Government
Federal Cannabis Legalization Slips Further Away – SAFE Banking Act Removed from the China Competition Bill
Many in the cannabis industry saw the SAFE Banking Act as the saving grace for the financial troubles of the cannabis industry. The act was meant to change the scope of the financial constraints and burdens of the industry. However, changes and moves in the Senate have seen it removed from the COMPETES Act thanks to the Republican senators. Read on as we take a look back into the history of the act and the implications of this removal on the cannabis industry.
The SAFE Banking Act so far….
Before we delve into the happenings around the removal of this act and the impact it will have, we will go back to check its history. The SAFE Banking Act is a special bill put forward to help stabilize the finances of the cannabis industry at the federal level. The act is known as the Secure and Fair Enforcement Act and it is seen by many as the solution to the financial systems problems of cannabis business owners. The current financial system puts services such as loans and payrolls, and checking and deposit accounts under tight regulations from the cannabis industry. This means that limited financial institutions are open to serving cannabis business owners with the financial services they so desperately need.
The special act was included in the COMPETES Act of the House which was spearheaded by the Democrats. The COMPETES Act was set up to enable the U.S effectively increase its ability to compete with China on all fronts. The America COMPETES Act stands for Creating Opportunities for Manufacturing, Pre-Eminence in Technology, and Economic Strength Act of 2022. The act comprises different bills to strengthen manufacturing in the U.S. and also put it in the right place to compete with China.
The SAFE Banking Act has been included when this bill passed the House fives times in the past three years yet it hasn’t been validated. Until recently, it had been passed as a standalone bill after its first introduction in 2013 yet it has always failed to gain needed approval. This failure has been disappointing as hopes have been very high every time the bill made its way to the house. The temperature in the cannabis industry and from some lawmakers shows this might not be the last of the SAFE Banking Act.
What does this removal mean for the Cannabis industry?
The prime sponsor of the bill, Rep. Ed Perlmutter (D-CO) has reacted to the inability of this bill to be passed as being unfortunate. He believes sidelining the cannabis industry from the financial system is affecting lives and businesses beyond measure. The bill has been unable to scale past the Senate’s bipartisan U.S Innovation and Competition Act after the COMPETES Act passed last year. This has kept help away from the cannabis business owners in the industry who need assistance from the financial system.
The Republican lawmakers who repelled the Act were also without reason as they purported the action. Their argument remains that the bill is not a good fit with the legislation of the COMPETES Act which is a China Competition bill. The Democrats on the other hand are seeking to pair the bill as a form of social justice measure that will be hard to get passed in a committee. This has put the bipartisan agreement needed to pass the bill and enact it to a standstill and halted progress.
Reactions from the cannabis industry
Reactions around the cannabis industry have been flying in following the recent actions around the SAFE Banking Act in the House. The president of the U.S Cannabis Council, Steven Hawkins still believes that there is enough political will and support to help pass the bill. He believes this can be done by pairing the bill with other cannabis and criminal justice reforms. Hawkins has stated that the council aims to work with allies and members to ensure that this gets done soon. He doesn’t accept the present setback as a final stop and believes with the needed willpower and support, the bill will be finalized.
The U.S Conference of Mayors is the latest to speak on the need for the SAFE Banking Act to come to life. In its last meeting, the body endorsed a resolution that calls on Congress to pass federal banking reforms for the cannabis industry. The body addresses the loopholes of state laws and federal laws of cannabis as a problem for legal cannabis business owners. Without proper structures and laws, the body believes owners of legal cannabis businesses will be at the losing end except the lawmakers act.
The political director of the National Organization of Reform of Marijuana Laws (NORML), Morgan Fox, has reacted to the news of the removal. Fox believes that it is unfathomable that the house has refused to pass this bill for the sixth time of asking. He believes that it’s disappointing that the lawmakers are allowing politics to come first when many businesses and people are suffering. He also described the SAFE Banking Act as being in a legislative twilight zone making it hard to see the light of day.
Michael Sassano, CEO of Somaí Pharmaceuticals, a company that manufactures cannabis products believes the SAFE Banking Act is a way for lawmakers to make the industry safer. He believes Congress is missing out on this chance because they are proving to play it easy. A move that doesn’t factor in the owners of the cannabis businesses and their employees.
Bottom line
The present reality now is that advocates of reforms will have to try again to get passage of the bill. The U.S is sizing up to head into the midterm elections and the window to pass some cannabis reforms is passing. Fox has stated that the House is wasting a unique opportunity to help hundreds of thousands of Americans through meaningful bipartisanship. Activists and reform advocates have restated their commitment to seeing this bill come to life and we might see it come to life in no time.
New Mexico regulators fined a cannabis operator nearly $300,000 and revoked its license after the company allegedly created fake reports in the state’s traceability software.
The New Mexico Cannabis Control Division (CCD) accused marijuana manufacturer and retailer Golden Roots of 11 violations, according to Albuquerque Business First.
Golden Roots operates the The Cannabis Revolution Dispensary.
The majority of the violations are related to the Albuquerque company’s improper use of BioTrack, which has been New Mexico’s track-and-trace vendor since 2015.
The CCD alleges Golden Roots reported marijuana production only two months after it had received its vertically integrated license, according to Albuquerque Business First.
Because cannabis takes longer than two months to be cultivated, the CCD was suspicious of the report.
After inspecting the company’s premises, the CCD alleged Golden Roots reported cultivation, transportation and sales in BioTrack but wasn’t able to provide officers who inspected the site evidence that the operator was cultivating cannabis.
In April, the CCD revoked Golden Roots’ license and issued a $10,000 fine, according to the news outlet.
The company requested a hearing, which the regulator scheduled for Sept. 1.
At the hearing, the CCD testified that the company’s dried-cannabis weights in BioTrack were suspicious because they didn’t seem to accurately reflect how much weight marijuana loses as it dries.
Company employees also poorly accounted for why they were making adjustments in the system of up to 24 pounds of cannabis, making comments such as “bad” or “mistake” in the software, Albuquerque Business First reported.
Golden Roots was fined $298,972.05 – the amount regulators allege the company made selling products that weren’t properly accounted for in BioTrack.
The CCD has been cracking down on cannabis operators accused of selling products procured from out-of-state or not grown legally:
- Regulators alleged in August that Albuquerque dispensary Sawmill Sweet Leaf sold out-of-state products and didn’t have a license for extraction.
- Paradise Exotics Distro lost its license in July after regulators alleged the company sold products made in California.
Golden Roots was the first alleged rulebreaker in New Mexico to be asked to pay a large fine.
Source: https://mjbizdaily.com/new-mexico-cannabis-operator-fined-loses-license-for-alleged-biotrack-fraud/
Four marijuana companies, including a multistate operator, have filed a lawsuit against U.S. Attorney General Merrick Garland in which they allege the federal MJ prohibition under the Controlled Substances Act is no longer constitutional.
According to the complaint, filed Thursday in U.S. District Court in Massachusetts, retailer Canna Provisions, Treevit delivery service CEO Gyasi Sellers, cultivator Wiseacre Farm and MSO Verano Holdings Corp. are all harmed by “the federal government’s unconstitutional ban on cultivating, manufacturing, distributing, or possessing intrastate marijuana.”
Verano is headquartered in Chicago but has operations in Massachusetts; the other three operators are based in Massachusetts.
The lawsuit seeks a ruling that the “Controlled Substances Act is unconstitutional as applied to the intrastate cultivation, manufacture, possession, and distribution of marijuana pursuant to state law.”
The companies want the case to go before the U.S. Supreme Court.
They hired prominent law firm Boies Schiller Flexner to represent them.
The New York-based firm’s principal is David Boies, whose former clients include Microsoft, former presidential candidate Al Gore and Elizabeth Holmes’ disgraced startup Theranos.
Similar challenges to the federal Controlled Substances Act (CSA) have failed.
One such challenge led to a landmark Supreme Court decision in 2005.
In Gonzalez vs. Raich, the highest court in the United States ruled in a 6-3 decision that the commerce clause of the U.S. Constitution gave Congress the power to outlaw marijuana federally, even though state laws allow the cultivation and sale of cannabis.
In the 18 years since that ruling, 23 states and the District of Columbia have legalized adult-use marijuana and the federal government has allowed a multibillion-dollar cannabis industry to thrive.
Since both Congress and the U.S. Department of Justice, currently headed by Garland, have declined to intervene in state-licensed marijuana markets, the key facts that led to the Supreme Court’s 2005 ruling “no longer apply,” Boies said in a statement Thursday.
“The Supreme Court has since made clear that the federal government lacks the authority to regulate purely intrastate commerce,” Boies said.
“Moreover, the facts on which those precedents are based are no longer true.”
Verano President Darren Weiss said in a statement the company is “prepared to bring this case all the way to the Supreme Court in order to align federal law with how Congress has acted for years.”
While the Biden administration’s push to reschedule marijuana would help solve marijuana operators’ federal tax woes, neither rescheduling nor modest Congressional reforms such as the SAFER Banking Act “solve the fundamental issue,” Weiss added.
“The application of the CSA to lawful state-run cannabis business is an unconstitutional overreach on state sovereignty that has led to decades of harm, failed businesses, lost jobs, and unsafe working conditions.”
Alabama regulators are targeting Dec. 1 to award the first batch of medical cannabis business licenses after the agency’s first two attempts were scrapped because of scoring errors and litigation.
The first licenses will be awarded to individual cultivators, delivery providers, processors, dispensaries and state testing labs, according to the Alabama Medical Cannabis Commission (AMCC).
Then, on Dec. 12, the AMCC will award licenses for vertically integrated operations, a designation set primarily for multistate operators.
Licenses are expected to be handed out 28 days after they have been awarded, so MMJ production could begin in early January, according to the Alabama Daily News.
That means MMJ products could be available for patients around early March, an AMCC spokesperson told the media outlet.
Regulators initially awarded 21 business licenses in June, only to void them after applicants alleged inconsistencies with how the applications were scored.
Then, in August, the state awarded 24 different licenses – 19 went to June recipients – only to reverse themselves again and scratch those licenses after spurned applicants filed lawsuits.
A state judge dismissed a lawsuit filed by Chicago-based MSO Verano Holdings Corp., but another lawsuit is pending.
Source: https://mjbizdaily.com/alabama-plans-to-award-medical-cannabis-licenses-dec-1/
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