Week In Review: Missouri Cannabis Sales Exceed $1B; SAFE Banking Act in the Senate

In this week’s cannabis news round-up, SAFE Baking Act read in the Senate; Missouri cannabis sales pass $2 billion; iconic NorCal event the Emerald Cup announces its 2023 honorary award winners and the EU continues to stall on legalization.

Missouri Capitol building. PHOTO Henryk Sadura

Missouri’s Combined Cannabis Sales Exceed $1 Billion

The combined sales of legally regulated medical and adult-use cannabis in Missouri have exceeded $1 billion since the state legalized both medical and recreational markets. This significant sales milestone was achieved on May 2, according to the Missouri Division of Cannabis Regulation.

State government records show that April witnessed $30.1 million in medical marijuana sales and $91 million in adult-use cannabis sales, amounting to a total of $121.1 million. Comparatively, March recorded $126.2 million in legal cannabis sales. Projections indicate that Missouri’s cannabis market could reach a value of up to $505 million in 2023.

Since the launch of the state’s regulated adult-use market in February 2023, it has encountered some expected early challenges seen in other new recreational markets, such as supply shortages and high prices. Missouri’s medical marijuana market, on the other hand, commenced in October 2020 and has been in operation for a longer duration.

PHOTO rrodrickbeiler

SAFE Banking Act Read to Senate Banking Committee

The US Senate Banking Committee met on May 11 to discuss the SAFE Banking Act, a crucial legislation that would make it easier for the cannabis industry to access banking services.

The meeting, “Examining Cannabis Banking Challenges of Small Businesses and Workers,” heard testimony from lawmakers on both sides of the aisle, including Sens. Jeff Merkley, D-OR., and Steve Daines, R-MT., who reintroduced the standalone bill last week. The committee will also hear from witnesses, including the Cannabis Regulators of Color Coalition, Drug Policy Alliance and the United Food and Commercial Workers International Union.

Morgan Paxhia, managing partner at Poseidon Investment Management, called the day “historic” and an “important step” towards banking access. “The industry was well represented with a professional and honest discussion about the need for SAFE Banking to be done and done promptly,” he said. “The various groups have inputs that may help to further clarify the bill with a focus on a clean initiative. Opposition seems to continue with the same drug war era rhetoric that was largely refuted by members of the Senate along with industry representation. Anarchy doesn’t reign when cannabis is legalized, obvious to the majority of Americans currently living in legal cannabis states. Today was an important step and we look to the Senate to run, not walk, with the additional steps needed to get to a vote.”

If the bill advances through the committee stage, it would be voted by the Senate for the first time. The bill has been passed by the House of Representatives seven times in the past four years since it was first introduced. Industry insiders are cautiously optimistic that the bill, which has bipartisan support, will be signed into law this time.

Mila the Hash Queen
Mila Jansen, winner of the Willie Nelson Lifetime Achievement Award. PHOTO Maria Cavali

Emerald Cup Announces 2023 Honorary Awards

The 19th Annual Emerald Cup Awards are being held on Saturday, May 13, lighting up the Bay Area in a celebration of this year’s winners and tomorrow’s tastemakers. The annual event celebrates and recognizes excellence in the cannabis industry, specifically focusing on organic and sun-grown cannabis, while honoring the heritage of Northern California’s cannabis culture.

The Willie Nelson Lifetime Achievement Award: Mila Jansen

Visionary Award: Amber E. Senter

Social Justice Award: Weldon Angelos

Trailblazer Award: Alex Aquino

Additionally, renowned cannabis breeder Soma, creator of such beloved cultivars as NYC Diesel and Amnesia Haze, will be inducted into the Breeder’s Hall of Fame.

PHOTO Andrey Kuzmin

EU Continues to Push Back on Legalization

Europe is witnessing a mounting wave of calls for cannabis legalization, as an increasing number of countries aim to emulate the progressive steps taken by Canada and certain parts of the US. However, resistance from the European Union (EU) has resulted in many governments grappling with the challenge of formulating legislation that aligns with EU laws, international drug treaties and public health considerations. The sticking point is that the commercial legalization of cannabis contradicts international treaties, including the United Nations’ 1961 Single Convention on Narcotic Drugs.

Among the countries spearheading cannabis legalization reform in Europe reforms is the Czech Republic, who revealed its commitment to drafting a bill last year, with the aim of legalizing cannabis for adult use. This significant move represents the country’s most notable stride since the decriminalization of personal possession in 2010.

Germany has also joined the ranks by presenting proposals in October to legalize the consumption and sale of cannabis, a development that, if approved, would establish the world’s largest regulated national marijuana market.

Luxembourg has taken a step forward by enacting a law permitting residents to cultivate for personal use. Similarly, Malta has authorized private “cannabis clubs,” while Switzerland, despite not being an EU member, has granted approval for a trial period involving the sale and consumption of the drug in Zurich.

Even the Netherlands, where the cultivation and sale of cannabis remain technically criminalized but tolerated, has plans to initiate a pilot program by the end of this year to explore the legal sale of cannabis.

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Congressional Lawmakers Optimistic About Bipartisan Cannabis Banking Bill

A bipartisan group of US lawmakers has reintroduced legislation to give legal cannabis companies improved access to banking services routinely used by other businesses across the nation. The bill, the Secure and Fair Enforcement (SAFE) Banking Act of 2023, was refiled in the Senate late last month by Democratic Sen. Jeff Merkley of Oregon and Sen. Steve Daines, a Republican from Montana. Republican Rep. Dave Joyce of Ohio and Oregon Democratic Rep. Earl Blumenauer filed a companion bill in the House of Representatives, where previous versions of the legislation have passed seven times.

Because of the continued illegality of marijuana at the federal level, cannabis companies operating legally under state or tribal law often have difficulties obtaining traditional banking services such as payroll accounts and credit card transaction processing. Banks and credit unions that choose to do business with cannabis companies must follow strict regulations and take the risk of facing prosecution under drug and money laundering laws for noncompliance. As a result, the regulated cannabis economy is conducted largely in cash, leaving businesses, employees and customers vulnerable to crimes including armed robberies. The sponsors of the legislation also note that businesses operating in an all-cash economy pose a greater risk of tax evasion.

“This legislation will save lives and livelihoods. It’s past time that Congress addresses the irrational, unfair and unsafe prohibition of basic banking services to state-legal cannabis businesses,” Blumenauer, founder and co-chair of the Congressional Cannabis Caucus, said in a statement on April 26. “The House has passed the SAFE Banking Act on a bipartisan basis seven times. I’m delighted that the Senate is joining us in making it a priority.”

Bill Protects Banks That Serve the Cannabis Industry

If passed by Congress and signed into law by President Biden, the SAFE Banking Act would prevent federal banking regulators from prohibiting or restricting a bank from providing services to a regulated cannabis business operating legally under state law. The same protections would also apply to banks that serve other businesses associated with the regulated cannabis industry, such as attorneys and the owners of commercial rental properties. Federal banking regulators would also be barred from terminating or limiting a bank’s federal deposit insurance primarily because the bank is providing services to a state-sanctioned cannabis business or associated business.

“As it stands, the federal government has denied state-legal cannabis companies the same access to financial services as every other legal business across the Buckeye State and our country,” Joyce said, who also serves as co-chair of the Congressional Cannabis Caucus. “Not only does this distort the market in a growing industry, but it also forces businesses to operate in all cash, making them and their employees sitting ducks for violent robberies. The bipartisan SAFE Banking Act will allow cannabis businesses to operate legally without fear of punishment by federal regulators, making our communities safer.”

Additionally, the SAFE Banking Act prevents regulators from taking any action against a loan to the owner or operator of a cannabis business and from recommending or providing incentives to banks to halt or downgrade services to legal cannabis businesses. The legislation also creates a safe harbor from criminal prosecution, liability and asset forfeiture for banks and their officers and employees who provide financial services to legitimate, state-sanctioned cannabis businesses, and the right not to provide such services would be maintained. The latest version of the bill, which has been revised slightly compared to previous iterations, also extends the safe harbor protections to Community Development Financial Institutions (CDFIs) and Minority Depository Institutions (MDIs) that make commercial loans to minority-owned businesses, according to a report.

Legislation Approved Seven Times in the House

Previous versions of the SAFE Banking Act have been approved by the House of Representatives seven times, but the Senate has failed to bring the bill up for a vote under both Republican and Democratic leadership. Last year, Democratic leaders offered an enhanced version of the legislation known as SAFE Banking Plus that also contained provisions to expunge past federal convictions for marijuana-related offenses, but that bill also failed to advance. Democratic leaders hope the version introduced last month without the expungement provisions will gain a hearing in the Senate Banking Committee before advancing to the floor.

“Forcing legal businesses to operate in all-cash is dangerous for our communities; it’s an open invitation to robbery, money laundering, and organized crime—and it’s way past time to fix it,” said Merkley. “For the first time, we have a path for SAFE Banking to move through the Senate Banking Committee and get a vote on the floor of the Senate. Let’s make 2023 the year that we get this bill signed into law so we can ensure that all legal cannabis businesses have access to the financial services they need to help keep their employees, their businesses, and their communities safe.”

The SAFE Banking Act of 2023 has broad support in both chambers of Congress. In addition to the primary sponsors, the legislation has the support of 38 additional co-sponsors in the Senate, including five Republicans. In the House, the bill has eight additional co-sponsors, evenly split among Democrats and Republicans. The bill has been referred to the Senate Banking Committee for consideration, as well as three committees in the House.

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Weed Delivery Driver Robberies Spike in Michigan

A noticeable uptick in cannabis delivery driver robberies is being reported in Michigan, as authorities scramble to control the problem before it snowballs into something worse. The Michigan Cannabis Regulatory Agency (CRA) issued a bulletin Tuesday notifying cannabis businesses there’s been a rise in criminal activity.

Macomb Daily reports that authorities are concerned about the rise in crime in the metropolitan Detroit area. As delivery drivers are forced to carry around dangerous amounts of cash and/or cannabis, they are like sitting ducks with a target on their heads.

According to a recent bulletin issued by the CRA on Jan. 17, officials have “identified a pattern in reported criminal activity involving the drivers,” reporting 13 thefts of cannabis products, all within the past six weeks. The MRA regularly posts bulletins when an issue arises, including when a dangerous pattern emerges.

A rash of burglary incidents have been reported in Hazel Park and Ferndale in Oakland County, Utica in Macomb County, Westland, Hamtramck and Detroit in Wayne County, Ann Arbor, Ypsilanti, and Lansing. The burglaries began piling up since the beginning of December 2022.

The data shows that the thefts typically occurred at houses at the time of delivery. In some cases, armed robberies took place in which the drivers were assaulted and their vehicles were stolen.

When a robbery takes place, time is ticking for the victims involved. “Licensees and applicants are reminded that the administrative rules require they notify the CRA and local law enforcement authorities within 24 hours of becoming aware of—or within 24 hours of when the licensees should have been aware of—the theft or loss of any product or criminal activity at the marijuana business,” the CRA said in a press release.

“All suspicious activity should be reported to the CRA (using the form available here) and local law enforcement. Questions can be sent to the Cannabis Regulatory Agency Field Operations.”

Licensees are also reminded to watch for and report suspicious activity to police and the CRA. The reporting form is available online.

Not Just the Delivery Drivers are At Risk

Delivery drivers aren’t the only ones being targeted by criminals. Just last November, the CRA said 117 break-ins took place at cannabis businesses from April through November 2022. Authorities also said that the incidents took place primarily at adult-use stores rather than medical cannabis dispensaries.

The CRA says the following tactics were common among break-ins: A suspect vehicle parked in the far reaches of the parking lot or across the street; use of a tool such as a hammer or crowbar to enter the back door; or suspects enter the business and take as much as they can and leave before authorities arrive. A majority of the break-ins took place between 12 a.m. and 7 a.m. throughout West Michigan this year, according to the CRA.

It’s not just happening in Michigan, but in Oregon and Washington state as well. Earlier this year, about 30 robberies happened in a one-month span in Washington.

The surges in robberies at licensed cannabis shops and among delivery drivers adds to the urgency for a need for a bill such as the SAFE Banking Act. The SAFE Banking Act, which did not go as far legislatively as people initially suspected in 2022, would solve many of these problems.

“It makes absolutely no sense that legal businesses are being forced to operate entirely in cash, and it’s dangerous—and sometimes even fatal—for employees behind the register,” Washington Sen. Patty Murray said in a statement emailed to The Associated Press.

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SAFE Banking Act Fails for the Third Time 

Proponents weren’t aiming for a hat trick, but that’s precisely what they got when the SAFE Banking Act failed a third time in the US Senate. The SAFE Banking Act is legislation that aims to provide a framework for regulating financial institutions serving the cannabis industry. Currently, most financial institutions are hesitant to work with cannabis-related businesses due to the federal prohibition of cannabis and the risk of prosecution. This has led to a situation where many cannabis businesses cannot […]

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Biden Approaches Trifecta of Cannabis Reform Wish-List

Perhaps President Joe Biden is being swept along by the tide of history—or is shrewd enough to propitiously read the prevailing cultural climate. But thanks to his signature (or pledge thereof), the cannabis community is on the cusp of three major breakthroughs.

Expungement and Financial Access

After a long career of ambiguity on the cannabis question, in October Biden encouraged advocates by announcing pardons for all federal offenses of simple cannabis possession—and calling on governors to follow suit on the state level (where it would have far more practical effect, since the big majority of such cases are under state law).

Representatives Alexandria Ocasio-Cortez (D-NY) and Dave Joyce (R-OH) followed through on this move with a bill to incentivize state and local governments to expunge the criminal records of small-scale cannabis offenders. The Harnessing Opportunities by Pursuing Expungement (HOPE) Act would appropriate $20 million dollars to the Justice Department for assisting states and localities in reviewing and expunging cannabis convictions. 

This would appear to face slim odds in the lame-duck Congress, where the Democrats will maintain their razor-thin majority in the Senate but cede the House to similarly narrow GOP control pursuant to last month’s mid-term elections. Senate Republicans have six times killed the Secure & Fair Enforcement (SAFE) Banking Act, which would allow cannabis businesses operating in conformity with state law to access financial services, including the federal banking system. 

But now there is an initiative afoot to combine the two measures as a “SAFE Plus” bill. The idea has the support of Senate Majority Leader Chuck Schumer. On Oct. 31, Schumer told Yahoo! Finance that Congress is “very close to passing cannabis banking and expungement legislation,” after he’d made progress in swaying “a bunch of Republican senators.”

And there have indeed been signs of GOP intransigence starting to bend on these questions—the current version of the SAFE Banking Act was introduced in March by Sen. Steve Daines, a Montana Republican. In announcing the bill, Daines said: “My bipartisan bill will provide needed certainty for legal Montana cannabis businesses and give them the ability to freely use banks, credit unions and other financial institutions without the fear of punishment. This, in turn, will help increase public safety, reduce crime, support Montana small businesses, create jobs and boost local economies. A win-win for all.”

Politico now reports that in the countdown to the new Congress, which takes over in January, the Department of Justice has been meeting with staffers from the offices of Republican senators Pat Toomey of Pennsylvania, Jim Inhofe of Oklahoma and Chuck Grassley of Iowa to discuss concerns about the SAFE Banking Act. A DoJ memo on the matter, requested by Senate Republicans and released last week by Punchbowl News, states that some of the bill’s language “could significantly complicate law enforcement investigations and prosecutions.”

There is hope that if accommodations with the DoJ can be worked out and Republican fears allayed, SAFE Plus can be on Biden’s desk by year’s end—with his signature practically a foregone conclusion. A spokesperson for Sen. Daines told Cannabis Now: “Discussions are ongoing and we’re trying hard to get SAFE passed into law this year.”

Widening Medical Research

On Dec. 2 President Biden signed legislation getting the federal government out of the way of medical research into cannabis, and encouraging the development of new commercial drugs derived from the plant.  The bipartisan Medical Marijuana & Cannabidiol Research Expansion Act was jointly introduced in the Senate by Grassley, Dianne Feinstein (D-CA) and Brian Schatz (D-HI), and won unanimous consent in the upper chamber.

A breakdown by legal analysis Beveridge & Diamond notes that the new law has three major measures. It provides a mechanism for the scientific study of cannabis and cannabidiol (CBD) for medical purposes; it opens a pathway for the FDA to approve commercial production of drugs containing or derived from cannabis; and it protects doctors, who may now discuss with their patients the potential benefits or harms of using cannabis and cannabis derivatives.  

Passage of the law is raising high hopes for prompt Congressional action on SAFE Plus. 

Last-Minute Setback

Chuck Schumer was mustering support to get SAFE Plus included as a rider in the must-pass National Defense Authorization Act. He won support for this plan from Senate Republicans including Dan Sullivan of Alaska and Rand Paul of Kentucky. But that effort appears to have collapsed last week, after Senate Minority Leader Mitch McConnell took to the floor to excoriate the plan.

“The Senate has once again dodged its responsibilities,” House Cannabis Caucus co-chair Earl Blumenauer (D-OR) told Politico. “But it’s not over until the final minutes of this session.”

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Cory Booker Says Mitch McConnell Is Blocking Cannabis Bills

Democratic U.S. Senator Cory Booker of New Jersey says that Senate Minority Leader Mitch McConnell is opposed to marijuana policy reform and is blocking cannabis bills from being approved by his Republican colleagues. Booker said that McConnell’s opposition is preventing the passage of marijuana legislation in the upper chamber of Congress before the end of the year, after which control of the House of Representatives will switch to the GOP. 

Cannabis policy reform advocates had hoped to be able to pass meaningful reforms during the current lame-duck session of Congress before control of the House Representatives passes to the Republican Party. But Booker said that McConnell’s opposition to reforms including restorative justice for those harmed by decades of marijuana prohibition and a bill that would allow the legal cannabis industry access to banking services is influencing the stand taken by other GOP senators.

“They’re dead set on anything in marijuana,” Booker told NJ Advance Media. “That to me is the obstacle.”

The Republican party will take control of the U.S. House of Representatives in the new session of Congress next year after gaining a slight majority in last month’s midterm elections. Cannabis policy reform is not likely to be a legislative priority for GOP leaders, who have been less enthusiastic about marijuana legalization than their Democratic counterparts. If cannabis policy reform advocates do not pass a bill before the end of the year, the change in House leadership makes progress on the issue a long shot for at least the next two years.

Republican Representative Brian Mast of Florida, the co-chair of the Congressional Cannabis Caucus, said that cannabis policy reform is consistent with traditional Republican values, but McConnell has failed to take a leadership role on the issue.

“It’s not something that he’s historically been interested in moving or seems to be interested in moving right now,” said Mast. “He should. Just as much as Republicans have been out there arguing states’ rights over Roe v. Wade for the last several months, this is just as much of an issue.”

Hopes For Reform Hinge On SAFE Banking Act

Cannabis policy reform is currently largely focused on the Secure and Fair Enforcement (SAFE) Banking Act, which would ease access to traditional financial services for regulated marijuana businesses. Provisions of the bill have been passed by the House of Representatives seven times since 2019, but the measure has failed to gain the approval of the Senate. Most recently, language from the SAFE Banking Act was included in the House version of an annual defense spending bill, but the cannabis provisions were left out of the version released last week.

For the Republicans, bipartisan negotiations on cannabis policy reform are being led by Senator Steve Daines, with the goal of drafting a bill that includes restorative justice provisions championed by Booker while gaining the support of enough GOP senators to be approved in the Senate, where 60 votes from the nearly evenly split body of 100 lawmakers are needed to advance most legislation. 

“The senator is doing everything he can to get this bipartisan bill across the finish line this year for the sake of public safety,” said Rachel Dumke, a spokeswoman for Daines’ office.

But Booker thinks that opposition to marijuana policy reform from McConnell, who has been a leader in hemp legalization, is making his fellow Republicans hesitant to support the SAFE Banking Act or a comprehensive legalization bill.

“The caucus is clearly divided but the people in power in their caucus are clearly against doing anything on marijuana,” Booker said.

Cannabis advocate Justin Strekal, the founder of the marijuana policy reform political action committee BOWL PAC, said that he is hopeful that provisions of the SAFE Banking Act can be attached to an upcoming must-pass omnibus spending bill currently being negotiated in Congress. If the cannabis policy reform measures are part of a larger bill, which would fund the federal government through September of next year, Republican senators could vote for the bill without being forced to openly “defy Mitch McConnell in front of him,” Strekal said. 

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SAFE Banking Act Left Out of Defense Spending Bill

A bid to include the SAFE Banking Act in a must-pass defense spending bill has failed, leaving advocates searching for a way to pass the legislation that would grant the legal cannabis industry access to banking services. Proponents of the measure had hoped to include provisions of the banking bill, known as the Secure and Fair Enforcement (SAFE) Banking Act, in the National Defense Appropriations Act (NDAA), an annual spending bill that funds the military. But the latest version of the NDAA released on Tuesday did not include the cannabis banking language.

Under the SAFE Banking Act, federal banking regulators would be prohibited from penalizing banks that choose to serve cannabis firms doing business in accordance with state law. Under current regulations, banks are subject to penalties under federal money laundering and other laws for servicing such companies, leaving the cannabis industry to operate in a risky environment heavy in cash. 

The legislation was initially introduced in the House in 2013 by Democratic Rep. Ed Perlmutter of Colorado, who has reintroduced the bill each subsequent congressional cycle. The bill has been passed seven times since 2019 by the House of Representatives, but each time the Senate has failed to bring the legislation to the floor for a vote.

Another amendment supported by cannabis policy reform advocates that would have given the states assistance with expunging past marijuana-related convictions also failed to make it to the final version of the defense spending bill. Before the latest text of the NDAA was released on Tuesday, Senate Majority Leader Chuck Schumer of New York told reporters that he was still working on getting the cannabis banking measure passed.

“It’s a priority for me,” Schumer said. “I’d like to get it done. We’ll try and discuss the best way to get it done.”

Republicans Balk At Adding SAFE To Defense Bill

But later in the day, Senate Minority Leader Mitch McConnell of Kentucky admonished Democrats for attempting to attach amendments not related to defense, including the SAFE Banking Act, to the spending bill.

“Even now, House and Senate Democrats are still obstructing efforts to close out the NDAA by trying to jam in unrelated items with no relationship to defense,” McConnell said on the Senate floor on Tuesday. “We’re talking about a grab bag of miscellaneous pet priorities — like making our financial system more sympathetic to illegal drugs, or the phony, partisan permitting-‘reform’-in-name-only language that already failed to pass the Senate this year.”

“If Democrats wanted these controversial items so badly, they had two years to move them across the floor. Heck, they could have scheduled those matters for votes this week. But no — we’re doing more mid-level nominations, while Democrats keep half-threatening to take our Armed Forces hostage over these extraneous matters,” said McConnell, adding “The Democrats’ failure to plan ahead for unrelated liberal pet priorities should not be creating uncertainty and confusion for the brave servicemembers who keep us safe. My colleagues across the aisle need to cut the unrelated hostage-taking and put a bipartisan NDAA on the floor.”

What’s Next?

The failure to include the SAFE Banking Act in the NDAA leaves the prospect of passing the cannabis banking legislation before the current Congress adjourns in two weeks unsettled. Morgan Fox, the political director for the cannabis policy reform group the National Organization for the Reform of Marijuana Laws, said that SAFE could be attached to a pending omnibus appropriations bill or perhaps be approved as standalone legislation.

“I’m glad that we still have other options,” Fox said Wednesday. “It’s pretty disappointing.”

“While there has been momentum and optimism around getting SAFE included in the National Defense Authorization Act, it has been known for some time that getting this through would be a challenge,” Sahar Ayinehsazian, partner at the cannabis law firm Vicente Sederberg LLP, wrote in an email to High Times. “The focus now is on the omnibus appropriations bill, which congress is currently negotiating. SAFE has growing support on both sides of the aisle and I, and many others in the industry close to this issue, think that there is a still a chance that movement can be made on SAFE via the omnibus bill during this session of Congress.”

The SAFE Banking Act is supported by a bipartisan coalition of lawmakers made up primarily of representatives and senators from states that have legalized medical marijuana or adult-use cannabis. The bill passed with overwhelming bipartisan support by a vote of 321-110 in the House last year, and senators from both parties are also in favor of passing the measure.

“The Senator is continuing to work every day to build consensus so we can pass “SAFE Banking” into law this year,” a spokesperson for Montana Republican Senator Steve Daines said in an email on Wednesday.

The senior senator from Montana, Senator Jon Tester, a Democrat, also said he “would like to see it pass this Congress.”

The banking bill is also supported by nearly two dozen governors in states that have liberalized marijuana policy. In a written statement, Conor Cahill, a spokesman for Democratic Colorado Governor Jared Polis, praised the work of Perlmutter and said he expects the legislation to pass this year.

“Governor Polis has long advocated for the passage of the SAFE Banking Act, and has repeatedly called upon Congress to pass this important legislation to protect cannabis-related businesses, support minority, women, and veteran-owned small businesses owners, create jobs, and strengthen public safety in Colorado communities and in the states,” Cahill wrote in a Tuesday email. “We hope and expect to see the final passage of his decade-long effort by the end of the lame-duck session.”

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Legal Cannabis Banking in the US

Legal cannabis banking in the United States is still an open question, even after the midterms. Cannabis legalization became a reality in two more states last week, with Maryland and Missouri joining the ranks as the newly legal states. Nearly half of Americans now live in a legal cannabis jurisdiction. This a significant step from fifteen years ago, when no state had legal cannabis. (And only a handful permitted medical exemptions.) But what about the push for federal legalization? And […]

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Schumer: Senate ‘Very Close’ To Passing SAFE Banking Act

Senate Majority Leader Chuck Schumer said Sunday that he and his colleagues are “very close” to passing legislation that would authorize financial institutions to provide services to cannabis businesses.

Speaking during a debate in his New York senate race, Schumer signaled that the SAFE Banking Act may finally be close to earning full passage.

“I am working in a bipartisan way with Democrats and Republicans to take the SAFE Banking Act, which allows financial institutions to involve themselves in cannabis companies and lend money to them—but it also does some things for justice, such as expunging a record,” Schumer said during the debate, as quoted by Seeking Alpha.

The SAFE Banking Act was passed by the Democratic-controlled House of Representatives in February, marking the sixth time that the body approved the legislation. 

The legislation was first introduced all the way back in 2013. If it were to become law, it would provide vital resources to cannabis retailers in states where adult-use marijuana has been made legal. 

Those shops have become susceptible to robberies, due to the large amounts of cash on hand. 

In March, the Seattle Times reported that there had already been 70 armed robberies in Washington state in the first three months of the year. That was more than double the total in both 2021 and 2020.

“You rob the places where the cash is,” Washington state treasurer Mike Pellicciotti said on a trip earlier this year to Washington, where he lobbied lawmakers to pass the SAFE Banking Act. “These robberies are tragic. But these robberies are also preventable.”

”You can’t have a $1.4 billion a year transaction taking place in the state of Washington in cash and not have the risk of these type of robberies … It’s time,” Pellicciotti added.

Pellicciotti and other state treasurers have been among the bill’s biggest advocates.

“Colorado weed stores, along with other states with legal cannabis businesses, are headed into their busiest week of the year,” Colorado state treasurer Dave Young tweeted earlier this year ahead of the 4/20 festivities, “yet these businesses must dangerously operate in a cash-based world. Let’s pass the #SAFEBankingAct this #fourtwenty.”

Democratic leaders like Schumer have been determined to pass some form of cannabis reform since the party secured control of Congress and the White House in 2020. 

Schumer spoke confidently last year about passing a federal legalization bill––even as President Joe Biden expressed reluctance about fully lifting prohibition.

“We will move forward,” Schumer said at the time. “[Biden] said he’s studying the issue, so [I] obviously want to give him a little time to study it. I want to make my arguments to him, as many other advocates will. But at some point we’re going to move forward, period.”

In April, the House passed the the Marijuana Opportunity, Reinvestment, and Expungement (MORE) Act, which would remove cannabis from the Controlled Substances Act, the federal statute that enshrines prohibition. 

Democrats in the Senate said that they would produce their own legalization bill, but the legislation’s release never came.

Now, with the midterm elections slated for next week––and with Democrats in jeopardy of losing control of both the House and the Senate––the hopes for federal legalization are dimming. 

That isn’t to say that cannabis reform advocates have come up completely empty with Democrats in charge.

Last month, Biden announced that he is issuing pardons to everyone with federal convictions for marijuana possession. Biden also signaled a desire to remove cannabis from the Controlled Substances Act.

“Federal law currently classifies marijuana in Schedule I of the Controlled Substances Act, the classification meant for the most dangerous substances.  This is the same schedule as for heroin and LSD, and even higher than the classification of fentanyl and methamphetamine – the drugs that are driving our overdose epidemic,” Biden said in his announcement.

“Too many lives have been upended because of our failed approach to marijuana,” he added. “It’s time that we right these wrongs.”

As Seeking Alpha noted, the version of the SAFE Banking Act under consideration “includes both banking reform and marijuana conviction expungements.”

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President Biden Sets Federal Cannabis Legalization in Motion

On drug policy, President Joe Biden is indisputably now one of the most consequential politicians in American history.

Demonized as one of the War on Drugs’ chief architects for sponsoring the 1994 crime bill that filled U.S. prisons with nonviolent drug offenders—a record that aged so badly even Vice President (and former prosecutor) Kamala Harris, attacked him on it—Biden on October 6 took the largest step of any US president toward legalizing cannabis.

In mid-afternoon tweets and a subsequent video, Biden borrowed a line drug-war reformists have been using for decades, calling current federal cannabis policy a “failed approach.” He announced pardons for “all prior federal offenses of simple marijuana possession,” and called on state governors to do the same for state charges (most cannabis arrests are for violations of state law).

He directed the Cabinet-level agencies overseeing federal health and criminal-justice policy to review cannabis’s classification under the Controlled Substances Act—currently Schedule I, “the same level as heroin—and more serious than fentanyl,” Biden observed. “It makes no sense.” He acknowledged “the clear racial disparities around prosecution and conviction.” And he hinted at more changes to come.

“Sending people to jail for possessing marijuana has upended too many lives–for conduct that is legal in many states,” he said. “Today, we begin to right these wrongs.”

Critics pointed out that the announcement does nothing for most people in trouble for cannabis. There are only an estimated 6,000 people in the federal penal system for cannabis possession, and Biden’s pardon won’t be extended to people convicted of cultivation or sales.

Further, full legalization is still years away, and is at serious risk if the White House or Congress swing to the Republicans. It will almost certainly require action from a Congress that’s proven near deadlocked on the issue to date, according to legal experts contacted by Cannabis Now.

Cynics also pointed out the timing: October, a month out from crucial midterm elections, the perfect time for an empty publicity stunt that’s more posturing than policy.

But the historic moment is still here. Just by observing the federal government’s classification of cannabis is absurd and wrong and by directing Cabinet-level agencies to investigating changing it, Joe Biden has now done more on cannabis than any president since Richard Nixon. Period.

“Dank Brandon,” the president’s weed-smoking meme alter ego, has arrived in reality. 

More Than Words

“I wouldn’t call the announcement symbolic,” said Scott Bloomberg, a law professor at the University of Maine who researches cannabis policy.

Scholars such as Bloomberg and Vanderbilt University’s Robert Mikos have taken a dim view of the line pushed by some legalization advocates that a president could legalize or reschedule solely through executive action—at least not without triggering challenges in the courts.

Instead, what Biden has is the bully pulpit. What he can do—and what he appears to be doing—is give Congress cover to change federal drug policy by producing scientific and legal arguments justifying that action. If Health and Human Services issues an opinion that Schedule I, which classifies cannabis as addictive and medically useless, is inappropriate, and if the Justice Department produces its own opinion that enforcing federal cannabis policy is impossible on the aggregate and harmful when harsh penalties are applied, then Congress should have an even easier time rescheduling.

“The President can’t wave a magic wand and legalize marijuana overnight; he has to use the power that Congress gave to the Executive Branch in the [Controlled Substances Act],” he said. Further, “pardoning marijuana possession offenders is an incredibly important and impactful thing to do. Encouraging governors to do the same is also incredibly important, as most marijuana offenders are in state prison systems.”

“This is the process that I think should take place, that should have taken place at least a decade ago,” added Douglas A. Berman, a law professor at Ohio State University’s Moritz College of Law and the executive director of the school’s Drug Enforcement and Policy Center.

And while President Biden may rightly be criticized by history for being slow to catch up with current science or even sound moral policy, politically speaking, this was probably the first opportunity, he added.

Congress needed to demonstrate that it couldn’t be trusted to pass meaningful legislation. Even relatively modest reforms like bills that would give cannabis businesses easier access to banks is hopelessly bottled up in an obstructionist Senate, where at least ten Republicans are needed to pass cannabis reform—and that’s if every Democrat is on board, which they are not.

In Berman’s view, Biden couldn’t realistically pursue championing cannabis reform before addressing issues that affect more Americans, including the ongoing COVID-19 pandemic, runaway inflation and surging energy prices—issues also connected to international crises such as the unprovoked war in Ukraine and an increasingly tense nuclear standoff with Russian President Vladimir Putin.

“Cannabis is just not first cut stuff,” Berman said. “I think he’s doing what he can.”

So Now What?

President Biden’s announcement was welcomed with open arms by the cannabis industry and its otherwise bearish investors as a rare example of good news in an otherwise dire period marked by enormous losses, cratering prices, a thriving illicit market and impossible state and federal taxes and regulations.

Stocks in publicly traded companies surged briefly Thursday on the news before settling down again on Friday. Press releases from c-suite types peppered reporters’ inboxes, praising Biden’s bold turn before turning the conversation back to material concerns like the stalled SAFE Banking Act. Which is to say: after Thursday’s high, Friday marked a return to earth and the difficult business of lawmaking along with a long list of unanswered questions.

The scheduling review could take six months to a year, by which time the Democratic Party may no longer be in control of Congress. The scheduling review could also likely produce recommendations cannabis advocates won’t like including separate schedules for CBD and high-THC products such as dabs, which could remain tightly controlled, suggested OSU’s Berman.

And the realities of actually legalizing cannabis—how to tax it, who to regulate it—are incredibly complex. These could take another presidential term to sort out, said Pat Oglesby, a former Congressional staffer and tax-policy expert who sat on California Governor Gavin Newsom’s blue-ribbon marijuana legalization panel.

“There hasn’t been much of a process” on legalization in Congress to date,” Oglesby said. “I think this is going to take a while, and if the Republicans win the House or the Senate, legalization is very likely out of the picture for the next two years.”

“This isn’t legalization, but it’s a big step. It’s showing the flag,” he added. “It’s a real sign to Congress that, look, it’s time to get moving.” And it’s the first sign from a president in many current voters’ lifetimes.

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