On the White House lawn this morning, getting ready to leave for the G-7 summit in Canada, Pres. Trump made positive comments about the cannabis bill introduced yesterday by Sen. Cory Gardner (R-CO) and Elizabeth Warren (D-MA). The STATES Act would allow states the freedom to legalize cannabis within their borders with no federal enforcement action permitted. The text of the Senate bill, just released, removes state legal cannabis from enforcement under the Controlled Substances Act.
On the lawn, the President said of the bill, “I probably will end up supporting that, yes.” He said, “We’re looking at it,” but also noted that he “really” supports Sen. Gardner. Of course the bill has to be passed by Congress before being sent to the President. The question is whether the process can be completed before the “silly season” of midterm elections brings most legislative activity to a stop. Trump promised to support a bill like this in exchange for Sen. Gardner resuming approval of judicial nominations, which he had stopped after Attorney General Jeff Sessions rescinded an Obama-era memo de-emphasizing federal enforcement against actors in cannabis legal states.
The House version of the bill was introduced this morning but text is not yet available. The initial sponsors will be Rep. Jared Polis (D-CO), David Joyce (R-OH) and Earl Blumenauer (D-OR). The bill also appears to effectively repeal IRS Code Section 280E which prevents cannabis companies from deducting ordinary business expenses. It also removes activity by cannabis companies being assumed to be money laundering, which will hopefully help more banks to take cannabis companies as customers. Certainly a dramatic potential development.
Senators Cory Gardner (R-CO) and Elizabeth Warren (D-MA) today introduced the Strengthening the Tenth Amendment Through Entrusting States (STATES) Act. While we have not seen the text yet, Sen. Warren has published a summary. The bill would amend the Controlled Substances Act (CSA) saying it no longer applies to anyone acting in compliance with state (or tribal) laws relating to the manufacture, production, possession, distribution, dispensation, administration or delivery of cannabis. It also legalizes industrial hemp and removes it from the CSA. In addition to other provisions, the bill prohibits the distribution or sale of cannabis to anyone under 21 other than for medical purposes.
There are a number of pending bills promising various levels of cannabis legalization or decriminalization. This bill is important because it is the result of conversations between Sen. Gardner and the President. When Attorney General Jeff Sessions rescinded the 2014 Cole Memo which de-emphasized cannabis enforcement against legal state actors, Sen. Gardner angrily stopped approving new judicial nominations. That led to Trump’s commitment to Gardner to support “states rights” legislation if brought to him. Advocates hope this bill has a chance to move quickly as a result.
While not listed in the summary, according to MJBizDaily, the bill also would repeal tax code Section 280E which prohibits cannabis companies from deducting their ordinary business expenses, and also would allow federally insured banks greater ease in accepting cannabis customers. Stay tuned!
As more and more politicians of all stripes move towards support of federal legalization of cannabis, two senior Republicans have joined the advisory board of a major cannabis company. According to The Hill, the former Speaker of the House John Boehner and former Massachusetts Governor William Weld became advisers to a New York-based grower and distributor of cannabis.
The article reminds us that Boehner was formerly opposed to legalization, though Weld, a moderate, has been a long-time supporter. They issued a joint statement saying, “we both believe the time has come for serious consideration of a shift in federal marijuana policy.” They focused particularly on the view of a large majority of Americans that cannabis should be legalized on a federal level.
As we know, President Trump said during the campaign that he is “100%” in favor of medical cannabis and that adult use should be decided by the states. Of course he is famous for changing his mind and frankly does not appear focused on the issue. And Attorney General Jeff Sessions remains strongly opposed to legalization and rescinded a series of advisory memos designed to protect those complying with state cannabis laws. But we have not yet seen any increase in federal enforcement efforts, though a number of states recently have been cracking down on unlicensed operators.
While it seems unlikely for the time being that the Trump Administration would unilaterally deschedule cannabis and legalize it (which they could), there is growing belief among DC-watchers that Congress might yet consider some action. For example, Republican Senate Majority Leader Mitch McConnell said he intends to introduce legislation to legalize hemp. The legislators are paying attention to the massive taxes coming into legal states, reduction in opioid use and deaths in those states, and many new jobs being created.
The entire cannabis industry descended on Las Vegas this week for the MJBiz conference where over 18,000 professionals gathered. While we were there, US Attorney General Jeff Sessions made some news during a Congressional grilling focused more on his involvement with Russian players.
Many have worried that Sessions intends to change or eliminate the Cole Memo. Issued in 2013, in this memo Obama’s Attorney General declared, essentially, that the US will not put any priority on enforcing federal cannabis laws against those legally complying with state laws. Certain exceptions were included, such as keeping cannabis away from children and keeping organized crime out of the business.
Many in the industry felt a bit of relief when Sessions said to Congress this past Tuesday, “Our policy is the same really, fundamentally, as the Holder-Lynch [ie Obama] policy, which is that the federal law remains in effect and a state can legalize marijuana for its law enforcement purposes, but it still remains illegal with regard to federal purposes.”
Sessions made some more news as well. For the first time, he agreed that cannabis is not as dangerous as heroin, even though both are listed as Schedule I drugs, i.e. deemed the most dangerous of all. He had previously called cannabis “only slightly less awful” than heroin.
In addition, he acknowledged that “we are bound” by the Rohrabacher-Blumenauer amendment, a statutory mandate. This amendment, renewed annually since 2014, prevents the use of federal funds to go after those complying with state medical marijuana laws. There had been some question after the most recent amendment thanks to a confusing statement issued by President Trump. Some interpreted the statement as potentially suggesting Trump views the amendment as not constitutional. Sessions has been attempting to convince Congress not to renew the amendment in the current budget.