drug policy that has disproportionately impacted low-income communities and communities of color. Beyond removing marijuana from the list of controlled substances - making it legal at the federal level - the bill would also automatically expunge the convictions of those who have served federal time for marijuana use and possession offenses, and it would reinvest in the communities most impacted by the failed War on Drugs through a community fund. This community reinvestment fund could be used for projects such as job training programs, re-entry services, and community centers.

The bill would also incentivize states through the use of federal funds to change their marijuana laws if those laws were shown to have a disproportionate effect on low-income individuals and/or people of color.

By going further than simply rescheduling marijuana with expungement and community reinvestment, Booker, Lee, and Khanna's bill is the most far-reaching marijuana legislation ever to be introduced in Congress.

The bill is retroactive and would apply to those already serving time behind bars for marijuana-related offenses, providing for a judge's review of marijuana sentences.

Full text of the bill is here.

The Marijuana Justice Act of 2019 looks nearly identical to the Marijuana Justice Act of 2017, so prior commentary of the MJA as in prior posts here and here remain germane.

February 28, 2019 in Federal Marijuana Laws, Policies and Practices, History of Marijuana Laws in the United States, Political perspective on reforms, Recreational Marijuana Commentary and Debate, Who decides | Permalink | Comments (0)

"All 2020 presidential candidates now support marijuana legalization efforts — even the Republicans"

Download (2)The title of this post is the title of this recent Boston Globe piece. Here are excerpts:

When it comes to marijuana, Elizabeth Warren of 2012 would probably not recognize Elizabeth Warren of 2019.

Seven years ago, Warren opposed legalization. In 2015, the US senator from Massachusetts said she was “open” to it. In 2016, she said, she voted for it privately at the ballot box. Now she’s one of marijuana’s top cheerleaders on Capitol Hill, championing a measure to protect the pot industry in states where it’s legal.

Warren’s evolution is not unique — in fact, 2020 will see the first US presidential race in which every candidate, at least so far, favors some path to legalization.

All 12 official Democratic candidates, as well as the potential Republican hopeful and former Massachusetts governor Bill Weld, told the Globe they now support full nationwide legalization, Canada-style. President Trump, meanwhile, has said he supports states’ rights to legalize.

“There’s been a tremendous evolution — marijuana legalization, if you look back, was really something for fringe candidates,” said John Lapp, a Democratic national campaign strategist.“It’s just not very controversial at all now.”

For Democrats, especially, being for cannabis legalization might be as much of a litmus test in 2020 among voters as is being for abortion rights. But they must face their past stances with honesty, political strategists say. In 2008, now-US Senator Kamala Harris touted her high conviction rates for drug dealers as a district attorney, and Joe Biden, the former vice president — who is likely to run, but hasn’t announced — was long an evangelist for the war on drugs.

A quarter-century ago, then-presidential candidate Bill Clinton did damage control by saying he tried pot while he was a Rhodes scholar in England, but “didn’t inhale.” Running in 2007, Barack Obama found it politically acceptable to admit he had smoked marijuana as a young man, and “the point was to inhale” — but he called it “a mistake.”’...

Now politicians, particularly Republicans, have a more politically safe way of supporting cannabis: by advocating for states’ rights, said Steve Fox, a cannabis lobbyist with VS Strategies. “At this point, the greatest driving factor at the federal level is simply the fact that it’s legal in so many states,” Fox said.

To combat the rising momentum, the anti-legalization group Smart Approaches to Marijuana is producing a guide for candidates that it says will be backed by medical associations. “Candidates will have a simple choice: They can either follow the pot lobby or they can follow the science,” said executive director Kevin Sabet....

Senator Cory Booker of New Jersey, who has made legalization a core part of his presidential campaign, said his position has much more to do with addressing racial disparities in policing than it does with freedom for recreational use. “I am pleased to see public sentiment moving as it is, but I have an approach to marijuana legalization that sees it as a justice issue and not just as an adult-use issue,” Booker said. “The damage that the enforcement and prohibition has done to our country is outrageous, unacceptable, and violates our values.”...

In New Hampshire this election cycle, candidates are likely to be asked about marijuana, as the Legislature there moves toward possibly passing legalization this year. Governor Chris Sununu, a Republican, has vowed to veto such a measure.

But don’t expect many candidates to focus their campaigns on marijuana. It’s not just safe now — it’s too safe. To stand out in a crowded field, Lapp recommends that a candidate take on affordable health care, immigration, or college debt — “something where there’s some upside and downside, some passion and some risk. I’m just not sure that’s the case with marijuana anymore.”

February 28, 2019 in Campaigns, elections and public officials concerning reforms, Federal Marijuana Laws, Policies and Practices, History of Marijuana Laws in the United States, Political perspective on reforms, Recreational Marijuana Commentary and Debate, Who decides | Permalink | Comments (2)

Monday, February 25, 2019

Perhaps not realizing federal law imposes prohibition, commentary urges someone to "implement a two-year moratorium on further legalization and commercialization of marijuana"

Download (7)This notable new Hill commentary authored by psychiatrist Mitchell Rosenthal, headlined "To ensure public health and safety, impose a two-year moratorium on marijuana legalization," is somewhat sensible as a matter of public policy and is somewhat clueless in light of modern legal realities.  Here are excerpts:

Marijuana legalization is gaining momentum across the country, backed by supportive public opinion, politicians, Wall Street investors and the increasingly influential for–profit cannabis industry.  By 2025, the legal U.S. marijuana market could be a roughly $50 billion business as a cornucopia of cannabis-based products become easily available in shops and online.

But in the rush to legalize marijuana, we are not taking adequate precautions and lack comprehensive and conclusive scientific evidence about what the impact might be.  In today’s largely unregulated environment, for example, marijuana marketers can seemingly tout the purported benefits of pot to relieve anxiety and aches and pains and even treat Alzheimer’s disease, without any oversight, regulation or recourse for disappointed users.

Consumers would be better served if we first implement a two-year moratorium on further legalization to ascertain the potential risks and possible benefits of marijuana. Under the current haphazard laws and rules adopted by states that have legalized, we are simply not able to ensure public health and safety as marijuana becomes mainstream.

Pausing the runaway train of legalization would provide the opportunity to study the impact so far on health and social behavior in legalized states, as well as in Canada, which legalized last year.   We would want a definitive understanding of the effect pot has on everything from driving impairment to workplace performance and learning development in young people....

As a psychiatrist who has treated substance abusers for decades, I understand that calling for a legalization slowdown might suggest a return to the fear-filled Reefer Madness past.  But it is more about being responsible, especially as many clinical studies indicate that pot is not as benign as many would like to believe and can be addictive as well as potentially harmful to the developing teenage brain.

Clearly, the same sensible precautions required of any new drug or food product should also apply to marijuana.  Warning labels, dosage recommendations and information about possible side effects, interactions and potency levels are critical for consumer safety, along with education programs and outreach....

To safeguard public health, we need clarity and consistent guidelines on a federal level for the legalization and commercialization of marijuana.  Questions abound about the appropriate age of consumption, where cannabis should be located — hopefully not near schools and parks and playgrounds — and whether marijuana is an effective treatment for opioid addiction, as many claim.

A two-year moratorium on marijuana legalization would enable us to answer many of these questions and lead to practical and enforceable guidelines based on scientific evidence, not the hyped claims of pot marketers.  Consumers — especially parents — have the right and the need to know.

Because this commentary speaks of the need for "clarity and consistent guidelines on a federal level for the legalization and commercialization of marijuana," I presume it is imagining the federal government as the legal entity to "implement a two-year moratorium on further legalization and commercialization of marijuana."  But, of course, federal law right now has long-standing and on-going complete prohibition on legalization and commercialization of marijuana.  That legal fact has not stopped "marijuana legalization is gaining momentum across the country" because prohibition cannot easily be enforced effectively against states interested in pursuing reforms.

Perhaps this commentary means to suggest (and would be more reasonable to suggest) that all states considering legalization sit tight for two years to provide more time and "opportunity to study the impact so far on health and social behavior in legalized states."  But legalization has been a reality in some form in California for more than two decades and in modern forms in Colorado and Washington for five years.  It seems highly unlikely that we will have "comprehensive and conclusive scientific evidence about what the impact might be" of legalization by early 2021.  Because it may take decades to reach "definitive understanding of the effect pot has on everything from driving impairment to workplace performance and learning development in young people," I am not sure just a two-year pause would be all that productive even if it were some how legally achievable.

That all said, this commentary is not misguided in identifying a range of issues that states should consider with respect to public health and safety in the reform of marijuana prohibition, and especially in (indirectly) suggesting that the federal government play a more active and productive role as states continue to move forward with reforms.  I think the Obama Administration was remiss when failing to set up a task force or study group on these critical health and safety issues when modern state marijuana reforms were heating up, and the Trump Administration also seems content to continue to ignore these issues all while Congress cannot itself move forward on any production reforms at the federal level.

February 25, 2019 in Federal Marijuana Laws, Policies and Practices, History of Marijuana Laws in the United States, Recreational Marijuana Commentary and Debate | Permalink | Comments (0)

Tuesday, February 12, 2019

House Subcommittee to hold hearing on Feb. 13 on "Challenges and Solutions: Access to Banking Services for Cannabis-Related Businesses"

Tomorrow afternoon, as detailed on this official webpage, the Subcommittee on Consumer Protection and Financial Institutions of the US House Committee on Financial Services will have hearing on the topic of banking access for cannabis businesses. One focal point for the hearing is consideration of draft legislation, the "Secure And Fair Enforcement Banking Act of 2019" or the "SAFE Banking Act of 2019," which is designed to allow marijuana-related businesses in states with existing regulatory structures to access the banking system. 

In addition to being the first-ever congressional hearing on banking for marijuana businesses, I sense this is the first of a series of possible effects by the Democratic-controlled House to move forward on various possible federal legislative reforms.  A few days ago, Click the Committee produced this Memorandum providing background, and here is the scheduled "Witness List":

  • The Honorable Fiona Ma, California State Treasurer
  • Maj. Neill Franklin (Ret.), Baltimore City & Maryland State Police Departments, and Executive Director, Law Enforcement Action Partnership (LEAP)
  • Ms. Rachel Pross, Chief Risk Officer, Maps Credit Union, on behalf of Credit Union National Association (CUNA)
  • Mr. Gregory S. Deckard, President, CEO and Chairman, State Bank Northwest, on behalf of Independent Community Bankers of America (ICBA)
  • Mr. Corey Barnette, Owner, District Growers Cultivation Center & Metropolitan Wellness Center

 

UPDATE: Here now are links to all of the written testimony of witnesses at this hearing:

February 12, 2019 in Business laws and regulatory issues, Federal Marijuana Laws, Policies and Practices, Who decides | Permalink | Comments (0)

Saturday, January 26, 2019

Reviewing the now "mainstream" and "trendy" (and still uncertain) new world of CBD products

Download (3)NBC News has this new article, headlined "CBD goes mainstream as bars and coffee shops add weed-related drinks to menus," that is worth a read, and I especially liked its closing paragraph. Here are excerpts:

Coffee. Cocktails. Lotion. Dog treats. You name it, CBD is probably in it.

CBD, short for cannabidiol, is a compound found in the cannabis plant.  It promises to deliver the calming benefits of marijuana without the high that comes from THC.  Companies are adding CBD to just about everything — a trend set to accelerate as regulations ease and consumer interest grows.

Most CBD is now federally legal thanks to the farm bill President Donald Trump signed in December. Companies still aren't supposed to add CBD to food, drinks and dietary supplements, but many are doing it anyway.  The Food and Drug Administration has said it plans to continue enforcing this ban but will also look into creating a pathway for such products to legally enter the market.

Some users swear by it, saying it relieves their anxiety, helps them sleep and eases their pain.  And forget stoner stereotypes when thinking about CBD. Moms and even pets are experimenting with it.  One research firm, Brightfield Group, expects the CBD market to reach $22 billion by 2022.

However, most of our current understanding of CBD is anecdotal — not proven through scientific studies.  And because CBD products aren't yet regulated, the quality can vary widely. "There's a lot of interest and excitement, for good reason, but I think people are pushing it too hard, too fast and are overgeneralizing things," said Ryan Vandrey, a professor at Johns Hopkins who studies the behavioral pharmacology of cannabis.

We don't know what exactly CBD interacts with in the brain or the body, but researchers do know that CBD tends to turn down abnormal signaling in the brain, said Ken Mackie, a psychological and brain sciences professor at Indiana University.  That's why CBD may help with epilepsy, anxiety and sleep. CBD and other cannabis compounds tweak systems in the body, a process he compares to lowering the volume. Other compounds, like opioids, ketamine and nicotine, simply turn them on and off.

There isn't much clinical research on the safety and efficacy of CBD. Studying cannabis has been challenging because it's technically illegal under federal law, meaning researchers must overcome a number of hurdles in order to study it.  We don't know anything about indications like sleep, anxiety or pain, Vandrey said.

We do know it's safe and effective in treating seizures in children with Lennox-Gastaut syndrome or Dravet syndrome. GW Pharma studied its CBD-derived drug, Epidiolex, in numerous clinical trials.  After reviewing the company's science, the Food and Drug Administration approved Epidiolex in June.

The lack of clinical evidence hasn't stopped consumers from trying it — and raving about it.  "It's always nice to have strong proof in placebo controlled trials, but if someone's taking a drug and feeling any benefit, more power to them," Mackie said....

The farm bill signed in December legalized hemp. Most CBD hitting shelves is derived from the hemp plant, which contains less than 0.3 percent THC, the psychoactive chemical in weed. Hemp's close cousin, marijuana, can contain upwards of 10 percent THC. So you can't get high from CBD products if the proper dosage is followed, but the industry isn't regulated on a federal level so the amount of THC can vary.

Doses can vary, too. Some shops recommend six milligrams of CBD when taken as a tincture or added to food. Others recommend at least 30. Again, since there isn't much clinical research on CBD, most of the recommendations are based on trial and error.

As more people dabble with CBD, more people are following the money, worrying some that bad products will enter the market and taint CBD's allure. Or worse, harm consumers. "There does need to be some sort of regulatory framework for overall product safety and to protect the customer from purchasing products that contain false advertisements or make unsubstantiated claims," said Pamela Hadfield, co-founder of HelloMD, a medical cannabis company, while cautioning against strict regulations that would be "too difficult for most manufacturers to comply."

Joe Masse, beverage director at The Woodstock bar, added a CBD cocktail to the menu in September. Called The White Rabbit, the drink is made with Bombay Dry Gin, sage simple syrup, honey, fresh lemon juice and 1 milligram of CBD oil.... "It's trendy right now, so I don't know how it will be in six months when we redo the menu," Masse said. "A year ago, activated charcoal was popular and now you can't find it anywhere."

Because I am not hip enough to know that "sctivated charcoal" was once, and now is no longer, a big deal, I am not the right person to be predicting the trend lines on the CBD trend.  But I do know how important and likely unpredictable it will be to see the FDA and/or state regulatory players take on CBD products and marketing in the wake of the new Farm Bill.  Just another important front to watch in the coming months and years and marijuana products and industry players continue to emerge from prohibition's shadow.

January 26, 2019 in Business laws and regulatory issues, Federal Marijuana Laws, Policies and Practices, Food and Drink, History of Marijuana Laws in the United States, Medical Marijuana Commentary and Debate, Medical Marijuana Data and Research, Medical Marijuana State Laws and Reforms | Permalink | Comments (0)

Sunday, January 6, 2019

Will 2019 really be the "year of weed"? How can we tell?

Images (5)The questions in the title of this post are prompted by this new lengthy Rolling Stone piece fully headlined "Why 2019 Will Be the Year of Weed: From more states legalizing to a boom of new kinds of products, here’s what to expect from the cannabis industry this year."  Here are excerpts from an article that merits a full read:

In 2018, pot reached a tipping point.  A clear majority of Americans now wants to see the drug made fully legal. California and Canada began selling marijuana to anyone over 21. Corporate behemoths like Altria (parent company of Marlboro cigarettes) and Constellation Brands (parent of Corona beer and Svedka vodka) made multi-billion dollar weed investments. And Senate Majority Leader Mitch McConnell (R-KY) managed to include hemp legalization in the 2018 Farm Bill — de facto legalizing every part of the cannabis plant except THC.

But at the same time, pot prohibition is not over.  Well over half a million folks are still arrested for possession every year. Smoking weed or working for a pot company can still threaten your housing, employment, immigration status, finances and freedom.  Cannabis business models, regulatory environments and market valuations shift on a daily basis....

As for the 2018 Farm Bill, it’s not yet clear what the regulatory landscape will look like for CBD in 2019.  [Some expect] researchers will soon be able to access CBD without jumping through the hoops necessary to acquire a Schedule I drug license from the DEA, which could finally allow scientists to provide more evidence of the compound’s uses and dosage.  Still, many people in the cannabis industry are concerned about what the exact guidelines will look like on the commercial production side, and how the rollout will go.

For business owners who have been involved in the weed game for a while, another aspect of the 2018 Farm Bill has proven a troubling sign of the times: anyone with a drug felony conviction in the past 10 years will not be allowed to participate in the legal hemp and CBD market.  “What the fuck is that?” asks longtime cannabis cultivator Bill Levers, who runs an influential Instagram account through his California-based company, Beard Bros Pharms.  “No one got rich on hemp.  There were no hemp cartels. So why would there be a restriction?”

The drug-felony provision in the Farm Bill cuts to the heart of one of the biggest unresolved problems facing the marijuana movement in 2019: the persistence of the illicit market, and the struggle to accommodate folks who have been illegally selling or growing marijuana for years.  It is now widely acknowledged that barring people with drug felony convictions from the cannabis industry is racist, as white people with experience on the illicit marijuana market are far less likely to be arrested or convicted.  But even without a criminal record, making the transition from outlaw to mogul has proven incredibly difficult, and many of the people who have tried have already given up....

Taxes, in particular, are a thorny issue.  Local and state governments generally consider pot taxes to be a primary incentive for legalization, but if tax rates are too high, fewer growers and dispensaries will try to go legal.  Already, lax oversight and an oversupply of legal cannabis in states like Oregon and Washington have led to diversion rates of at least 30 percent — meaning at a minimum about a third of legal pot is being sold on the illicit market. Meanwhile, in places like California, Canada and Michigan, hundreds of illegal storefront marijuana dispensaries compete with legal vendors, consistently undercutting them on price.  Illicit operators tell me again and again that they cannot afford to survive in the highly taxed and regulated legal market, so they intend to continue breaking the law — sometimes while simultaneously operating a legal business.

Because wealthy (and typically white) applicants have an easier time covering high taxes and licensing fees, some states and municipalities have created so-called “equity” programs to ensure a more diverse industry.  In 2017 and 2018, places like Oakland and Sacramento garnered fawning headlines for setting the lofty goal of legislating solutions to the catastrophic and racially disproportionate impact of the War on Drugs.  But moving into 2019, California cannabis operators of all colors and political stripes now often describe equity a well-intentioned idea that is failing in practice.  The words “tokenism” and “paternalistic” come up a lot.

“Equity is a marketing tool.  All of the licenses are going to be given to the people with the most money,” predicts Ophelia Chong, the founder of StockPot Images and executive creative director of Aura Ventures.  “Social equity will work for a few, but even then it will be 2 percent [from disadvantaged backgrounds], and those 2 percent will have to really climb a mountain to do it, with no help.”  Outside of California, however, including equity and restorative justice in cannabis legalization remains an alluring prospect.

“What I like about California is they give a chance for minorities to get in.  They doing the opposite in Michigan,” says Jason, whose cannabis social club, the OMS Dab House, has been a crucial gathering place for Detroit’s marijuana movement for the past decade.  Michigan legalized adult-use cannabis in 2018, but as in California, quasi-legal medical dispensaries began proliferating years ago, serving stoners and sick people alike.  (The ongoing legal confusion around sales and social spaces is why Jason preferred to not give his last name).  Though the city of Detroit is more than 80-percent black, black activists there have previously asserted that only three to five percent of local marijuana dispensaries were owned by black people. Jason predicts that, as Michigan’s legal cannabis industry becomes increasingly corporate and consolidated, those numbers will only go down.

January 6, 2019 in Business laws and regulatory issues, Federal Marijuana Laws, Policies and Practices, Medical Marijuana Commentary and Debate, Political perspective on reforms, Race, Gender and Class Issues, Recreational Marijuana Commentary and Debate | Permalink | Comments (0)

Friday, December 21, 2018

"How Legalizing Marijuana Is Securing the Border: The Border Wall, Drug Smuggling, and Lessons for Immigration Policy"

The title of this post is the title of this interesting and timely new Cato Institute policy analysis authored by David J. Bier.  Here is its executive summary:

President Trump has repeatedly cited drug smuggling to justify a border wall. Because it is difficult to conceal, marijuana is the main drug transported between ports of entry where a border wall would matter.  However, Border Patrol seizure figures demonstrate that marijuana flows have fallen continuously since 2014, when states began to legalize marijuana.  After decades of no progress in reducing marijuana smuggling, the average Border Patrol agent between ports of entry confiscated 78 percent less marijuana in fiscal year (FY) 2018 than in FY 2013.

As a result, the value of all drugs seized by the average agent has fallen by 70 percent since FY 2013.  Without marijuana coming in between ports of entry, drug smuggling activity now primarily occurs at ports of entry, where a border wall would have no effect.  In FY 2018, the average inspector at ports of entry made drug seizures that were three times more valuable overall than those made by Border Patrol agents between ports of entry — a radical change from 2013 when Border Patrol agents averaged more valuable seizures. This is because smugglers bring mainly hard drugs through ports. By weight, the average port inspector seized 8 times more cocaine, 17 times more fentanyl, 23 times more methamphetamine, and 36 times more heroin than the average Border Patrol agent seized at the physical border in early 2018.

Given these trends, a border wall or more Border Patrol agents to stop drugs between ports of entry makes little sense.  State marijuana legalization starting in 2014 did more to reduce marijuana smuggling than the doubling of Border Patrol agents or the construction of hundreds of miles of border fencing did from 2003 to 2009.  As more states — particularly on the East Coast — legalize marijuana in 2019, these trends will only accelerate.  The administration should avoid endangering this success and not prosecute state-legal sellers of marijuana.  This success also provides a model for addressing illegal immigration.  Just as legalization has reduced the incentives to smuggle marijuana illegally, greater legal migration opportunities undercut the incentive to enter illegally.  Congress should recognize marijuana legalization’s success and replicate it for immigration.

December 21, 2018 in Federal Marijuana Laws, Policies and Practices, Recreational Marijuana Commentary and Debate | Permalink | Comments (0)

Thursday, December 20, 2018

Prez Trump signs Farm Bill, officially legalizing hemp, which means a notable statement from the FDA Commissioner

Fda-gottlieb-1600b-e1503939617409a whole lot, but there are lots of complications as to what this means for the development of products using parts of the cannabis plant.  Right after the Farm Bill was signed into law, FDA Commissioner Scott Gottlieb released this lengthy statement highlighting some of these complications.  Here are excerpts:

Today, the Agriculture Improvement Act of 2018 was signed into law. Among other things, this new law changes certain federal authorities relating to the production and marketing of hemp, defined as cannabis (Cannabis sativa L.), and derivatives of cannabis with extremely low (less than 0.3 percent on a dry weight basis) concentrations of the psychoactive compound delta-9-tetrahydrocannabinol (THC). These changes include removing hemp from the Controlled Substances Act, which means that it will no longer be an illegal substance under federal law.

Just as important for the FDA and our commitment to protect and promote the public health is what the law didn’t change: Congress explicitly preserved the agency’s current authority to regulate products containing cannabis or cannabis-derived compounds under the Federal Food, Drug, and Cosmetic Act (FD&C Act) and section 351 of the Public Health Service Act. In doing so, Congress recognized the agency’s important public health role with respect to all the products it regulates. This allows the FDA to continue enforcing the law to protect patients and the public while also providing potential regulatory pathways for products containing cannabis and cannabis-derived compounds.

We’re aware of the growing public interest in cannabis and cannabis-derived products, including cannabidiol (CBD). This increasing public interest in these products makes it even more important with the passage of this law for the FDA to clarify its regulatory authority over these products. In short, we treat products containing cannabis or cannabis-derived compounds as we do any other FDA-regulated products — meaning they’re subject to the same authorities and requirements as FDA-regulated products containing any other substance. This is true regardless of the source of the substance, including whether the substance is derived from a plant that is classified as hemp under the Agriculture Improvement Act. To help members of the public understand how the FDA’s requirements apply to these products, the FDA has maintained a webpage with answers to frequently asked questions, which we intend to update moving forward to address questions regarding the Agriculture Improvement Act and regulation of these products generally.

In view of the proliferation of products containing cannabis or cannabis-derived substances, the FDA will advance new steps to better define our public health obligations in this area. We’ll also continue to closely scrutinize products that could pose risks to consumers. Where we believe consumers are being put at risk, the FDA will warn consumers and take enforcement actions.

In particular, we continue to be concerned at the number of drug claims being made about products not approved by the FDA that claim to contain CBD or other cannabis-derived compounds. Among other things, the FDA requires a cannabis product (hemp-derived or otherwise) that is marketed with a claim of therapeutic benefit, or with any other disease claim, to be approved by the FDA for its intended use before it may be introduced into interstate commerce. This is the same standard to which we hold any product marketed as a drug for human or animal use. Cannabis and cannabis-derived products claiming in their marketing and promotional materials that they’re intended for use in the diagnosis, cure, mitigation, treatment, or prevention of diseases (such as cancer, Alzheimer’s disease, psychiatric disorders and diabetes) are considered new drugs or new animal drugs and must go through the FDA drug approval process for human or animal use before they are marketed in the U.S. Selling unapproved products with unsubstantiated therapeutic claims is not only a violation of the law, but also can put patients at risk, as these products have not been proven to be safe or effective. This deceptive marketing of unproven treatments raises significant public health concerns, as it may keep some patients from accessing appropriate, recognized therapies to treat serious and even fatal diseases.

Additionally, it’s unlawful under the FD&C Act to introduce food containing added CBD or THC into interstate commerce, or to market CBD or THC products as, or in, dietary supplements, regardless of whether the substances are hemp-derived. This is because both CBD and THC are active ingredients in FDA-approved drugs and were the subject of substantial clinical investigations before they were marketed as foods or dietary supplements. Under the FD&C Act, it’s illegal to introduce drug ingredients like these into the food supply, or to market them as dietary supplements. This is a requirement that we apply across the board to food products that contain substances that are active ingredients in any drug.

We’ll take enforcement action needed to protect public health against companies illegally selling cannabis and cannabis-derived products that can put consumers at risk and are being marketed in violation of the FDA’s authorities. The FDA has sent warning letters in the past to companies illegally selling CBD products that claimed to prevent, diagnose, treat, or cure serious diseases, such as cancer. Some of these products were in further violation of the FD&C Act because they were marketed as dietary supplements or because they involved the addition of CBD to food.

While products containing cannabis and cannabis-derived compounds remain subject to the FDA’s authorities and requirements, there are pathways available for those who seek to lawfully introduce these products into interstate commerce. The FDA will continue to take steps to make the pathways for the lawful marketing of these products more efficient....

It should also be noted that some foods are derived from parts of the hemp plant that may not contain CBD or THC, meaning that their addition to foods might not raise the same issues as the addition of drug ingredients like CBD and THC. We are able to advance the lawful marketing of three such ingredients today. We are announcing that the agency has completed our evaluation of three Generally Recognized as Safe (GRAS) notices related to hulled hemp seeds, hemp seed protein and hemp seed oil and that the agency had no questions regarding the company’s conclusion that the use of such products as described in the notices is safe. Therefore, these products can be legally marketed in human foods for these uses without food additive approval, provided they comply with all other requirements and do not make disease treatment claims.

Given the substantial public interest in this topic and the clear interest of Congress in fostering the development of appropriate hemp products, we intend to hold a public meeting in the near future for stakeholders to share their experiences and challenges with these products, including information and views related to the safety of such products.

December 20, 2018 in Business laws and regulatory issues, Federal Marijuana Laws, Policies and Practices, History of Marijuana Laws in the United States, Who decides | Permalink | Comments (0)

Democrat wing of congressional Joint Economic Committee releases report on "The National Cannabis Economy"

Download (30)This week the Democrats of the US Congress' Joint Economic Committee released this interesting short report titled simply "The National Cannabis Economy." Here is how it gets started and its final passages:

The National Cannabis Economy

Cannabis, or marijuana, is the most commonly used illicit drug in the United States.  Though illegal at the federal level, states are taking action to legalize cannabis — from recreational use in states like Colorado and Maine to medical use in New Mexico and Florida.  A record 66 percent of Americans now support legalizing cannabis, a dramatic increase from just 12 percent in 1969.

The legalization of cannabis has significant implications for state economies, as well as the national economy.  The industry totaled more than $8 billion in sales in 2017, with sales estimated to reach $11 billion this year and $23 billion by 2022.  There were more than 9,000 active licenses for cannabis businesses in the U.S. in 2017, with the industry employing more than 120,000 people.

As more states move to legalize cannabis, these numbers will only continue to rise, potentially providing a new stream of revenue and jobs to local economies.  But to realize these benefits, policymakers must address conflicts between state and federal regulations that impede the growth of the cannabis economy....

Going Forward

There are a variety of proposals to fix the conflicts between state and federal cannabis laws.  Of these proposals, the bipartisan STATES Act has drawn support from President Trump and the cannabis industry.  The STATES Act would amend the Controlled Substances Act so that its provisions no longer apply to individuals acting in accordance with state laws. Importantly, the bill would also clarify that financial transactions with state-legal cannabis businesses are not drug-trafficking, creating a solution for financial institutions and the cannabis industry.  Several states could be next to legalize cannabis.  A bill to legalize cannabis is progressing through the New Jersey legislature, while New York lawmakers are preparing to consider similar legislation this year.  Similarly, newly elected governors in New Mexico, Minnesota, Illinois, and Connecticut have all voiced support for legal cannabis, positioning their states to consider the issue.

Conclusion

The growth of the cannabis economy presents opportunities for greater job creation, more tax revenue, and better patient care.  But current conflicts between state and federal law threaten to impede social and economic growth.  Going forward, lawmakers and regulators should prioritize solutions that promote greater research into the health effects of cannabis and reduce regulations that restrict the industry’s ability to conduct business.

December 20, 2018 in Business laws and regulatory issues, Campaigns, elections and public officials concerning reforms, Employment and labor law issues, Federal Marijuana Laws, Policies and Practices, Recreational Marijuana Commentary and Debate | Permalink | Comments (1)

Monday, December 17, 2018

New commentary assails "The Medical Marijuana Delusion"

Download (29)Paul J. Larkin, Jr., who is a senior legal research fellow at the Heritage Foundation’s Meese Center for Legal and Judicial Studies, has this notable new commentary titled "The Medical Marijuana Delusion." I recommend the piece in full, and here are excerpts:

Contemporary society also does not trust the unregulated backyard, in-home, or agricultural production and distribution of medications.  To protect the public against snake-oil salespeople and other charlatans, Congress enacted the Federal Food, Drug, and Cosmetic Act of 1938 (FDCA), the Drug Amendments of 1962, and scores of complementary laws.  Those statutes are critically important features of today’s public health regulatory programs. They prohibit, using criminal penalties, the distribution of a new drug in interstate commerce, unless the FDA Commissioner has previously found that it is “safe” and “effective” for its intended use. These laws empower FDA to carefully and strictly regulate and oversee the production of medicines intended for human consumption — and drugs cannot be disguised in food to avoid regulation, because FDA regulates food too. Those laws reflect an 80-year consensus that the nation should leave to the professional, scientific judgment of experts — physicians, biochemists, and the like — the question of which drugs can be created and used for therapeutic purposes by educated, trained, and licensed physicians — not “budtenders.”...

To be sure, the belief that marijuana could have legitimate therapeutic benefits has a basis in science.  FDA has found that a few cannabinoids — that is, biologically active constituents of cannabis — can have positive medical benefits, and FDA has approved the manufacture and distribution of synthetic forms of those substances to treat disease, most recently the spasticity caused by rare, severe forms of childhood epilepsy.  There might be other therapeutically useful cannabinoids as well. Regulators and scientists should conduct the necessary research to learn if that is true.

But the states that have authorized marijuana to be smoked for medical purposes have simply taken the law into their own hands.  Since 1996, more than 30 states have permitted marijuana to be smoked for medical purposes, despite the fact that FDA has never approved marijuana for medical use and there is no FDA-approved medicine that is smoked.  The reason is that there are serious, adverse, and undeniable health risks associated with smoking any agricultural product.  Since 1964, U.S. Surgeons General have consistently found that smoking tobacco is dangerous.  Congress finally agreed in 2009 by passing the Family Smoking Prevention and Tobacco Control Act, which empowers FDA to regulate cigarettes. Smoking marijuana carries many of the same risks as smoking tobacco, so no FDA Commissioner could legitimately treat marijuana in a unique manner.

Much of the debate over marijuana legalization has been misguided — intentionally so.  Legalization’s advocates have urged states to adopt medical marijuana laws to ease the suffering of the afflicted and dying.  In so doing, the medical marijuana movement has played on the compassion that Americans feel toward people about to traverse the River Styx or who are in such pain or distress that they would gladly make that crossing now.  State approval of marijuana for medical purposes, however, is proof that hypocrisy is the tribute that vice pays to virtue.

The real question is whether lawmakers should revise federal law to allow marijuana to be used for recreational purposes, just as alcohol and tobacco can be so used today.  If Americans are to honestly debate marijuana use, the debate must be over its utility as a recreational drug, not as medicine, and who should regulate its potential uses — the FDA Commissioner or the U.S. Attorney General.  The United States has followed the wrong approach to marijuana regulation for 80 years.  It is time to get it right.

December 17, 2018 in Federal Marijuana Laws, Policies and Practices, Medical Marijuana Commentary and Debate, Recreational Marijuana Commentary and Debate, Who decides | Permalink | Comments (1)

Saturday, December 15, 2018

Could Prez Trump's new Chief of Staff become major force pushing federal marijuana reforms in 2019?

Download (28)The question in the title of this post is prompted by President Donald Trump's  announcement that Mick Mulvaney will be his next Chief of Staff and this effective review of Mulvaney's marijuana reform record by Tom Angell at Marijuana Moment.  Here are the details, with links from the original:

Mulvaney, who currently serves as director of the Office of Management and Budget and acting director of the Consumer Financial Protection Bureau, was previously a member of the U.S. House, where he consistently voted to support marijuana reform amendments and cosponsored cannabis bills.

In 2015, for example, he voted for a floor amendment that would have barred the Justice Department from spending money to interfere with state marijuana laws. The proposal, which came just nine flipped votes short of passage, would have expanded on existing protections for state medical cannabis programs by covering recreational laws as well.  Mulvaney also voted for the medical marijuana rider three years in a row.

In 20142015 and 2016, he supported amendments to allow Department of Veterans Affairs doctors to recommend medical marijuana to military veterans.  Mulvaney backed a 2014 amendment to prevent the Treasury Department from punishing banks that work with marijuana businesses.  The South Carolina congressman he also voted for an amendment to protect limited cannabidiol (CBD) medical cannabis laws as well as a number of proposals concerning industrial hemp.

He also signed his name on as a cosponsor of several pieces of standalone marijuana legislation, including a comprehensive bill to reschedule cannabis and protect state medical-use laws, a measure to allow banking access for marijuana businesses, a hemp legalization bill and two separate CBD proposals.

“Mulvaney’s history of opposing wasteful government spending and support for states’ rights, specifically when it comes to marijuana, makes him our strongest ally in the White House,” Don Murphy, director of federal policies for the Marijuana Policy Project, told Marijuana Moment.

Pointing to how the Office of Management and Budget under Mulvaney on several occasions has floated severe funding cuts for the Office of National Drug Control Policy, commonly known as the drug czar’s office, Murphy said that the new acting chief of staff “delivers our ‘more liberty/less spending’ position directly into the Oval Office on a daily basis, where it could bring the federal war on marijuana to an end by 2020.”

It is unclear how long Mulvaney will serve as acting chief of staff, or how frequently marijuana issues will come across his desk, but the fact that he — and not an ardent legalization opponent like Chris Christie, who was also under consideration for the job — will sit a door away from the Oval Office is likely to be seen as a positive development for cannabis reform supporters.

In his new capacity, Mulvaney will be party to conversations about which congressional legislation the president should back as well as discussions about potential marijuana enforcement policy changes at the Department of Justice under a new attorney general.

December 15, 2018 in Campaigns, elections and public officials concerning reforms, Federal Marijuana Laws, Policies and Practices, Who decides | Permalink | Comments (0)

Friday, December 14, 2018

Senator Cory Gardner talking up getting STATES Act attached to federal criminal justice reform bill

This Denver Post article, headlined "Cory Gardner will try to pass marijuana banking, other reforms in the Senate next week," reports on a legislative gambit that the Republican Senator claims to be considering.  Here are the details:

Gardner plans to introduce an amendment Monday that, if passed, would let cannabis businesses open bank accounts in states where they’re legal. It would exempt retailers from federal prosecution while still keeping cannabis a Schedule 1 drug, meaning it would remain illegal in the states that haven’t legalized marijuana for medical or recreational use....

The Strengthening the Tenth Amendment Through Entrusting States (STATES) Act is a bill Gardner and Sen. Elizabeth Warren, D-Massachusetts, introduced together this summer. Its purpose was to have federal laws basically mirror state laws when it comes to cannabis. The bill hasn’t moved much since it was introduced, so Gardner wants to attach it to a criminal justice reform bill working its way through Congress during the lame-duck session.

“This is by far and away the best shot we’ve had so far,” Gardner told the Denver Post on Friday morning. The reason Gardner thinks this might work is because of how the Senate works. When a bill comes up for a vote, it’s a lot easier to attach a germane amendment than one that has nothing to do with the bill. Any one senator can object to an unrelated amendment, but relevant amendments often become pending — meaning they get a vote from the full Senate. “I can’t think of a more appropriate piece of legislation than this bill to try as an amendment to,” Gardner said.

The criminal justice bill is a priority for both President Donald Trump and Senate Majority Leader Mitch McConnell, R-Kentucky. Gardner said he hadn’t spoken to the president about his plan to attach his measure to the bill, but said “the president supports this legislation, and in its purest form it is sentencing reform.” He’s also confident that he has Senate support to add it as an amendment if he can get a vote.

Given that the leadership of the Senate Judiciary Committee and of the Senate generally has shown, to date, absolutely no interest in holding hearings or moving forward with the STATES Act, I will not dispute Senator Garnder's statement that this is "the best shot [supporters have] had so far." But given that the leadership of the Senate Judiciary Committee and of the Senate generally has shown, to date, absolutely no interest in the STATES Act, I would be shocked if it gets the procedural or substantive support needed to get through the Senate in the coming weeks. And even if it somehow did, there is limited basis to think it would also make it through the House. Ergo, I think this proposed gambit by Senator Gardner has improve the chances of the STATES Act passing in 2018 from 0.1% to maybe 0.5%.

That said, especially with Democrats in control of the House of Representatives come 2019, there is a brighten chance for some meaningful federal marijuana reform in the next Congress. And it is great that Senator Gardner remains highly motivated to try to get his version of reform before his colleague and ultimately into law.

Prior related posts:

December 14, 2018 in Campaigns, elections and public officials concerning reforms, Federal Marijuana Laws, Policies and Practices, Who decides | Permalink | Comments (0)

"Marijuana Federalism's Time Has Come"

The title of this post is the title of this notable new commentary at Reason authored by Ron Paul, a former congressman for Texas, and father of Senator Rand Paul. Here is an excerpt:

Today, 33 states have legalized medical marijuana while ten have legalized recreational marijuana.  The majority of Americans now live in states where some type of marijuana is legal.  Further proof of changing attitudes is that in 2016, Donald Trump's stated support for respecting state's authority over marijuana policy not only did not damage his campaign, it did not even cost him support from the religious right.

In this year's elections, medical marijuana was legalized in the conservative states of Utah and Oklahoma while recreational marijuana was legalized in Michigan.  Texas Representative Pete Sessions' use of his powerful position as chair of the House Rules Committee to block legislation prohibiting federal government from jailing sick people for the "crime" of using medical marijuana in accordance with their state laws may have played a role in his defeat.  Voters, especially young voters, are increasingly turned off by conservatives who favor individual liberty and federalism when it comes to guns and Obamacare but favor a federal police state when it comes to marijuana.

Ironically, the other drug warrior to lose his government job this month is also named Sessions.  Former Attorney General Jeff Sessions was very devoted to the war on marijuana. He revoked Obama-era policy prohibiting federal prosecution of individuals using marijuana in compliance with laws in their states.

Sessions resignation gave President Trump the ability to appoint an attorney general who agrees with his support for marijuana federalism.  Unfortunately, Trump's pick to replace Sessions, William Barr, was a staunch supporter of the war on drugs when he previously served as attorney general from 1991-1993.  Congress should make sure Mr. Barr will respect states' authority to set their own marijuana policies before confirming him.

Congress should protect states right to nullify federal anti-marijuana laws by passing the STATES Act.  Introduced by Sen. Elizabeth Warren (D-Mass.), the bill is supported by conservative Colorado Sen. Cory Gardner (R) and libertarians like my son, Kentucky Senator Rand Paul (R).  The STATES Act enjoys true bipartisan support and advances the cause of limited, constitutional government.

The federal war on marijuana failed to reduce marijuana use.  It did succeed in expanding the federal police state and shredding large parts of the Bill of Rights.  Fortunately, the majority of Americans ejected the inane policy of locking people up for using a non-government approved drug.  President Trump and Congress can side with this pro-Constitution majority by making sure the next Attorney General is a consistent supporter of the 10th Amendment and by passing the STATES Act.

December 14, 2018 in Federal Marijuana Laws, Policies and Practices, Medical Marijuana Commentary and Debate, Recreational Marijuana Commentary and Debate, Who decides | Permalink | Comments (0)

Tuesday, December 11, 2018

Federal farm bill officially includes provisions to legalize "hemp" defined as the cannabis sativa plant with THC levels under 0.3%

65c04791337f8e561d0e508b808657a0One of many reasons I typically use the work "marijuana" on this blog and in other discussions of marijuana reform is because I think it is the word most directly and commonly associated with the version of the cannabis plant (or the parts of the plant) containing the chemical ingredient (delta-9 tetrahydrocannabinol or THC) that gets humans high from consumption. But for various sound reasons, other researchers and many advocates like to talk only about "cannabis" because this is the scientific name for the plant often called marijuana and because there are so many possible uses for and derivatives from that plant that have nothing to do with getting high. Of course, regular readers surely know all this, and yet it is worth reviewing given this notable news as reported by this Marijuana Moment piece: "The Final 2018 Farm Bill ... Will Legalize Hemp." Here are the basics:

The final text of the 2018 Farm Bill was released on Monday, and industrial hemp legalization made the cut. Votes to send the legislation to President Trump’s desk are expected this week.

The bipartisan provision, championed by Senate Majority Leader Mitch McConnell (R-KY), will enable U.S. farmers to cultivate, process and sell hemp, the market for which is now a multi-billion dollar industry.

Following the announcement last month that lawmakers in the Senate and House Agriculture Committees had reconciled their respective versions of the agriculture legislation — with hemp legalization in the mix — questions remained about a controversial provision in the Senate version that would ban people with felony drug convictions from participating in the hemp industry. But a compromise was reached and the final version will allow such individuals to work for hemp businesses after 10 years....

“While this Farm Bill is a missed opportunity, there are some good provisions,” Rep. Earl Blumenauer (D-OR) said in a press release. “One of those provisions is to roll back our senseless hemp prohibition.”

“Our forefathers would be rolling in their graves if they saw us putting restraints on a versatile product that they grew themselves. We have farmers growing thousands of acres of hemp in dozens of states across the U.S. already. You can have hemp products shipped to your doorstep. This is a mainstream, billion-dollar industry that we have made difficult for farmers. It’s past time Congress gets out of their way.”

Under the legislation, hemp would no longer be in the jurisdiction of the Justice Department. Rather, the U.S. Department of Agriculture will lightly regulate the crop. If the bill passes and President Trump signs it, hemp legalization will go into effect on January 1, according to VoteHemp.

Here is the definition of "HEMP" as set forth in this draft legislation: "The term ‘hemp’ means the plant Cannabis sativa L. and any part of that plant, including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, with a delta-9 tetrahydrocannabinol concentration of not more than 0.3 percent on a dry weight basis." In other words, if and when this bill becomes law, it will be possible to produce and sell, without violating federal law, "certain version of the "plant Cannabis sativa L. and any part of that plant, including the seeds thereof and all derivatives, extracts, cannabinoids" etc. This seems to me a very big deal, though one that also seems certain to create even more confusion about what is and is not allowed under federal law with respect to so-called "medical marijuana."

This recent lengthy CNBC artice, headlined "Hemp legalization included in new farm bill could 'open the floodgates' on nascent industry," provide a review of what enactment of this legislation could mean and how we got here. Here is a snippet:

Hemp is a cannabis cousin of marijuana but it contains low levels of THC, the chemical that produces a "high" for pot users. Industrial hemp is used to make everything from apparel, foods and pharmaceuticals to personal care products, car dashboards and building materials.

"The vast majority of the market right now is going for CBD products," said Brightfield Group's [Bethany] Gomez. "You can find some hemp seed-based beauty products or hemp in some cereals and things like that, and there's such usage on the fibers for like clothes and other industrial purposes, but that's really minimal right now."

Brightfield Group estimates the domestic hemp market could reach $22 billion in the next four years. The estimate factors in the hemp amendment in the farm bill becoming law....

"There are three words why we have hemp now, and those words are tobacco state Republicans," said Kristin Nichols, editor at Denver-based Hemp Industry Daily, a publication owned by MJBizDaily. "There's been strong support from lawmakers and politicians up and down in former tobacco states looking for a replacement crop."

The hemp provisions in the 2018 Farm Bill were in the Senate version of the legislation sponsored by Senate Majority Leader McConnell. The Kentucky Republican put himself on the joint Senate-House conference committee formed to hammer out the details of the final farm bill. "I know there are farming communities all over the country who are interested in this," McConnell said in June when discussing the hemp legalization legislation before the Senate Agriculture Committee. "Mine are particularly interested in it, and the reason for that is — as all of you know — our No. 1 cash crop used to be something that's really not good for you: tobacco. And that has declined significantly, as it should, given the public health concerns."

December 11, 2018 in Business laws and regulatory issues, Campaigns, elections and public officials concerning reforms, Federal Marijuana Laws, Policies and Practices, History of Marijuana Laws in the United States, Political perspective on reforms, Who decides | Permalink | Comments (0)

Sunday, November 18, 2018

Spotlighting the still-challenging politics that surround the intersection of marijuana reform, criminal justice reform and racial inequities

Today's must-read for both marijuana reform and criminal justice reform fans is this lengthy new Politico article fully headlined "Racial Justice and Legal Pot Are Colliding in Congress: The latest fight over criminal justice reform is over allowing felons access to newly legal aspects of the cannabis industry. Lawmakers are getting woke — slowly." I recommend this piece is full, and here are some extended excerpts:

Thanks to Senate Majority Leader Mitch McConnell, the [Farm] bill includes an amendment that would permanently remove hemp from the list of federally banned drugs like heroin and cocaine, freeing hemp from the crippling legal stigma that has made it economically unviable for the past four decades.  But that amendment also includes a little-noticed ban on people convicted of drug felonies from participating in the soon-to-be-federally-legal hemp industry.

Added late in the process, apparently to placate a stakeholder close to McConnell, the exception has angered a broad and bipartisan coalition of lawmakers, hemp industry insiders and religious groups who see it as a continuing punishment of minorities who were targeted disproportionately during the War on Drugs and now are being denied the chance to profit economically from a product that promises to make millions of dollars for mostly white investors on Wall Street....

[L]awmakers like McConnell, who have discovered the economic benefits of relaxing prohibitions on products such as hemp, have nevertheless quietly found ways, like the Farm Bill felon ban, to satisfy the demands of their anti-legalization constituents, to the chagrin of pro-cannabis lawmakers and activists. After POLITICO Magazine reported on the drug-crime felon ban in August, three senators — Cory Booker (D-New Jersey), Rand Paul (R-Kentucky), and Jeff Merkley (D-Oregon) — wrote to Senate leadership demanding the removal of the ban, citing its “disparate impact on minorities,” among other concerns.

“I think there’s a growing recognition of the hypocrisy and unfairness of our nation’s drug laws, when hundreds of thousands of Americans are behind bars for something that is now legal in nine states and something that two of the last three Presidents have admitted to doing,” Booker told POLITICO Magazine. “If we truly want to be a just and fair nation, marijuana legalization must be accompanied by record expungement and a focus on restorative justice.”...

[The] once-radical notion that felons ought to gain priority for entry into a newly legal industry — instead of being shut out — has quietly gained bipartisan support on Capitol Hill, albeit not among Republican leadership.  In the House, this mounting opposition to the continuing punishment of felons first cropped up in September when the Judiciary Committee passed its first pro-marijuana bill.  It would expand access to scientific study of the cannabis plant, a notion agreed-upon by marijuana’s supporters and detractors alike.  However, Democrats almost killed the bill because it included language that barred felons (and even people convicted of misdemeanors) from receiving licenses to produce the marijuana.

Felon bans are commonplace in legal marijuana programs.  Every state has some version of it, but most of them have a five- or 10-year limit.  But the felon bans in both the Senate’s Farm Bill and the House’s marijuana research bill are lifetime bans, and the House bill includes misdemeanors, too. “Any restriction on misdemeanors goes in the exact contrary direction of the Second Chance Act,” said Rep. Jerry Nadler (D-New York), who will become chairman of the Judiciary Committee in January.  His criticism was echoed by Steve Cohen (D-Tennessee), who sought to have the misdemeanor language struck from the bill until its sponsor, Matt Gaetz (R-Florida), promised to address that language when it comes to the House floor.

In the Senate, the movement to protect the legal marijuana trade has taken the form of the proposed bipartisan Gardner-Warren STATES Act, which would maintain the status quo of federal non-interference of state-legal programs that was upended when then-Attorney General Jeff Sessions repealed the Cole Memo, an Obama-era document that outlined a hands-off approach to state-legal programs.  Booker’s Marijuana Justice Act would adopt California-style principles and apply them federally, going far beyond the STATES Act, removing marijuana from Schedule I (defined as having no medical value and a high risk of abuse) and eliminating criminal penalties for marijuana.  But unlike other pro-marijuana bills, it would also deny federal law-enforcement grants to states that don’t legalize marijuana; direct federal courts to expunge marijuana convictions; and establish a grant-making fund through the Department of Housing and Urban Development for communities most affected by the War on Drugs.

Booker’s bill has become popular among Senate Democrats.  Ron Wyden, Kirsten Gillibrand, Bernie Sanders, Kamala Harris, Jeff Merkley and Elizabeth Warren have signed on as co-sponsors — a list that looks a lot like a lineup of presumed candidates for the 2020 Democratic presidential primary.  “For too long, the federal government has propped up failed and outdated drug policies that destroy lives,” Wyden told POLITICO Magazine.  “The War on Drugs is deeply rooted in racism.  We desperately need to not only correct course, but to also ensure equal justice for those who have been disproportionately impacted. People across America understand and want change. Now, Congress must act.”

Recent polling shows that Americans agree with Wyden — to a point.  There is a widespread acceptance of legalizing marijuana.  Gallup has been tracking this number since 1969, when only 12 percent of Americans believed in legalizing it; in October, Gallup put the number at 64 percent, the highest ever number recorded.  Pew says it is 62 percent, also its highest number ever. 

But there is far less acceptance of the idea that the War on Drugs has had an adverse impact on poorer, minority communities, or that there should be some form of compensation in terms of prioritized access to the new industry. A  poll conducted by Lake Research Partners, a progressive DC-based polling firm, earlier this year on the “Politics of Marijuana Legalization in 2018 Battleground Districts” found that 62 percent of the 800 likely voters surveyed agreed with the idea “we need legalization to repair the financial and moral damage of the failed War on Drugs.”  However, when the pollsters added a racial component to this message — whether the respondents felt that the marijuana prohibition “unfairly target[s] and destroy[s] minority communities” — only 40 percent found that message to be “very convincing.”...

[M]any members of the Congressional Black Caucus have been slow to support marijuana legalization. But the CBC finally made its position on this issue clear in June when its 48-member caucus voted in an “overwhelming majority” to support policies beyond mere decriminalization: “Some of the same folks who told African Americans ‘three strikes and you’re out’ when it came to marijuana use and distribution, are now in support of decriminalizing the drug and making a profit off of it,” CBC Chairman Cedric L. Richmond, Democrat from Louisiana said at the time. “The Congressional Black Caucus supports decriminalizing marijuana and investing in communities that were destroyed by the War on Drugs…” 

Arguments for legalizing marijuana haven’t been entirely persuasive to sway many in the conservative black community, but re-framing it in the context of civil rights has brought many around to this new way of thinking. “What is moving conservative black and brown folks is this idea that we’re on the horizon of marijuana legalization,” according to Queen Adesuyi of the Drug Policy Alliance. “So the idea is in order to do this in a way that is equitable and fair, you have to start on the front end of alleviating racially biased consequences of prohibition while we’re legalizing — and that means expungement, re-sentencing, community re-investment, and looking at where marijuana tax revenue can go, and getting rid of barriers to the industry.”

Now that Democrats have won control of the House, co-founder of the Cannabis Caucus, Rep. Earl Blumenauer (D-Oregon), is poised to implement his blueprint for how the House under Democratic leadership would legalize marijuana at the federal level.  Racial justice is front-and-center in that plan.  The memo he sent to Democratic leadership reads in part, “committees should start marking up bills in their jurisdiction that would responsibly narrow the marijuana policy gap — the gap between federal and state marijuana laws — before the end of the year. These policy issues… should include: Restorative justice measures that address the racial injustices that resulted from the unequal application of federal marijuana laws.”

Cross-posted at Sentencing Law & Policy

November 18, 2018 in Business laws and regulatory issues, Campaigns, elections and public officials concerning reforms, Criminal justice developments and reforms, Federal Marijuana Laws, Policies and Practices, Polling data and results, Race, Gender and Class Issues, Who decides | Permalink | Comments (0)

Sunday, November 11, 2018

"Owning Marijuana"

The title of this post is the title of this new article authored by John G. Sprankling now available via SSRN. Here is its abstract:

Legal marijuana is the fastest-growing industry in the United States.  Tens of thousands of new businesses have arisen to meet the demand created by over 34 million Americans who use marijuana.  And the millions of pounds of marijuana grown, processed, and sold this year will generate more than $11 billion in revenue.  This industry is premised on the assumption that marijuana ownership will be protected by law.  But can marijuana be owned?  This Article is the first scholarship to explore the issue.

Federal law classifies marijuana as contraband per se in which property rights cannot exist.  Yet the Article demonstrates that marijuana can now be owned under the law of most states, even though no state statute or decision expressly addresses the issue.  This conflict presents a fundamental question of federalism: Can property rights exist under state law if they are forbidden by federal law?  The Article explains why federal law does not preempt state law on marijuana ownership.

This creates a paradox: state courts and other state authorities will protect property rights in marijuana, but their federal counterparts will not.  The Article analyzes the challenges that this hybrid approach to marijuana ownership poses for businesses and individuals.  It also examines the fragmented status of marijuana ownership in the interstate context, where business transactions involve states with conflicting approaches to the issue.

November 11, 2018 in Business laws and regulatory issues, Federal Marijuana Laws, Policies and Practices, Who decides | Permalink | Comments (0)