Legislation Would Protect Cannabis in Legal States, Enable Banking | Marijuana

Legislation Would Protect Cannabis in Legal States, Enable Banking


A bipartisan group of Washington, DC, lawmakers have joined forces to protect cannabis industries in states where it’s been made legal from the federal government.

Sens. Cory Gardner, a Colorado Republican, and Elizabeth Warren, a Massachusetts Democrat, introduced the Strengthening the 10th Amendment Through Entrusting States Act on Thursday, June 7, 2018.

The STATES Act is intended to protect states where cannabis has been legalized from federal interference by amending the Controlled Substances Act (CSA) so that as long as states comply with a few basic protections, the CSA provisions no longer apply to people acting in compliance with state laws relating to marijuana activities.

A companion bill in the House was also introduced by Ohio Republican Rep. David Joyce and Oregon Democratic Rep. Earl Blumenauer.

The STATES Act got a boost on Friday, June 8, 2018, when President Donald Trump said he likely would back the measure.

“I support Senator Gardner,” Trump said in response from a question from the White House press pool. “I know exactly what he’s doing. We’re looking at it, but I probably will end up supporting that, yes.”

Gardner, whose state along with Washington in 2012 became the first two US states to legalize recreational cannabis, said the federal government has been “closing its eyes and plugging its ears” while 46 states have acted on marijuana.

“In 2012, Coloradans legalized marijuana at the ballot box and the state created an apparatus to regulate the legal marijuana industry,” Gardner said in a statement. “But because of the one-size-fits-all federal prohibition, state decisions like this put Colorado and other states at odds with the federal government.”

The bill states that compliant transactions are not trafficking and do not result in proceeds of an unlawful transaction, which would enable marijuana-related businesses to deposit cash, open checking accounts and get loans from banks.

Other provisions of the bill include:

  •       Removings industrial hemp from the list of controlled substances under the CSA
  •       Prohibiting the endangerment of human life while manufacturing marijuana
  •       Prohibiting employment of anyone younger than 18 in marijuana operations
  •       Prohibiting the distribution of marijuana at transportation safety facilities, such as rest areas and truck stops
  •       Prohibiting the distribution or sale of marijuana to anyone younger than 21, except for medical purposes

The STATES Act specifically reinforces the 10th Amendment to the U.S. Constitution, which expresses the principle of states’ rights. The 10th Amendment states: “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.”

“What it says is that Iowa can be Iowa, and Florida can be Florida, and Washington state can be Washington state,” explained Saphira Galoob of The Liaison Group, a Washington, D.C.-based lobbyist focused on federal legislation and policy affecting the cannabis industry.

Not only does the bill have lawmakers from both parties supporting it, but the House bill with parity language further demonstrates support.

“For them to join forces on this is really a statement of how broad the support is,” Galoob said.

The legislation has already been endorsed by organizations including the American Civil Liberties Union, Americans for Safe Access, Americans for Tax Reform, the Drug Policy Alliance, the National Cannabis Industry Association and the National Conference of State Legislatures.

Both Gardner and Warren have opposed a move by US Attorney General Jeff Sessions to reverse the federal government’s permissive stance toward states where marijuana is legal.

Warren has stated her desire to improve access to banking for marijuana businesses. Gardner earlier this year promised to put holds on all nominees for Sessions’ Justice Department.

Galoob believes that may have paved the way for the STATES Act.

“That’s when the seeds started to take root,” Galoob said.

About Author

Don Jergler is the Regional West Editor for Insurance Journal and a veteran business and real estate reporter. He has contributed coverage for the Long Beach Press Telegram, Long Beach Register, Los Angeles Times Custom Publishing and a variety of trade publications.

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