STATES Act Re-emerges In New Congress

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The Strengthening the Tenth Amendment Through Entrusting States Act was last year’s cannabis reform darling, drawing across-the-board support from social justice reformers and industry groups alike.

House members and Senator Cory Gardner reintroduced the STATES Act Thursday at a small press conference outside the US Capitol. The STATES Act is a proposal that would prevent federal interference in the state-legal cannabis industry — but wouldn’t change federal law elsewhere in the US and doesn’t have a clear criminal justice reform component.

Senator Elizabeth Warren, a Massachussets Democrat, who is running for president and vocal about a more progressive version of cannabis reform, was notably absent.

Last year, Warren and Gardner, a Colorado Republican, believed they had found conservative wrapping for cannabis reform by advocating a states’ rights approach that would appeal to a GOP-controlled Congress and President Donald Trump.

Since that heralded introduction, things have changed. Several Democratic members of Congress, including Warren, are running for president, and many of them are seeking to appeal to progressives by publicly emphasizing the social justice elements of cannabis reform.

The biggest questions facing STATES is whether the Act offers a vision of cannabis reform that will be supported by a majority of Democrats in Congress without more robust social justice elements.

And, even if a majority of House Democrats ultimately agree to pass STATES, will Senate Majority Leader Mitch McConnell (who opposes legalization) want to take up the issue when he and other GOP senators face a reelection campaign in 2020?

McConnell and Warren’s office didn’t respond to requests for comment Thursday.  

Democratic Representatives Earl Blumenauer (Oregon), Barbara Lee (California) and Joe Neguse (Colorado) joined Republican Representatives David Joyce (Ohio) and Matt Gaetz (Florida) alongside Gardner on Thursday in introducing and advocating for the passage of STATES. Lee, who has been supportive of broader cannabis reform, said at the press conference that Congress should act to help more people of color enter the cannabis industry, and that the STATES Act would help because the industry would have access to more loans and capital investment. (Still, it should be noted that the Act doesn’t have specific provisions for industry diversity and equity or criminal justice reforms.)

“Communities of color are being locked out of this industry,” Lee said. “We have the opportunity to make this the most equitable industry in the country. Right now less than 1% of the cannabis industry is owned and operated by people of color. We can do much better than that.”

Blumenauer, the chair of the Cannabis Caucus in Congress, struck an optimistic, bipartisan tone. “This is an opportunity for us to break the logjam,” he said.

Representative Ed Perlmutter, a Colorado Democrat, successfully ushered through a historic first for cannabis reform in Congress when the House Financial Services Committee voted 45 to 15 to advance the SAFE Banking Act last week, sending it to the full House for consideration. The Act seeks to solve the cannabis industry’s cash-heavy status quo, which has made it a target for criminal activity, by providing legal protection from prosecution for banks and federally-regulated creditors that do business with state-legal cannabis businesses.

Perlmutter told Cannabis Wire in an interview earlier this week that Bluemeanuer is the “quarterback” of organizing the myriad cannabis reform bills that have been introduced. One of the toughest logistical issues is scheduling hearings involving the House Judiciary Committee, which is in the glaring spotlight of the recently-concluded special counsel’s investigation into President Trump’s campaign and allegations of foreign interference.

“That committee is pretty overwhelmed,” Perlmutter said. “They’re dealing with a dozen different pressing problems.”

Still, he said, he believes hearings will be scheduled and there’s a good chance for reform this year, with the SAFE Banking Act having the most early momentum. He said a growing bipartisan group now understands the gravity of the issues surrounding cannabis. “It’s no longer, ‘ah that’s silly,’” Perlmutter said. “People are taking this seriously. They understand it’s a serious question that has to be addressed.”

Representatives Doug Collins, the top Republican member on the Judiciary Committee, and Gaetz, sent a letter to Judiciary Chairman Jerry Nadler urging him to schedule a hearing on the STATES Act.

Gaetz said the Judiciary Committee shouldn’t be slowed down by its Trump-related investigations. “While it may seem that topics like the Mueller investigation are all-consuming, the House continue to hold committee hearings and votes on a wide array of topics every single day,” Gaetz said in an email to Cannabis Wire. “I believe the House will not fail to act on it.” A Nadler spokesperson didn’t respond to a request for comment.

At the SAFE Banking Act hearing last week, Finance Committee Chairwoman Representative Maxine Waters, D-California, said that Act would be passed by the House as part of a package of legislation that would address “racial and social inequities.”

It’s striking, then, that the two pieces of legislation that seem to have the most momentum in the new Congress are the SAFE and STATES Acts, both major priorities of industry trade groups.

In a three-part series last year, Cannabis Wire documented the rising dollars flowing toward Congress to push industry priorities through advocacy and lobbying. The STATES Act and more specific financial reforms, like banking, were at the top of the list. Now there’s yet another new industry group, the National Cannabis Roundtable, led by former House Speaker John Boehner, which has hired several lobbyists to push for these very priorities.

The industry drum beat behind those bills and bipartisan backing means efforts such as the Marijuana Justice Act don’t have the same early momentum in Congress. The measure is spearheaded by Democratic Senator Cory Booker, who is also running for president. If passed, the bill would remove cannabis from the Controlled Substances Act and expunge past cannabis convictions, deny certain federal funds to states that do not legalize cannabis, and set up a community reinvestment fund for job training.

“It’s not enough to just legalize marijuana, we should help those with records for use and possession convictions, and allow people currently in prison for marijuana-related crimes to petition for resentencing, which is why my legislation includes expungement provisions,” Booker tweeted in February.

Blumenauer, who has been advocating for cannabis reform in Congress for decades, said at the press conference that he views the STATES Act as a part of the momentum needed to reform laws around cannabis.

“The introduction of the STATES Act is the next logical step building the momentum for the reform that we need,” he said. “We need to make sure the federal government does its job.”


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