Cannabis new briefs: Illinois Gov. signs recreational bill, House passes banking bill, Oregon lays groundwork for exporting pot, and more

Illinois recreational marijuana bill signed by Gov. Pritzker

By now the ink has dried on Illinois Gov. J.B. Pritzker’s signature on the state’s newborn Cannabis Regulation and Tax Act. Illinois has officially become the 11th state in the U.S. to legalize the recreational use of marijuana by adults age 21 and over, and only the second state to do so via an act of the legislature after Vermont broke the ice last year. 

Moreover, the new measures call for expunging nearly 800,000 marijuana convictions from criminal records and creates a "social equity program" intended to assist residents with marijuana convictions in getting business licenses. 

[In a federal first, the House has passed legislation to permanently protect state-sanctioned marijuana operations]

With recreational sales beginning in less than 6 months, existing medical marijuana growers and dispensaries are gearing up to meet the expected explosion in demand. Before the bill was signed, the state counted 55 medical marijuana dispensaries. Those operations are being offered the opportunity to sell recreational marijuana and also to open a second location resulting in more than 100 dispensaries selling marijuana when recreational sales launch at the beginning of 2020. That number will eventually be raised to 200. 

The new measures do not replace Illinois’ medical marijuana market. In fact, the freshly signed recreational marijuana bill is written in such a way as to ensure that patients enrolled in the medical program take priority over recreational customers. Dispensaries will be required to maintain stocks sufficient to meet the needs of their medical customers before they can begin selling additional product to recreational customers.

Illinois is expected to produce one of the largest marijuana markets in the country. According to Chicago-based cannabis research firm Brightfield Group, sales are projected to reach $22.7 billion by 2023 with more than two-thirds of that amount coming from recreational sales.

Legal pot sales are slated to begin in Illinois on Jan. 1, 2020.

House passes banking bill

A bill which includes language removing federal restrictions on banks that do business with cannabis operations was signed by the House of Representatives last week. The bill authorizes the use, distribution, possession, and cultivation of marijuana as long as it is allowed by the state in which it takes place. The provision, which was inserted as an amendment to the Commerce, Justice, Science, and Related Agencies Appropriations Bill, does not differentiate between medical and recreational programs. In the past, some federal measures, such as the Rohrabacher–Farr Amendment, only covered states with medical programs. 

This is the first time Congress has ever proposed legislation to protect states with recreational marijuana programs. The latest attempt to prevent federal interference was sponsored by representatives Earl Blumenauer (D-Oregon), Tom McClintock (R-California), and Eleanor Holmes Norton. It is being called the Blumenauer-McClintock-Norton Amendment. The measure was passed by a vote of 267 to 165.

Read more on this development here.

Oregon passes marijuana export legislation

Oregon Gov. Kate Brown has signed a bill allowing the import and export of marijuana to and from other U.S. states where the drug is legal — that is if and when the federal government gives the green light. The bill was just one of three pieces of marijuana legislation signed by the governor in the past week, including a bill to expunge low-level cannabis convictions. The policy is part of an attempt to figure out how to handle the state’s massive surplus of marijuana.

[Oregon lawmaker to propose interstate cannabis commerce rules]

Under the new legislation, the governor will have the authority to cut deals with neighboring states where marijuana is legal. The bill does not allow for air or sea transportation of marijuana, so all deals will have to be made with states that are accessible by highways. At this time California, Nevada, and Washington are the only three states that fit the bill.

Wyden and McConnell ask FDA to speed up CBD ruling

Senator Ron Wyden has called the Food and Drug Administration’s assertion that it could take up to five years to develop rules for adding hemp-derived CBD to foods “fully unacceptable.” In his letter to the head of the FDA and the U.S. Department of Health and Human Services (HHS), Wyden urged the FDA to streamline the regulatory process for CBD and expedite a ruling. Before he left office, former FDA Commissioner Scott Gottlieb suggested that speeding up the development of rules for CBD might take an act of Congress.

Also, Senate Majority Leader Mitch McConnell (R-KY) sat down with the head of the Food and Drug Administration (FDA) last week for the same purpose. It was McConnell who penned the hemp legalization provision included in the 2018 Farm Bill. In a press release on the topic, McConnell claimed that while the 2018 Farm Bill included his provision to remove hemp and CBD from the list of controlled substances, “CBD food and dietary supplement products remain in a gray area without clarification from the FDA.” 

American Bankers Association asks for clarification on hemp and CBD

The American Bankers Association has sent a letter to federal financial regulators asking for additional guidance on banking services for hemp businesses. Recipients of the letter include the Federal Reserve, the Federal Deposit Insurance Corporation (FDIC), the Treasury’s Comptroller of the Currency, and Financial Crimes Enforcement Network (FinCEN). 

According to ABA Executive Vice President Virginia O’Neill, “banks remain uncertain about the degree to which they can serve hemp-related companies, and the compliance and reporting requirements that such relationships require.”

“Although other federal regulators have issued helpful clarifications regarding hemp production, banks are subject to a complex set of legal requirements and regulatory expectations and require specific guidance to ensure they are acting appropriately. Furthermore, the unique nature of hemp as a low-THC strain of marijuana, which remains a Schedule I substance under the [Controlled Substances Act], means banks must have a reliable mechanism to distinguish legal hemp from federally illegal marijuana with extreme confidence.” — ABA Executive Vice President Virginia O’Neill

New Mexico governor forms a working committee on legal marijuana

New Mexico Governor Michelle Lujan Grisham (D) has announced the formation of a working group to study possible strategies for legalizing marijuana. In an official press release, the governor said that she “will place the matter of legalization on her call for the Second Session of the 54th Legislature, a 30-day session which will begin January 2020.″

[New Jersey’s cannabis legalization vote falls apart at the eleventh hour]

The Cannabis Legalization Working Group will be comprised of lawmakers, industry stakeholders, and law enforcement officials, and will be headed by Albuquerque City Councilor Pat Davis. The group is being tasked with studying cannabis laws initiated by other U.S. states. It is the governor’s hope that New Mexico’s program would become a model for other states for the successful legalization of marijuana.

“This group will ensure we begin the next session with a credible, equitable, and cohesive legalization proposal that will incorporate all public safety concerns, workplace regulations, labeling requirements that protect underage children, and all manner of other issues. There are open questions about how legalization can work best for New Mexico. This group will answer those questions, and we will arrive at the next session prepared.” — New Mexico Governor Michelle Lujan Grisham

The National Sheriffs’ Association calls for rescheduling of marijuana

The National Sheriffs’ Association published a resolution last week calling for the federal rescheduling of marijuana. The policy has been adopted, according to the group, out of “compassion for those who are suffering from debilitating illnesses.” However, the resolution also reiterates the group’s anti-recreational use stance stating that the NSA considers legalization a threat to public health and safety. The letter also points out that legalization efforts have not been successful at eradicating black market sales and “have oftentimes resulted in more organized drug trafficking organizations.”

Lawmakers propose clemency for 17,000 federal prisoners

Representative Steve Cohen (D-TN) has penned a letter to Donald Trump asking that the president commute the sentences of about 16,000 non-violent drug offenders currently being held in federal prisons.

In the letter, Cohen pointed to Trump’s granting of clemency to Alice Johnson who was serving a life sentence for drug trafficking, claiming that absolving Johnson of the crime was “the right thing to do” and that thousands of other federal prisoners “deserve the same relief.” Johnson’s plight was brought to the president’s attention by actress Kim Kardashian.

[Illinois State Senate moving legalization bill forward]

“Beyond the question of righting an injustice, commutation would relieve taxpayers of the cost of unnecessary incarceration,” Cohen wrote. “These non-violent drug offenders should be released based on their records, not on celebrity endorsements.”

A plan to reduce mass incarceration and offer clemency to more than 17,000 federal prisoners serving time for non-violent drug offenses was unveiled by New Jersey Senator Cory Booker last week. Booker’s mission with the “Restoring Justice Initiative” is to free federal prisoners “serving unjust and excessive sentences.”

Booker, a 2020 presidential candidate, says he would use his executive powers to make it so on the first day of his presidency. The New York Times called the proposed measures the “broadest clemency initiative since the Civil War.”

Former President Barack Obama commuted sentences of 1,715 federal inmates, primarily non-violent drug offenders.

Read more here.

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