Cannabis-Industry leaders help to educate the 115th Congress on Cannabis-related policy as they consider legislation to ease the Federal burden faced by State-legal Cannabis companies.

 

On May 16th and 17th, the National Cannabis Industry Association (NCIA) hosted its 7th Annual Lobby Days in Washington D.C. with the goal to educate and earn support from Congress on Bills and Appropriation Amendments favorable to the Cannabis Industry. While the number of States with progressive Cannabis laws continues to increase, the policies enabling State-legal Cannabis markets to exist rest on uneasy grounds.

The topics discussed included issues directly affecting the Industry such as amending outdated Tax Codes, increasing access to Medical Cannabis for Veterans, and respecting State’s Rights related to Medical and Adult-use Cannabis laws. With the latest Quinnipiac poll showing that over 73% of Americans believe that the Federal Government should stay out of states with Cannabis laws, Congressional support is required to secure the confidence of the American people.

In this post, Mora Mota Group will identify the current “cannabis climate” in Washington D.C., outline the priority legislation of cannabis-related bills and appropriations supported by NCIA and Mora Mota Group, and the necessary steps that are required to protect this Industry at the Federal level.

 

Action on the Hill

With each passing year, more and more States are realizing the societal, cultural, and historical implications of legalizing Cannabis. However, despite the increase in availability at the State level, the Federal Government has made no permanent policy changes to legitimize the Cannabis Industry. During the Obama Administration, a pair of memos, the Ogden Memo and Cole Memo, were produced to help guide Prosecutors in States with Medical Cannabis and clarify the priorities of the Department of Justice regarding Medical Cannabis.

In 2014, for the first time in U.S. History, a pro-cannabis Amendment was made to the annual federal Appropriations legislation for Fiscal Year 2015. The Rohrabacher-Farr Amendment was passed to prohibit funds to be used by the DOJ in enforcing Federal Laws in Medical Cannabis States. Despite these protections insulating States with Medical Cannabis laws on their books, they do not apply to any States that have not already legalized at the State Level, do not protect States with Recreational Cannabis laws, and is subject to being repealed by the new administration at will.

 

“Path to Marijuana Reform”

As discussed in a previous post, the bipartisan Congressional Cannabis Caucus was formed last year in an effort to harmonize the dichotomy between State and Federal Cannabis laws. On March 30th, U.S. Senator Ron Wyden (D-OR) and U.S. Representative Earl Blumenauer (D-OR) introduced the “Path to Marijuana Reform,” a package of bills aimed at repairing Federal regulation of the legal Cannabis Industry and providing certainty for State-legal Cannabis companies operating in nearly every State in the Country.

The package of bills includes the Small Business Tax Equity Act (HR 1810), the Responsibly Addressing the Marijuana Policy Gap Act (HR 1823), and the Marijuana Revenue and Regulation Act (HR 1824) that paves the way for responsible federal regulation of the legal marijuana industry. While each bill has a chance of failing, the timing is ripe for any one of the bills to legitimize the industry.

 

2017 Priority Legislation

As the 115th Congress considers the fifteen different Cannabis-related bills this year, and over half of the legislation is being reintroduced from 2015. While the Industry requires a significant need for Federal and State alignment, Mora Mota Group believes that there are specific bills endorsed by NCIA, and sponsored by the Congressional Cannabis Caucus, that have a probable chance of passing this Congress includes HR 1810, titled the Small Business Tax Equity Act, and HR 2215, titled the Secure and Fair Enforcement Banking Act.

HR 1810 will amend the Internal Revenue Code Section 280E to exempt a trade or business that conducts cannabis sales in compliance with State law from the prohibition from allowing business-related tax credits in connection with trafficking in controlled substances. HR 2215 provides a “safe harbor” and additional protections for depository institutions that provide “financial product or service” to a covered business.

The goal for each bill is to address the issue concerning gaps of imbalance between Federal and State priorities. This pair of bills essentially provides a small tax break to small businesses and certainty for Financial Institutions providing services for cannabis-related companies in order for these State-licensed entities to operate as any normal business.

 

2017 Appropriations

There is a majority of the American people who support limiting the Federal Government’s enforcement procedures in States with Cannabis frameworks. While the Industry benefited from the hands-off approach of the Obama Administration, the arena in which the Medical Cannabis Industry has gained significant traction is during the Appropriations process. Each year, Congress is required to pass legislation to fund the government for the upcoming fiscal year, and provides an opportunity to limit the funding for certain federal departments that protects the Cannabis Industry.

The Rohrabacher-Blumenauer Amendment (previously the Rohrabacher-Farr Amendment) is the single pro-cannabis Amendment that protects state’s rights by prohibiting the use of DOJ funds to enforce federal law in state medical cannabis programs. This Amendment was passed through the Commerce, Justice and Science Committee and has been in law since Fiscal Year 2015, however, does not apply to any state that has not already legalized at the state level. The newest opportunity in this same Committee includes the McClintock-Polis Amendment; this Amendment would protect State’s Rights by prohibiting the DOJ from interfering with States that have implemented laws regulating the use, distribution, possession, and cultivation of cannabis for either adult or medical use.

Additionally, in the Military Construction and Veterans Affairs Committee, the Blumenauer Amendment was introduced in order to permit VA physicians to provide recommendations to veterans in a state medical cannabis programs. While some Senators and Representatives may subtly indicate their support for progressive cannabis legislation, a majority of Congress still believes their jobs may be at risk if they vote in favor of these bills due to the federal scheduling of Cannabis. However, urging Congress to vote in favor of cannabis-related amendments to the fiscal budget in regards to State’s rights is an easier pill for them to swallow.

 

Cannabis Legislation Press Conferences

After a day of nearly 200 meetings with Congressional Staff, two press conferences were held the next day at the House Triangle supporting Cannabis-related bills. The first press conference was led by NCIA and Lead Supporter of HR 1810, Rep. Carlos Curbelo (R-FL), to urge Congressional support to allow State-legal Cannabis businesses to take business-related tax credits similar to normal businesses.

Later in the day, a press conference held by Rep. Tom Garrett (R-VA) and Tulsi Gabbard (D-HI) was held to announce their support of HR 1227, essentially a State’s Rights bill, which would repeal all federal penalties for possessing and growing cannabis, allowing states to establish their own laws regarding cannabis, and completely remove cannabis from the Controlled Substances Act.

 

Conclusion

While the State-level Adult and Medical use markets continue to run their experiments, key data points resulting from these trials are slowly helping to change the minds of our Congressional leaders. Statements made by the top DOJ official, Attorney General Jeff Sessions, suggest that if Americans wish for a change to Federal Cannabis Policy that it is up to Congress to make the change, while also mentioning he "won't commit to not enforcing federal law." 

The legitimizing of this Industry requires a memorializing of public policy instead of temporary efforts in the Amendment process. As the uncertainty continues to exist in the House and Senate, the Industry will have to continue to bring their expertise to the Federal, State, and Local levels to help change their perspective on the reality of State-legal Cannabis markets.




 

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