Today, the Department of Justice and the Financial Crimes Enforcement Network division of the Treasury Department released long anticipated guidance to banks and other financial institutions on how they can interact with marijuana businesses that are licensed under state law.
Under current regulations, financial institutions are required to file suspicious activity reports when they suspect the transaction has a drug connection. The new guidance creates a three tiered system for these reports: marijuana limited, marijuana priority, and marijuana termination. This will allow these institutions to work with marijuana businesses as long as they were operating in accordance with state laws and regulations. The Department of Justice reserved the right to pursue criminal charges when they suspect businesses are breaking the guidelines they released late last year and would still require banks to report any activity they suspect to be as operating outside of state regulations.
“Now that some states have elected to legalize and regulate the marijuana trade, FinCEN seeks to move from the shadows the historically covert financial operations of marijuana businesses,” noted FinCEN Director Jennifer Shasky Calvery in a press release. “Our guidance provides financial institutions with clarity on what they must do if they are going to provide financial services to marijuana businesses and what reporting will assist law enforcement.”
“This reduces the burden on banks,” FinCEN stated during a briefing on the memo, “Marijuana under federal law requires a SAR. Now, the necessity is limited, reducing the banks’ burden a bit and more importantly clarifies where law enforcement focuses its attention.”
While this is a good start when it comes to allowing marijuana businesses to operate the same as those in any other regulated industry, memos such as these can be ultimately overturned by future administrations. To make this change lasting and binding, Congress must now act to codify it into law. The Marijuana Business Access to Banking Act is currently pending before the House of Representatives and would do just that. You can click here to quickly and easily write your representative and urge him/her to support this important legislation.
Representative Steve Cohen (D-TN) has introduced federal legislation, House Resolution 4046, to remove legal restrictions prohibiting the Office of National Drug Control Policy from researching marijuana legalization. These restrictions also require the office to oppose any and all efforts to liberalize criminal laws associated with the plant.
“Not only is the ONDCP the only federal office required by law to oppose rescheduling marijuana even if it is proven to have medical benefits, but it is also prohibited from studying if that could be even be true,” said Congressman Cohen. “The ONDCP’s job should be to develop and recommend sane drug control policies, not be handcuffed or muzzled from telling the American people the truth. How can we trust what the Drug Czar says if the law already preordains its position? My bill would give the ONDCP the freedom to use science—not ideology—in its recommendations and give the American people a reason to trust what they are told.”
These restrictions were placed on the Office of National Drug Control Policy by the Reauthorization Act of 1998, which mandates the ODCP director “shall ensure that no Federal funds appropriated to the Office of National Drug Control Policy shall be expended for any study or contract relating to the legalization (for a medical use or any other use) of a substance listed in schedule I of section 202 of the Controlled Substances Act (21 U.S.C. 812) and take such actions as necessary to oppose any attempt to legalize the use of a substance (in any form) that–
(A) is listed in schedule I of section 202 of the Controlled Substances Act (21 U.S.C. 812); and
(B) has not been approved for use for medical purposes by the Food and Drug Administration;”
You can quickly and easily contact your representative by clicking here.
Earlier today, 18 members of Congress signed onto a letter that was delivered to President Barack Obama calling for him to remove marijuana from Schedule I of the Controlled Substances Act.
“We request that you take action to help alleviate the harms to society caused by the federal Schedule I classification of marijuana. Lives and resources are wasted on enforcing harsh, unrealistic, and unfair marijuana laws,” the letter reads, “Nearly two-thirds of a million people every year are arrested for marijuana possession. We spend billions every year enforcing marijuana laws, which disproportionately impact minorities. According to the ACLU, black Americans are nearly four times more likely than whites to be arrested for marijuana possession, despite comparable usage rates.”
The letter was signed by Representatives Blumenauer (OR), Cohen (TN), Farr (CA), Grijalva (AZ), Honda (CA), Huffman (CA), Lee (CA), Lofgren (CA), Lowenthal (CA), McGovern (MA), Moran (VA), O’Rourke (TX), Polis (CO), Quigley (IL), Rohrabacher (CA), Schakowsky (IL), Swalwell (CA), and Welch (VT).
“Classifying marijuana as Schedule I at the federal level perpetuates an unjust and irrational system. Schedule I recognizes no medical use, disregarding both medical evidence and the laws of nearly half of the states that have legalized medical marijuana,” the letter continued, “A Schedule I or II classification also means that marijuana businesses in states where adult or medical use are legal cannot deduct business expenses from their taxes or take tax credits due to Section 280E of the federal tax code. We request that you instruct Attorney General Holder to delist or classify marijuana in a more appropriate way, at the very least eliminating it from Schedule I or II.”
You can read the full text of the letter here.
Nearly 30 states, and the District of Columbia are considering marijuana law reform legislation this year, including bills that cover legalization for adults, decriminalization, medical marijuana and hemp. Some states have a variety of reform bills simultaneously pending such as Arizona which is considering legalization and decriminalization, and Pennsylvania which is considering legalization as well as medical marijuana legislation. Here’s a quick breakdown:
14 states are considering legalization: Arizona, Hawaii, Maryland, Massachusetts, Missouri, New Hampshire, New Jersey, New York, Oklahoma, Oregon, Pennsylvania, Rhode Island, Vermont, and Wisconsin.
12 states and the District of Columbia are considering decriminalization: Alabama, Arizona, DC, Hawaii, Illinois, Louisiana, Michigan, Missouri, New Hampshire, New York, North Carolina, South Carolina, and Wyoming.
11 states are considering legislation to establish effective medical marijuana programs: Florida, Kansas, Kentucky, Hawaii, Michigan, New York, Pennsylvania, Tennessee, West Virginia, Minnesota and Wisconsin.
3 states are considering allowing industrial hemp cultivation: Indiana, New York, and Tennessee.
Click here to access NORML’s Action Alerts and quickly and easily contact your elected officials to encourage their support of any pending reform bills. Be sure to keep checking NORML’s Take Action Center to see if your state has joined the list!
The language, included in the final version of the omnibus federal Farm Bill, was approved by the House of Representatives on Wednesday. The Senate is expected to sign off on the measure imminently.
The provisions allow for the cultivation industrial hemp in agricultural pilot programs in states that already permit the growth and cultivation of the plant. Ten states — California, Colorado, Kentucky, Maine, Montana, North Dakota, Oregon, Vermont, Washington, and West Virginia — have enacted legislation reclassifying hemp as an agricultural commodity under state law.
Hemp is a distinct variety of the plant species cannabis sativa that contains only minute (less than 1%) amounts of tetrahydrocannabinol (THC), the primary psychoactive ingredient in marijuana. Farmers worldwide grow hemp commercially for fiber, seed, and oil for use in a variety of industrial and consumer products, including food. However, US federal law makes no distinction between hemp and marijuana.
Senate Minority Leader Mitch McConnell (R-Kentucky) — who advocated on behalf of the language to the 2014 Farm Bill conference, the group federal of lawmakers charged with finalizing the House and Senate versions of the Farm Bill – called the bill’s expected passage “an important victory for … farmers.”
A 2013 white paper published by the Congressional Research Service concludes: “[T]he US market for hemp-based products has a highly dedicated and growing demand base, as indicated by recent US market and import data for hemp products and ingredients, as well as market trends for some natural foods and body care products. Given the existence of these small-scale, but profitable, niche markets for a wide array of industrial and consumer products, commercial hemp industry in the United States could provide opportunities as an economically viable alternative crop for some US growers.”
The agency notes that the United States is the only developed nation that fails to cultivate industrial hemp as an economic crop.
Also last week, the American Farm Bureau Federation at its annual meeting approved a new policy resolution urging for the repeal of the classification of industrial hemp as a controlled substance under federal law stating, “At a time when small farms are innovating and diversifying to remain competitive, we should provide every opportunity to increase farm incomes and allow the next generation the ability to continue living off the land as their families have for generations.”
Federal legislation to reclassify industrial hemp and to allow for its commercial cultivation remains pending in both the United States House and Senate.