2021 is coming to a close—and seriously, how did that happen so fast? Since it’s that time of year to reflect on the year that was, these were some of the biggest stories in weed in 2021:
Sha’Carri Richardson was denied the chance to compete in the Tokyo Summer Olympics because she tested positive for THC. Richardson dominated the women’s 100-meter qualifying race at the U.S. Olympic Track and Field Trials in Eugene, Oregon. However, the U.S. Anti-Doping Agency (USADA) prohibited her from competing after the positive test.
“Richardson’s competitive results obtained on June 19, 2021, including her Olympic qualifying results at the Team Trials, have been disqualified, and she forfeits any medals, points, and prizes,” a statement from the USADA said.
Richardson, who had just learned about her mother’s death, consumed marijuana in Oregon, a legal cannabis state. Despite the lack of evidence that marijuana or THC enhances athletic ability and a petition signed by more than half a million people, Richardson could not compete.
Colorado’s Speaker of the House, Alec Garnett (D-Denver), introduced legislation to tighten rules for medical marijuana and marijuana concentrates. The Colorado Legislature passed HB 1317 in June, and Governor Jared Polis (D-Colorado), signed the bill into law in the same month.
A new state tracking system will monitor medical marijuana patients’ purchases to prevent them from buying more than the allowed daily limit. Additionally, the law lowered the purchase limit on concentrates for medical and recreational to 8 grams per day, down from the previous 40-gram limit. For medical marijuana patients between the ages of 18-20, the limit on concentrates was lowered to two grams per day.
Amazon, one of the largest employers in the United States, dropped drug testing for applicants and employees this year.
“We will no longer include marijuana in our comprehensive drug screening program for any positions not regulated by the Department of Transportation, and will instead treat it the same as alcohol use. We will continue to do impairment checks on the job and will test for all drugs and alcohol after any incident,” the company said in a blog post.
Going one step further, the company said that they would actively lobby Congress to pass the Marijuana Opportunity Reinvestment and Expungement (MORE) Act, which would legalize cannabis nationally.
This may be the biggest story that wasn’t. We’re at the end of 2021, and there still hasn’t been any movement on ending the prohibition on cannabis or improving access to banking.
Several marijuana legalization and banking bills were introduced in the last few years, including the MORE Act and the SAFE Banking Act. In 2020, the House passed the MORE Act, but it never received a hearing in the Senate. The House passed different versions of the SAFE Banking Act five times, but like the MORE Act, it stalled in the Senate.
One of the sponsors of the SAFE Banking Act, Rep. Ed Perlmutter (D-CO), said in a statement, “[P]eople are still getting killed and businesses are still getting robbed because of a lack of action from the Senate. The SAFE Banking Act has been sitting in the Senate for three years and with every passing day their unwillingness to deal with the issue endangers and harms businesses, their employees, and communities across the country.”
In states that have legalized adult-use marijuana, youth marijuana use has not increased.
A study published in JAMA Pediatrics found that teen marijuana use decreased after legalization. Researchers analyzed data from 1.4 million high school students between 1993 and 2017 and found an 8 percent decrease in teen use after states legalized recreational marijuana.
The U.S. Department of Education’s National Center for Education Statistics (NCES) analyzed ten years of data from students in grades 9-12 who reported marijuana use in the previous 30 days. They found that between 2009 and 2019, youth marijuana use has remained essentially unchanged.
“The overall percentage of students who reported using marijuana at least 1 time during the previous 30 days in 2019 was not measurably different from the percentage in 2009…. There was no measurable difference between 2009 and 2019 in the percentage of students who reported that illegal drugs were made available to them on school property.”
The findings are consistent with prior data concerning youth marijuana use.
Governor Jared Polis (D-CO) sent a letter to the sponsors of a cannabis legalization bill, asking them to consider passing marijuana banking and tax reform first.
Senate Majority Leader Chuck Schumer (D-NY), Senator Cory Booker (D-NJ), and Senator John Wyden (D-OR) are co-sponsors of the Cannabis Administration and Opportunity Act (CAOA). The bill aims to deschedule marijuana and promote social equity.
In his letter, Polis urged the senators to pass the Secure and Fair Enforcement (SAFE) Banking Act before the CAOA.
“I am thrilled that you are bringing forward a long-term, comprehensive solution that deschedules cannabis while enhancing social equity pathways. I hope that you will first focus your efforts on the two biggest barriers to the success of the cannabis industry: banking and IRS Code Section 280E (280E). Legislation to address these issues has more bipartisan support than ever before and can be passed in the short-term as you continue to work on the details of the CAOA.”
Access to banking has been a challenge for the cannabis industry from the beginning. The SAFE Banking Act would protect banks working with the cannabis industry from being penalized or violating federal anti-money laundering and illicit finance laws.
“The cannabis industry is simply too large to be prohibited from banking opportunities, and the Senate must remedy this harm by bringing this measure up for a vote in the Senate Committee on Banking, Housing, and Urban Affairs immediately.”
“Congress has the power and traction to address these inequities in the near-term while continuing to refine the CAOA, and I encourage you to efficiently take any opportunity to pass legislation concerning banking or 280E,” the governor wrote.
Polis cautioned the lawmakers against too high of a tax rate in the CAOA.
“It is critical that the tax level is not so cost prohibitive that it undermines the federal legal cannabis systems both already in place and being developed in emerging regulated cannabis states,” he wrote.
“I encourage the bill sponsors to carefully consider the federal excise tax rate so as not to set it so high that it would supplant much needed and relied upon state and local taxes. We should regulate cannabis similarly to alcohol; so it is appropriate for the bill sponsors to continue to look to the alcohol taxation framework for guidance on setting the appropriate tax rate for cannabis.”
The letter was sent in response to a public comment request from the senators who drafted the CAOA.
Well, it was another pandemic 4/20. While the smoke-outs and festivals were, for the most part, put on hold again this year, that doesn’t mean that there isn’t a lot to celebrate in cannabis. Here’s a roundup of some of the marijuana-related news that we’re looking forward to:
If it seems like the marijuana industry has been trying to get access to banking for forever, well, you’re not wrong.
Although states continue to legalize marijuana at a steady clip, federal law prevents banks from doing business with the cannabis industry.
The American Bankers Association has been lobbying in support of the SAFE Banking Act, legislation that was introduced last year.
“Banks find themselves in a difficult situation due to the conflict between state and federal law, with local communities encouraging them to bank cannabis businesses and federal law prohibiting it,” the group wrote in a letter to lawmakers. “Congress must act to resolve this conflict.”
This week the U.S. House of Representatives passed legislation that would allow banks to open their doors to cannabis companies in legal states. The SAFE Banking Act passed the House in a 321-101 vote.
Despite a false start in 2019, there’s hope that the bill has a real chance of passing in the Senate with this new Congress. However, some Democrats favor bypassing piecemeal legislation and going for comprehensive change—nationwide cannabis legalization.
The Push for Nationwide Marijuana Legalization
While there’s already legislation that would remove marijuana from the list of Controlled Substances—including the MORE and STATES Acts—Democrats are planning on unveiling legislation that is a “unified discussion draft on comprehensive reform to ensure restorative justice, protect public health and implement responsible taxes and regulations.”
Senators Ron Wyden (D-OR) and Cory Booker (D-NJ) are the lead authors of the legislation, which Democrats promise will be introduced any day now.
While we don’t have many details beyond the bill legalizing marijuana nationwide, Senate Majority Leader Chuck Schumer (D-NY) has said that the legislation will address social equity, banking protections, and prioritization for small businesses.
Sixteen states plus the District of Columbia have legalized adult-use marijuana, making cannabis consumption legal for more than a third of Americans. As cannabis is legalized state-by-state, it’s a matter of “when” not “if” marijuana will be legalized in the United States.
Denver Weed Delivery
Sometimes it’s the little things that make all the difference. While states like California have had marijuana delivery since state legalization, it’s been a long time coming in Colorado. Although the state green-lit cannabis delivery in 2019, municipalities have been slow to opt-in.
However, that’s all about to change in Denver this summer. This week, the Denver City Council unanimously approved a bill to allow dispensaries to hire third-party vendors to deliver weed to Denverites. The bill also removes Denver’s 220-store recreational marijuana dispensary cap. Any new cannabis dispensaries or marijuana delivery services will have to meet the state’s social equity criteria.
Mayor Michael Hancock (D) is expected to sign the bill, and cannabis delivery in Denver could start by late summer.
On Monday, Colorado Governor Jared Polis (D) announced a “Roadmap to Cannabis Banking & Financial Services” aimed at increasing access to banking for the state’s marijuana and hemp industries. Polis announced the plan in conjunction with the Colorado Department of Regulatory Agencies (DORA).
“As the first state to establish a legal marijuana industry and one of the first to implement an industrial hemp program, Colorado has become a national economic leader in the cannabis industry,” said Governor Jared Polis in a press release. “We are excited to release a bold, forward-thinking roadmap to provide much-needed guidance, clarity and support to state-chartered financial service providers that work with or are interested in working with the state-legal cannabis industry.”
The plan includes “seven primary areas of focus,” including:
- Providing clear regulatory guidance
- Encouraging new and emerging technologies in the banking and financial services space
- Reducing barriers while upholding consumer protection guardrails
- Demonstrating state support for financial businesses wishing to explore cannabis banking
Cannabis is legal in eleven states plus Washington, D.C., but both state and federal laws aimed at providing guidance and protection for the financial industry haven’t made much headway. The House of Representatives passed the SAFE Banking Act last year with bipartisan support, but it’s unclear when or if Senate Majority Leader Mitch McConnell (R-KY) will bring it to the floor for a vote.
“The lack of federal clarity creates a level of uncertainty and apprehension for our Colorado state-chartered banks and credit unions to provide basic financial services to legal cannabis-related businesses,” said DORA Executive Director Patty Salazar. “This roadmap is designed to lay out a path whereby our state-chartered financial institutions can explore whether or not they are in a position to provide services to this industry.”
Limited or no access to banking services means that many cannabis businesses, especially those that touch the plant, operate entirely in cash.
“Unbanked cannabis businesses often operate solely in cash, creating a significant risk to public safety,” said Treasurer Dave Young. ”By providing essential banking services to cannabis businesses, Colorado can lead the way in protecting public safety and promoting financial transparency.”
Congressman Ed Perlmutter (D-Lakewood), who was the lead sponsor of the SAFE Banking Act joined Gov. Polis at the announcement of the roadmap.
“Too many Colorado businesses, employees and communities have been targets of assault, robbery and other crimes due to the conflict between state and federal law when it comes to cannabis banking. I appreciate Governor Polis and his team working to improve access to the financial industry for Colorado cannabis and cannabis-related businesses. However, it is critical that Congress acts, including by advancing the SAFE Banking Act. Only by aligning state and federal law can we fully resolve the issues necessary to get cash off our streets and improve public safety in our communities,” said Perlmutter.
There have been big moves in cannabis in 2019, with approval for the end of marijuana prohibition reaching all-time highs. Cannabis and hemp saw more legalization both at the state and federal level, and even some bipartisan support in Congress.
Here were some of the biggest stories in weed in 2019:
Colorado finally approves rules for legal pot lounges and cafes
The problem of where to consume cannabis in Colorado has been an issue since adult-use cannabis use was approved by voters in 2012. In 2020, Colorado tokers will finally have a place to light up.
In May, Gov. Jared Polis (D) signed HB 1230 into law, licensed marijuana hospitality spaces in which cannabis can be consumed on-site. The new rules open the door for a variety of businesses to cash in on cannabis consumption, including hotels, spas, art galleries, cafes, lounges, and more. After purchasing medical or recreational cannabis at a dispensary, tourists and residents will be able to try out their purchases at on-site marijuana tasting rooms.
The law won’t go into effect until 2020, and cities and counties have the option of banning social-use establishments. Local governments will have the option of adjusting the regulations to allow vaping, for example, but not smoking.
Cannabis banking bill gains bipartisan support in House
The House of Representatives passed the Secure and Fair (SAFE) Banking Act of 2019 in September.
The SAFE Banking Act would protect banks that work with the cannabis industry from being penalized, or from violating federal anti-money laundering and illicit finance laws. For years the cannabis industry has struggled to gain access to even the most basic banking services.
Despite being a multibillion-dollar industry, marijuana businesses have largely been given the cold shoulder by banks and credit unions, leaving them holding literal bags of cash.
This is the first time that the House has passed standalone marijuana legislation. Rep. Ed Perlmutter (D-CO) sponsored the SAFE Banking Act, and it passed with a vote of 321-103. All but one Democrat and 91 Republicans voted in favor of the bill, giving it broad bipartisan support.
USDA releases draft hemp regulations
In October, the U.S. Department of Agriculture (USDA) released draft rules for hemp regulation.
The USDA drafted the regulations as a result of the 2018 Farm Bill that descheduled and legalized hemp. Under the draft rules, the THC content must be under 0.3%, and any “hot” hemp found to exceed that amount would be destroyed.
Not everyone is happy with the proposed rules. Hemp farmers say that the USDA regulations will make producing high-quality CBD that doesn’t exceed THC limits impossible.
Colorado cannabis sales generate $1 billion in tax revenue
Since recreational marijuana sales began in Colorado in 2014, the state has collected $1.02 billion in tax revenue, according to the latest numbers released by the Colorado Department of Revenue. Adult-use cannabis sales in the last five years have exceeded $6.56 billion. Legal cannabis has created jobs for 41,076 people who work in the industry, and there are currently 2,917 licensed marijuana businesses in the state.
Cannabis sales in Colorado have begun to level out, in part due to a decline in medical marijuana sales. In 2018, recreational marijuana sales were up 11%, but medical cannabis sales were down 20%.
End of marijuana prohibition gains traction in Congress
The House Judiciary Committee approved the Marijuana Opportunity Reinvestment and Expungement (MORE) ACT in November. The bill would deschedule cannabis, expunge marijuana convictions, and create reinvestment programs in communities most impacted by the war on drugs.
“This will remove a stain on people’s record but really a stain on the United States of America,” said Rep. Steve Cohen (D-TN).
Some key elements of the MORE Act include:
- Remove cannabis from the list of federally controlled substances
- Require federal courts to expunge past marijuana convictions and criminal records
- Allow states to set their own marijuana policy
- A 5 percent federal tax on marijuana would fund programs that provide job training, legal assistance, treatment for substance abuse, and provide loans for cannabis businesses owned by people who are socially or economically disadvantaged
- Create the Cannabis Justice Office within the Department of Justice
- Prevent federal agencies from denying public benefits or security clearances because of marijuana use
- Prohibit denying citizenship to immigrants based on a marijuana conviction
Additionally, removing cannabis from the Controlled Substances Act would allow veterans access to medical marijuana through the Department of Veterans Affairs (VA).
While the bill is likely to pass in the House, its future is less certain in the Senate.
Illinois becomes 11th state to legalize cannabis
Jan. 1, 2020, will mark the beginning of more than just a new decade in Illinois as the state’s first recreational marijuana dispensaries are set to open on New Year’s Day.
Illinois was the first state to legalize recreational marijuana through the state legislature rather than through a voter-approved ballot initiative.
In June, Gov. J.B. Pritzker (D) signed a bill that allows adults 21 and older to possess and purchase cannabis. In addition to legalizing adult-use cannabis, the new law includes provisions to expunging prior marijuana convictions and the creation of social equity programs.
Recreational flower, edibles, and infused products will have a graduated tax rate according to the THC content.
Michigan first Midwest state to legalize adult-use marijuana
On Dec. 1, Michigan became the first state in the Midwest to allow recreational marijuana sales. Adults 21 and older can purchase up to 2.5 ounces of flower, including up to 15 grams of concentrate.
Michigan voters approved Proposal 1 to legalize adult-use marijuana in 2018. Sales were originally slated to begin Jan. 1, 2020, but the state moved up the date in an effort to reduce black market sales. Detroit has delayed recreational sales until Jan. 31.
On the first day of sales, the state’s three licensed retail marijuana shops generated more than $200,000 in cannabis sales and an estimated $36,000 in tax revenue.
Marijuana Industry Daily projected that marijuana sales in Michigan are expected to reach $1.4 billion to $1.7 billion per year when the market reaches maturity.
Last week the House of Representatives passed the Secure and Fair (SAFE) Banking Act of 2019, which could finally make access to banking and financial institutions a reality for the cannabis industry.
The SAFE Banking Act would protect banks that work with the cannabis industry from being penalized or from violating federal anti-money laundering and illicit finance laws. For years the cannabis industry has struggled to gain access to even the most basic banking services.
“We applaud the House for approving this bipartisan solution to the cannabis banking problem, and we hope the Senate will move quickly to do the same,” said Neal Levine, chief executive officer of the Cannabis Trade Federation, which lobbied in support of the bill.
“This vital legislation will have an immediate and positive impact, not only on the state-legal cannabis industry but also on the many communities across the nation that have opted to embrace the regulation of cannabis. Allowing lawful cannabis companies to access commercial banking services and end their reliance on cash will greatly improve public safety, increase transparency, and promote regulatory compliance.”
This is the first time that the House of Representatives has passed standalone marijuana legislation. Rep. Ed Perlmutter (D-CO) sponsored the SAFE Banking Act, and it passed with a vote of 321-103. All but one Democrat and 91 Republicans voted in favor of the bill, giving it broad bipartisan support.
The bill still needs to pass in the Senate, and it’s unknown if or when Senate Majority Leader Mitch McConnell (R-KY) will call it to a vote. Senate Banking Committee Chairman Mike Crapo (R-ID) said that he wants to vote on cannabis banking legislation by the end of the year.
Despite being a multibillion-dollar industry, marijuana businesses have largely been given the cold shoulder by banks and credit unions, leaving them holding literal bags of cash.
“If someone wants to oppose the legalization of marijuana, that’s their prerogative, but American voters have spoken and continue to speak, and the fact is you can’t put the genie back in the bottle. Prohibition is over,” Perlmutter said while speaking in support of the legislation. “Our bill is focused solely on taking cash off the streets and making our communities safe, and only Congress can take these steps to provide this certainty for businesses, employees and financial institutions across the country.”
While some cannabis advocates and legislators see the bipartisan support for the SAFE Banking Act as a step closer to federally legalizing cannabis, others would prefer comprehensive cannabis legislation that includes social and criminal justice reform.
“I am proud to bring this legislation to the Floor, but I believe it does not go far enough,” House Judiciary Chairman Jerrold Nadler (D-NY) said. “This must be a first step toward the decriminalization and de-scheduling of marijuana, which has led to the prosecution and incarceration of far too many of our fellow Americans for possession.”
Beginning Oct. 1, Hawaii will be the first state in the U.S. to require cashless-only cannabis sales.
A Colorado-based credit union will permit dispensaries in Hawaii to open bank accounts, and a debit app called CanPay will enable patients to purchase cannabis with their smartphones. The app is currently in use in six states, but Hawaii will be the first to use it exclusively for medical marijuana transactions.
Because marijuana is still illegal under federal law, most banks and credit card companies refuse to work with cannabis industry. As a result, marijuana businesses are forced into cash-only transactions, making day-to-day operations tedious and putting dispensaries and employees at risk for robberies and other crime.
To put the amount of cash floating around the marijuana market in perspective, consider that Colorado consistently makes $100 million in pot sales every month (with California expected to dwarf that number)–that’s a lot of physical money, and most businesses don’t to have anywhere to put it.
Having access to banking is a big deal in the cannabis industry–and widespread access probably won’t happen until Congress decides to deschedule marijuana.
Hawaii was one of the first states to legalize medical marijuana in 2000, but dispensaries weren’t legalized until 2015.
The state Department of Health delayed the roll-out of medical marijuana until this year because the state didn’t have a certified lab–putting dispensaries in the unenviable position of growing and harvesting plants that they weren’t allowed to sell.
So far, there are eight licensed dispensaries in the state: Three on Oahu, two on Hawaii Island and two on Maui. The state’s first two medical marijuana dispensaries opened last month.
Denver-based credit union, Fourth Corner, has another shot at bringing banking to the cannabis industry. Since the beginning, banking has always been an issue for cannabis businesses since cannabis is still federally illegal, but this marks a small step forward in progress.
Fourth Corner opened in 2014, the same year recreational weed sales became legal in Colorado. The state gave the credit union a charter, but they were denied a master account from the Federal Reserve–something they need for basic banking transactions.
The credit union challenged the denial but a district court upheld the it, dismissing the case with prejudice in January 2016. The U.S. District judge overseeing the case ruled that granting access to the Federal Reserve would “facilitate criminal activity.”
Fourth Corner again appealed the decision, and this month they met with success when the U.S. Court of Appeals for the Tenth Circuit vacated the 2016 ruling. The ruling means that the credit union can submit a new application to the Federal Reserve Bank of Kansas City.
Mark Goldfogel, the executive vice president of industry relations for Fourth Corner, said, “That really is, at its core, the same question: Does a cannabis- or marijuana-related business have rights to normal business protections and legal protections? And that’s changing literally right in front of us.”
The 10 Circuit’s ruling did come with a caveat, however: Fourth Corner’s member base would be limited to marijuana industry supporters such as nonprofits and advocates as long as marijuana remained illegal on the federal level.
Deirdra O’Gorman, Fourth Corner’s chief executive officer, said, “This really wasn’t a huge change to our business plan,” she said. “Our ultimate goal is to give these directly licensed businesses legitimate (banking services).” She added that Fourth Corner would be reapplying for a master account “sooner rather than later.”
However, even if the credit union is approved for a master account from the Federal Reserve, they still have the additional hurdle of obtaining insurance from the National Credit Union Administration. Fourth Corner’s application to the federal regulator of credit unions also met with denial in January 2016.
The uneasy relationship between cannabis and the banking industry could improve if Illinois State Treasurer Michael Frerichs has anything to do with it.
Frerichs issued a press release Monday, urging the Trump administration to give clear guidance to financial institutions regarding medical marijuana. In his letter, he urged President Trump to reassure banks that they will not face penalties or prosecution for doing business with state-licensed marijuana growers and dispensaries.
“Medical marijuana is not right for everyone. However, its positive results for those with debilitating conditions, including Veterans and children threatened by seizures, are undeniable,” Frerichs said. “Updating our banking laws to embrace commonsense change will allow Illinois to properly manage this reasonable program, guarantee uninterrupted access to medical users, and protect financial institutions that serve the industry.”
The nomination of Jeff Sessions as attorney general has marijuana advocates unsure if he’ll reverse President Obama’s directive not to enforce federal marijuana laws. Federal law prohibits banks from processing money from the legal marijuana industry, making day-to-day transactions difficult. Most dispensaries work on a cash-only basis, and business owners have difficulty opening checking accounts and securing loans. The current system also makes it difficult for states to audit sales, verify taxes are collected, and encourages a gray market and criminal activity.
Lack of access to banking has been a thorn in the side of the legal marijuana industry since its inception. Even ancillary cannabis businesses have difficulty accessing banking services to send or receive payment. Frerichs press release notes that “most refuse to provide banking services to those in the medical marijuana industry while smaller community banks do so with great trepidation. The lack of full engagement hobbles the industry despite the availability of marijuana in 27 states.” Currently, marijuana is still considered a Schedule I drug under federal law.