Business
Marijuana banking reform dead in Congress as industry stakeholders seethe
The nation’s biggest marijuana industry voices begrudgingly acknowledged on Monday what Capitol Hill insiders believed for weeks was inevitable: Joe Biden’s first two years in office will end without federal marijuana banking reform.
The industry reached that conclusion after learning a must-pass omnibus spending package would not include the SAFE Banking Act – the bipartisan-supported measure banning federal regulators from punishing financial institutions that provide accounts to state-legal marijuana firms.
A well-placed source and stakeholders confirmed to MJBizDaily late Monday the omission of the SAFE legislation, which passed the House of Representatives seven times, most recently in July.
The development was first reported by Marijuana Moment.
Many Capitol Hill lobbyists and cannabis-industry boosters insisted the passage of SAFE was imminent, but without guaranteed support from at least 60 senators – the threshold to overcome Senate rules – the measure never went through the typical committee hearing process in the Senate.
Also, Senate Majority Leader Chuck Schumer didn’t call SAFE Banking to a vote.
“Our small businesses, law enforcement, and communities deserve better,” said Montana Sen. Steve Daines, one of the bill’s eight Republican co-sponsors.
The SAFE Banking Act “would have been well positioned to pass” the Senate if both parties could have marked up the bill in committee, Daines said in a statement.
Even though Democratic Sen. Corey Booker threatened in the summer of 2021 to withdraw his support of business-first measures such as SAFE Banking that don’t have social justice components, no compromise language – such as packaging banking reform with criminal-record expungements or even clarified gun-possession rights for medical cannabis patients – ever appeared in the Senate.
Earlier this month, Schumer and other top Senate Democrats believed they’d hatched a deal to include such a so-called “SAFE Plus” package into the National Defense Authorization Act, the annual defense spending bill.
But that deal unraveled after a Republican revolt led by Sen. Chuck Grassley and Senate Minority Leader Mitch McConnell.
Grassley’s office released a memo in which the Justice Department reported enforcement concerns if SAFE Banking passed.
And McConnell said that his caucus was opposed to tucking the measure into an unrelated bill.
The Senate could still technically perform some unprecedented, unexpected and unclear last-minute acrobatics to get SAFE passed in this lame-duck Congress.
But with time running out and no deal in place, the cannabis industry admitted defeat Monday.
The apparent death of SAFE comes at a time when capital markets have dried up and both sales and wholesale prices are dropping fast in legacy states including Colorado and California – where lax enforcement also allows rampant illicit-market competition to flourish, choking out legitimate businesses.
‘Win for the illegal market’
Congress’ “failure” to pass SAFE Banking will cause the entire industry to “suffer,” even as new markets come online and adult-use legalization spreads to red states including Missouri and possibly Oklahoma as well as presidential bellwethers such as Ohio and Pennsylvania, Boris Jordan, co-founder and executive chair of multistate operator Curaleaf Holdings said in a statement Monday.
“The entire industry will suffer as a result of this failure,” he said.
“This is, sadly, a win for the illegal market, which pays no taxes and has no regulations or testing safeties in place.”
SAFE Banking’s ultimate failure is a bitter disappointment for the cannabis industry, coming after:
- Repeated passage of the measure in the House.
- Insistence from Senate Democrats and from Schumer that marijuana reform in general and SAFE in particular was a priority.
- Biden indicated that his White House would be friendly to some marijuana reform.
Biden in October signed off on the first official review of marijuana’s federal classification since Richard Nixon and earlier this month signed into law a bill that will allow for more cannabis research.
‘Missed opportunity’
But industry players on Monday signaled their dissatisfaction with the president and Senate Democrats such as Schumer even as they repeated a familiar line: Real progress is just around the corner.
“In failing to enact the SAFE Banking Act, the Senate missed an opportunity to pass one of the rare pieces of legislation that has the support of both Republicans and Democrats, along with the majority of the American people,” Khadijah Tribble, the CEO of the U.S. Cannabis Council (USCC) and a senior vice president at Curaleaf, said in a statement.
“To say that we are disappointed is an understatement,” she added.
“But to assume the Senate’s inertia around cannabis banking reform dooms the entire cannabis industry discounts all of the headway we made this year.
“From the Biden administration announcing that it will conduct an official regulatory review of whether cannabis should be criminalized at all to the first standalone cannabis-related bill being signed into law to fund important research – 2022 will still mark the turning point in our fight to legalize cannabis.
“The USCC and our partners have built a movement to end cannabis prohibition that will continue in 2023, and I have no doubt we will eventually win.”
Source: https://mjbizdaily.com/marijuana-banking-reform-dead-in-congress-industry-stakeholders-concede/
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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