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(From Politico) – This could be a big moment for marijuana and Congress.
But Democrats are fighting Democrats over whether to focus on social justice issues or industry priorities like banking. Marijuana advocates are divided among themselves over whether to push for full legalization or settle for less far-reaching legislation. And many Republicans — some of whom are seeing the benefits of cannabis legalization in their home states — are still decidedly against any legalization on the national level, even for medicinal uses.
At the same time that Congress is in gridlock, there is growing national support for cannabis, which is illegal at the federal level but at least partially legal in 33 states. In addition, public opinion is shifting rapidly, with nearly two-thirds of Americans supporting legalization according to Gallup — double the level of support two decades ago. That’s led to a steadily growing number of lawmakers on both sides of the aisle who represent states with legal cannabis markets, making them more sympathetic toward legislation aimed at helping the burgeoning industry — which brought in roughly $10 billion in sales last year.
These conflicts between state and federal law have created a rash of problems for cannabis companies, including lack of access to banking services, sky-high federal tax rates and bewildering questions about exactly what business practices are legal.
“More and more members are hearing from their constituents about the need to get the federal government out of the way,” said former House Speaker John Boehner, who joined the board of cannabis company Acreage Holdings last year, despite opposing legalization while in Congress.
“You have a lot of Democrats who were already there. But many Republicans are starting to come on board, as they see this dichotomy between what’s going on in their own states and how the federal government continues to stand in the way.”
None of that has translated into bills getting to the finish line.
The central tension in the House is how much emphasis should be put on full marijuana legalization versus single-issue bills that address industry concerns.
The bill with the best chance of being enacted — the SAFE Banking Act, which would allow banks to do business with cannabis companies without fear of federal punishment — cleared a key House committee in March by an overwhelming bipartisan vote, and received a hearing in the Senate. Supporters of the legislation, which include the influential American Bankers Association, were predicting floor passage before the August break.
That didn’t happen.
Rep. Ed Perlmutter (D-Colo.), the chief sponsor of the banking bill, said he hopes it will come up for a vote on the House floor in the next few weeks.
“I’m going to do everything I can to be a noisy member of Congress to get myself onto the calendar,” Perlmutter said, acknowledging that appropriations bills will likely take precedent with the end of the fiscal year rapidly approaching. “I’m going to be the squeaky wheel.”
Shortly before the August recess, however, Judiciary Chairman Jerry Nadler (D-N.Y.) introduced much more far-reaching legislation. The MORE Act would end federal prohibition, expunge past marijuana convictions and establish grant programs designed to make sure members of minority communities are able to share in the potential financial benefits of legal markets.
“I don’t especially like incrementalism,” said Rep. Barbara Lee (D-Calif.), a co-sponsor of the MORE Act. “You know you gotta do this in a big way.”
Lee is also the first African American and the first woman to co-chair the Congressional Cannabis Caucus. She said Congress is at the point where a basic bill that would lift the federal ban on marijuana doesn’t cut it; any comprehensive marijuana legislation introduced now needs to include social equity and criminal justice reform — like the MORE Act.
The comprehensive bill has become the top priority for many advocates, much to the consternation of some lobbyists and other staffers on the Hill who know the bill stands little chance of being enacted anytime soon, in large part because there’s no way the Senate is going to entertain such a dramatic liberalization of federal drug policy.
“There is a sense that [MORE] is going to be the bill to make it to the floor and be the first marijuana bill out of the gate,” said Michael Collins of the Drug Policy Alliance, an advocacy group that supports overhauling the country’s drug laws. “The banking bill won’t go until after the MORE Act.”
The reason for that, advocates say, is a desire for the first piece of cannabis legislation to encompass social equity and criminal justice reform. Some see the SAFE Banking Act as an industry bill that doesn’t address equity. Others, though, like Amber Littlejohn of the Minority Cannabis Business Association, disagree with that assessment.
“If we’re going to create an equitable industry even two or three years from now, we need to be able to [address the] No. 1 hurdle to equity, which is access to capital,” Littlejohn said. “We can have the best-designed state equity program, but if there is no funding, it will fall flat.”
Littlejohn argues that as long as cannabis remains illegal at the federal level, there will always be incentives for advocates and lawmakers to pass more cannabis legislation in the future — including something like the MORE Act — even if SAFE passes now.
Lee said the SAFE Act, while not comprehensive legislation, is important for minority business owners already in this industry, and should be seen as a great first step that does not slow down momentum for comprehensive legislation such as the MORE Act. For advocates like Littlejohn and lawmakers like Lee, the SAFE and MORE Acts are a “yes, and” situation, rather than an “either/or.”
“We want to make sure that we have people who’ve been affected by the terrible war on drugs first in line to be able to apply for licenses and develop their own businesses,” said Lee — referring to the equity programs in the works or recently established in many states. But recipients of priority status or equity program licenses, she said, “can’t do that unless they have the capital and the access to banking services.”
But even if House Democrats can overcome their internal differences and pass a bill — whether banking legislation or something more ambitious — it will face a treacherous path in the Senate. Majority Leader Mitch McConnell has shown zero interest in doing anything to make it easier for marijuana companies to do business.
There’s at least one wild card that could alter that dynamic: the electoral fate of Colorado Sen. Cory Gardner, who is arguably the No. 1 target of Democrats in 2020. Gardner has become a leading advocate for cannabis legislation, reflecting the booming industry in his home state.
In particular, Gardner has championed the STATES Act, which would essentially allow state-legal markets to continue operating without fear of federal punishment. That legislation hasn’t gained any traction during the current Congress, despite a huge push from industry groups.
If it’s perceived that Gardner needs a win in this area, it could soften McConnell’s resolve, lobbyists argue.
But longtime Senate watchers are extremely skeptical that McConnell will allow any cannabis legislation to come to the floor on its own. That means the only likely possibility is attaching cannabis legislation — whether the STATES Act, banking legislation or another proposal — to some must-pass package.
Said one veteran lobbyist who works on cannabis issues: “I would be shocked if Sen. McConnell wanted to spend a single second of floor time on weed.”