In a sign that cannabis reform is now on the march at the highest level of international discussion, the World Health Organization (WHO) will be meeting in November to formally review its policies on cannabis. This will be the second time in a year that the organization has met to review its policies on the plant, with a direct knock-on effect at the UN level.
According to documents obtained by Cannabis Industry Journal, including a personal cover letter over the committee’s findings submitted to the Secretary-General Antonio Guterres by Dr. Tedros Adhanom Ghebreyesus, Director-General of the WHO, the November review will “undertake a critical review of the…cannabis plant and resin; extracts and tinctures of cannabis.”
What Exactly Will The WHO Review?
The November meeting will follow up on the work done this summer in June – namely to review CBD. According to these recommendations, the fortieth meeting of the Expert Committee on Drug Dependence (ECDD) in Geneva will include the following:
Pure CBD should not be scheduled within International Drug Control Conventions.
Cannabis plant and resin, extracts and tinctures of cannabis, Delta-9-THC and isomers of THC will all be reviewed in November.
Finally, and most cheeringly, the committee concluded that “there is sufficient information to progress Delta-9-THC to a critical review…to address the appropriateness of its placement within the Conventions.” In other words, rescheduling.
Industry and Patient Impact
Translation beyond the diplomatic niceties?
The drug war may, finally, and at a level not seen for more than a century, come to a close internationally, on cannabis.
Here is why: The WHO is effectively examining both the addictive impact and “harm” of the entire plant, by cannabinoid, while admitting, already that current scheduling is inappropriate. And further should not apply to CBD.
This also means that come November, the committee, which has vast sway on the actions of the UN when it comes to drug policy, is already in the CBD camp. And will finally, it is suspected, place other cannabinoids within a global rescheduling scheme. AKA removing any justification for sovereign laws, as in the U.S., claiming that any part of cannabis is a “Schedule I” drug.
What this means, in other words, in effect, is that as of November, the UN will have evidence that its current drug scheduling of cannabis, at the international level, is not only outdated, but needs a 21stcentury reboot.
International Implications
From a calendar perspective, in what will be Canada’s first recreational month, Britain’s first medical one and presumably the one in that the German government will finally accept its second round of cultivation bids, the world’s top regulatory body will agree with them.
This also means that as of November, globally, the current American federal justifications and laws for keeping cannabis a Schedule I drug, and based on the same, will have no international legal or scientific legitimacy or grounding.
Not that this has stopped destructive U.S. policies before. See global climate change. However, and this is the good news, it is far easier to lobby on cannabis reform locally than CO2 emissions far from home. See the other potentially earth-shaking event in November – namely the U.S. midterm elections.
The global industry, in other words, is about to get a shot in the arm, and in a way that has never happened before in the history of the plant.
And that is only good news for not only the industry, but consumers and patients alike.
Last month, the Cannabis Control Commission, the regulatory body overseeing Massachusetts’ newest industry, finalized their regulations for the market. At the beginning of this month, the state began accepting applications for business licenses. Now with the full implementation of adult-use sales on the horizon, businesses, regulators, consumers and local governments are preparing themselves for the legalization of adult-use cannabis. Sales are expected to begin June 1st.
On March 29th, the Cannabis Control Commission announced their finalized rules were filed, published and took effect. Leading up to the filing, the Commission reports they held 10 listening sessions, received roughly 500 public comments and conducted 7 hearings for roughly 150 policy decisions. The license categories that businesses can apply for include cultivator, craft marijuana cooperative, microbusiness, product manufacturer, independent testing laboratory, storefront retailer, third-party transporter, existing licensee transporter, and research facility, according to the press release.
What separates Massachusetts’ rules from other states’ rules are a few of the license categories as well as environmental regulations, as Kris Kane highlights in this Forbes article. Experimental policies, like the microbusiness and craft marijuana co-op licenses, Kane says, are some tactics the Commission hopes may help those affected by the drug war and those who don’t have the capital and funding required for the larger license types.This is a groundbreaking reform previously unseen in states that have legalized cannabis.
The Commission will also establish a Social Equity Program, as outlined in the final rules (section 17 of 500.105). That program is designed to help those who have been arrested of a cannabis-related crime previously or lived in a neighborhood adversely affected by the drug war. “The committee makes specific recommendations as to the use of community reinvestment funds in the areas of programming, restorative justice, jail diversion, workforce development, industry-specific technical assistance, and mentoring services, in areas of disproportionate impact,” reads one excerpt from the rules (section 500.002) identifying the need for a Citizen Review Committee, which advises on the implementation of that Social Equity Program.
This is a groundbreaking reform previously unseen in states that have legalized cannabis. Massachusetts may very well be the first state to actively help victims of the prohibition of cannabis.Some municipalities are hesitant and skeptical, while others are fully embracing the new industry with open arms.
For environmental rules, Kane notes the Commission is taking unprecedented steps to address energy usage in the cultivation process, pushing the industry to think about environmental sustainability in their bottom line and as part of their routine regulatory compliance. He says the Commission mandates a 36 watts-per-square-foot maximum for indoor cannabis cultivators.
On Monday, April 2nd the state began accepting applications for businesses seeking licensure. Within a few days, nearly 200 businesses have applied. That number is expected to grow significantly over the next few weeks.
While businesses continue applying for licenses, local governments are preparing in their own way. Some municipalities are hesitant and skeptical, while others are fully embracing the new industry with open arms.
A couple weeks ago, the City Council of Springfield, Massachusetts passed a six-month moratorium on cannabis sales, citing the need for more time to draft local regulations for businesses first. “I believe the moratorium is in place to make sure that we get it right the first time,” Councilor Adam Gomez, chairman of the council’s Economic Development Committee told MassLive. “We don’t have a chance to get it right the second time. The residents of Springfield supported this.” There are also talks of a potential temporary ban in Truro, MA.
Meanwhile in the city of Attleboro, ABC6 News reports Mayor Paul Heroux is “working to make his city marijuana friendly as city councilors work to draft regulation ordinances.” In Peabody, two businesses just received approval to begin operating as medical dispensaries.
To round out our federal reform review, we look at the bills introduced into the 115th Congress that attempt to resolve the banking and taxation problems faced by state-legal cannabis businesses. As this is perhaps the biggest thorn in the side of the cannabis industry, any movement by the feds on these issues will be welcomed. As it turns out, there are four proposals currently pending for fixing the broken cannabis financial services system, with each proposal comprising a pair of House-Senate companion bills. We look at each pair in turn.
Group 1
S. 1156 – SAFE Act; or, Secure and Fair Enforcement Banking Act
Policy: These SAFE Acts would prohibit federal prosecutors and federal regulators from preventing or disciplining in any way a depository institution simply because that depository institution serviced a cannabis-related business.
Impact: The impact of these bills would be widespread for both the cannabis industry and for financial service institutions looking to capitalize on the cannabis industry. For banks, the bills would remove all of the barrier-risks that are now keeping them out of the cannabis business. Currently, the feds have handed down policy guidance to banks stating that as long as they submit what are called “Suspicious Activity Reports, or “SARs” for cannabis-related accounts, and conduct their due diligence to ensure such accounts are complying with state law, then those banks will not be pursued by federal law enforcement. The problem with this guidance is that it is only policy, it is not law, and so it can change on as little as an administrative whim. The protection from cannabis business risk, most banks have determined, is therefore temporary at best and illusory at worst. Passage of the SAFE Act would instantly change all of that and initiate a banking bonanza. Banks will be racing to profit off of what is amounting to a newly minted billion dollar industry. Cannabis businesses will benefit greatly from all of this. Not only will they be able to stop operating strictly in cash and have access to all the traditional financial services that other businesses heavily rely on, but they will also be the beneficiaries of a highly competitive, and therefore affordable and efficient, cannabis banking market.
Procedural Status:
S. 1156
Introduced: May 17, 2017 by Senator Jeff Merkley (D-OR)
Senator Jeff Merkley (D-OR) Image: Medill DC, Flickr
Introduced: April 27, 2017 by Representative Ed Perlmutter (D-CO)
Cosponsors: 7 Republicans, 44 Democrats
Referred to House Committees on:
Judiciary
Subcommittee on Crime, Terrorism, Homeland Security, and Investigations
Financial Services
Group 2
S777 – Small Business Tax Equity Act of 2017
HR 1810 – Small Business Tax Equity Act of 2017
Policy: These bills would carve out an exception to IRC 280E allowing cannabis businesses to deduct ordinary business expenses from their federally taxable revenues.
Impact: If enacted these bills will dramatically ease the tax burden for cannabis businesses. Currently, even when they are in perfect compliance with state law, cannabis businesses are not permitted to deduct ordinary business expenses. This means that net taxable revenues are, and are going to continue to be, substantially higher than net taxable revenues for businesses in any other industry. If enacted, profit margins—and therefore product quality, operational efficiency and innovation—are going to uptick across all states that have legalized.
Procedural Status:
Senator Ron Wyden (D-OR) Image: JD Lasica, Flickr
S. 777
Introduced: March 30, 2017 by Senator Ron Wyden (D-OR)
Cosponsors: 1 Republican, 4 Democrats
Referred to Senate Committee on:
Finance
HR. 1810
Introduced: March 30, 2017 by Representative Carlos Curbelo (R-FL)
Cosponsors: 10 Republicans, 24 Democrats
Referred to House Committee on:
Ways and Means
Group 3
S. 780 – Responsibly Addressing the Marijuana Policy Gap Act of 2017
HR. 1824 – Responsibly Addressing the Marijuana Policy Gap Act of 2017
Policy: These bills combine to accomplish what each of the foregoing pairs accomplish separately. IRC 280E would no longer apply to state-legal cannabis businesses, and banking would become available for them as well. Additionally, advertising prohibitions in the CSA and the Communications act of 1934 would be removed, with the one exception that advertisements inducing travel from a state where cannabis is not legal to a legal cannabis state would be prohibited. Under Title II of the acts, barriers to federal bankruptcy proceedings would be removed. These bills would also reform the CSA as it relates to criminal liability for individuals, criminal record expungement and medical research for institutions, all of which are noteworthy but neither of which directly impact the legal cannabis industry.
Impact: For the impact of IRC reform, see “Impact” section under S.777/HR.180. For the impact of banking reform, see “Impact” section under S.1156/HR/2215.
By leaving advertising guidelines completely up to the states, we would probably witness the easing of advertising restrictions by the states. Currently, states have tight advertising rules because, after protecting consumers, they do not want their state’s legal cannabis industry to draw attention from the feds in any way. That concern would become moot and we could see more advertising in and across legalized states. This would drive competition across larger markets, in terms of both product and service quality and branding/marketing strategy.
Access to federal bankruptcy proceedings would clarify the landscape for all potential financial scenarios in the lifecycle of cannabis businesses, which in turn will ease uncertainty concerns of potential investors. The bankruptcy provision, combined with the banking provisions will undoubtedly open access to capital for cannabis businesses looking to grow operations and market presence.
Procedural Status:
S. 780
Introduced: March 30, 2017 by Senator Ron Wyden (D-OR)
Introduced: March 30, 2017 by Representative Earl Blumenaur (D-OR)
Cosponsors: 0 Republicans, 8 Democrats
Referred to House Committees on:
Judiciary
Crime, Terrorism, Homeland Security, and Investigations
Regulatory Reform, Commercial and Antitrust Law
Immigration and Border Security
Energy & Commerce
Health
Ways and Means
Financial Services
Natural Resources
Indian, Insular, and Alaskan Affairs
Education and the Workforce
Veterans’ Affairs
Health
Oversight and Government Reform
Group 4
S. 776 – Marijuana Revenue and Regulation Act
HR. 1823 – Marijuana Revenue and Regulation Act
Policy: Subchapters A and B of these bills would impose two additional federal tax requirements on cannabis businesses. The first would be an excise tax on all producers, beginning at a rate of 10%, and growing each year that a producer is in business to a cap of 25% at five years. The second tax would be an occupational tax of $1,000 per year, to be paid by the principals of any cannabis producer or warehouse proprietor. Significantly, these bills would also authorize the federal government to regulate operations in the industry.
Impact: The tax impact of these bills would be a straightforward additional tax that cannabis businesses would have to pay, on top of state and local taxes. The burden of additional taxes will inevitably impact profit margins, initial decisions on whether or not to enter the market and strategies for expansion and innovation. The impacts of federal authorization and regulatory requirements was discussed in the second article of the series, specifically under the “Impact” section of HR1841
Procedural Status:
S. 776
Introduced: March 30, 2017 by Senator Ron Wyden (D-OR)
Cosponsors: None
Referred to Senate Committee on:
Finance
HR. 1823
Introduced: March 30, 2017 by Representative Earl Blumenaur (D-OR)
This article continues the bill-by-bill review begun in the August 1st article on cannabis reform legislation proposed in the 115th Congress. In the next article and final piece in this series, we will examine the banking and tax reform bills related to cannabis.
Medical Cannabis Reform Bills
S. 1008 – Therapeutic Hemp Medical Act of 2017
HR. 2273 – Charlotte’s Web Medical Access Act of 2017
Policy: These bills would amend the CSA to end federal prohibition over all CBD products and all hemp plants with THC content levels of below 0.3%. In other words, people and businesses would be free to grow hemp and/or manufacture CBD products without any fear of federal prosecution. These products would most likely then fall under the regulation of other federal and/or state agencies, but the bills do not specify what agencies they might be or what controls might be put in place.
Impact: The impacts from these bills nationwide have the potential to be massive. Hemp is a plant that can be put to highly effective use in many different industries, from textiles and construction to foodstuffs and seafaring. The efficiency of its growth and the breadth of its utility will make it a highly valuable commodity and a competitor with many other raw materials. For state-legal cannabis businesses, the legalization of CBD and hemp at the federal level could fundamentally change the market for those products. States that legalized cannabis already have provisions in place dealing with hemp and CBD—sometimes alongside their cannabis laws, sometimes handled by a separate state agency—and they could either leave those as they are or open up those markets to interstate activity. In states that have not legalized, CBD and hemp are typically included in the state’s definition of cannabis, and therefore they will remain illegal under state law unless further action is taken. Most likely, if federal prohibition ends on hemp and CBD, state prohibition will follow suit. Because legalization at the federal level will allow for interstate commerce in hemp and CBD, expect the emergence of a nationwide market, driven by online sales and interstate marketing, and developing independently from a cannabis industry still constrained to in-state activities.
Procedural Status:
Senator Cory Gardner (R-CO) Photo: Gage Skidmore, Flickr
S. 1008
Introduced: May 2, 2017 by Senator Cory Gardner (R-CO)
Cosponsors: 7 Republican, 4 Democrat
Referred to Senate Committee on:
Judiciary
HR. 2273
Introduced: May 1, 2017 by Representative Scott Perry (R-PA)
Cosponsors: 10 Republicans, 10 Democrats
Referred to House Committee on:
Judiciary
Subcommittee on Crime, Terrorism, Homeland Security, and Investigations
Energy and Commerce
Subcommittee on Health
Financial Services
S. 1276 – Cannabidiol Research Expansion Act
Policy: This bill would accomplish two objectives: First, it would open channels for researchers to access and experiment with cannabis and cannabis extracts. Second, it would initiate the process at the end of which the Attorney General must make a determination as to which Schedule of the CSA is most appropriate for cannabidiol (CBD).
Impact: The impact on this legislation to state-legal cannabis businesses is rather remote—in both time and practice. The research access provisions will certainly create an uptick in medical and psychological research activity, the outcomes of which will add to our knowledge of how consuming cannabis in different forms and amounts effects the brain and body. This type of government-regulated research takes many years to process and complete, as both bureaucratic and scientific standards must be met. As for initiating the re/de-scheduling review process for CBD, this is a direct response to the 2016 denial by the DEA to re/de-schedule cannabis. That determination, published in the Federal Registrar on August 12, 2016, was made following a comprehensive study of the medical benefits and harms of cannabis conducted by the Department of Health and Human Services (HHS) and the Food and Drug Administration (FDA). Although such an in-depth study and its resulting negative determination pronounced so recently would normally rule out the chances of success for another re/de-scheduling attempt so soon after, the DEA did leave the door open with its statement that it “did not focus its evaluation on particular strains of marijuana or components or derivatives of marijuana.” It is just this door that S. 1276 seeks to exploit. By focusing the re/de-scheduling process on CBD specifically, the presumption is that the outcome of the scientific CBD studies would have a far better chance at satisfying the re/de-scheduling criteria set forth in the CSA. If such a determination was made, then the impact would come in two potential varieties. One, CBD would be rescheduled and become available for medical use according to FDA rules applicable to other prescription drugs. Two, CBD would be descheduled and would fall under the prerogative of the states, in which case the above analysis for S. 1008 and HR. 2273 would pertain.
Senator Dianne Feinstein (D-CA) Photo: Daniel Torok
Procedural Status:
S. 1276
Introduced: May 25, 2017 by Senator Dianne Feinstein (D-CA)
Cosponsors: 3 Republican, 2 Democrat
Referred to Senate Committee on:
Judiciary
S. 1374 – Compassionate Access, Research Expansion, and Respect States (CARERS) Act of 2017
HR. 2920 – Compassionate Access, Research Expansion, and Respect States (CARERS) Act of 2017
HR. 715 – Compassionate Access Act of 2017
HR. 714 – Legitimate Use of Medical Marijuana Act (LUMMA) of 2017
Policy: All four of these bills would make an exception to the CSA for state medical cannabis laws. Federal prohibition, in other words, would end for medical cannabis in those states that have legalized, and it would be left to those states to devise how it would be regulated. In states that have not legalized, both state and federal prohibition would remain. The companion CARERS Acts in the House and Senate, along with HR. 714, would also amend FDA rules to widen access to cannabis for research purposes.
Impact: The impact of these bills on the rules for state-legal medical cannabis businesses would be relatively minor in terms of functionality. This is so because they leave not only the determination to legalize up to the states, but they leave the design of the regulatory system up to the states as well. In other areas, however, big changes will be seen that benefit the industry: banking will open up for state medical businesses, and so will the opportunity to write-off ordinary business expenses. Investment risks over legality will end, making for easier access to capital. Questions about contract enforcement and risks of federal prosecution will become moot, and when state regulatory bodies make decisions on how to govern the industry, they will no longer have to concern themselves with U.S. DOJ enforcement and/or prosecutorial policies. Enactment of any of these bills would be a big win for medical cannabis.
Senator Cory Booker (D-NJ) Photo: David Shinbone, Flickr
Procedural Status:
S. 1374
Introduced: June 15, 2017 by Senator Cory Booker (D-NJ)
Cosponsors: None
Referred to Senate Committee on:
Judiciary
HR. 2920
Introduced: June 15, 2017 by Representative Steve Cohen (D-TN)
Cosponsors: 1 Republicans
Referred to House Committee on:
Judiciary
Subcommittee on Crime, Terrorism, Homeland Security, and Investigations
Energy and Commerce
Subcommittee on Health
Veterans’ Affairs
Subcommittee on Health
HR. 715
Introduced: January 27, 2017 by Representative Morgan H. Griffith (R-VA)
Cosponsors: 2 Republicans, 1 Democrat
Referred to House Committee on:
Energy and Commerce
Subcommittee on Health
Judiciary
Subcommittee on Crime, Terrorism, Homeland Security, and Investigations
HR. 714
Introduced: January 27, 2017 by Representative Morgan H. Griffith
Cosponsors: 1 Democrat
Referred to House Committee on:
Energy and Commerce
Subcommittee on Health
HR. 2020 – To Provide for the Rescheduling of Marijuana into Schedule III of the CSA
Policy: As its wordy title indicates, this bill would bypass the schedule review process and by legislative fiat move cannabis from Schedule I to Schedule III of the CSA.
Representative Matt Gaetz (R-FL)
Impact: Businesses handling drugs in Schedule III must register with the DEA and comply with DEA record keeping and security requirements. Doctors would be permitted to prescribe cannabis products. Importing/exporting will become available by permit, which would bring state businesses into competition with foreign cannabis firms. The biggest impact will be that cannabis sold pursuant to federal law will have to undergo the FDA’s New Drug Application process conducted by the Center for Drug Evaluation and Research, the largest of the FDA’s five centers. This includes clinical testing and a comprehensive chemical/pharmacological review. The drug would then be subject to FDA regulation for marketing and labelling. For states that wanted to maintain their legal medical cannabis systems, a conflict would remain because cannabis cultivators and dispensaries could operate in compliance with state law while simultaneously failing to meet new FDA and DEA requirements. States will then have a choice: bring state laws into line with federal laws, creating all of the advantages of federal legality discussed above, yet causing major disruptions to the industry; or retain the status quo, allowing the industry to grow as is with all of the in-state advantages but without the advantages of federal legalization. This all would of course leave behind recreational cannabis which would remain in the legal gray zone.
Introduced: April 4, 2017 by Representative Matt Gaetz (R-FL)
Cosponsors:
Referred to House Committee on:
Energy and Commerce
Subcommittee on Health
Judiciary
HR. 331 – States’ Medical Marijuana Property Right Protection Act
Policy: Section 881(a)(7) of the CSA subjects to federal forfeiture all property involved with cannabis activities. This bill would make an exception to that provision for all property in compliance with state medical cannabis laws.
Impact: Although not legalizing medical cannabis, this bill would be a strong step in the direction of legitimizing state-legal medical cannabis businesses. As a result of the property forfeiture clause of the CSA, two impediments faced by the medical cannabis industry is that investors are hesitant to invest and land lords are hesitant to lease or otherwise engage the medical cannabis market. By eliminating the risk of such property loss due to the federal-state conflict, this bill would have the very welcomed impact of easing access to capital and expanding opportunities for land use.
Introduced: January31, 2017 by Representative Barbara Lee (D-CA)
Cosponsors:
Referred to the House Committee on:
Judiciary
Subcommittee on Crime, Terrorism, Homeland Security, and Investigations
Recently Puerto Rico approved the law that regulates the production, manufacturing, dispensing and consumption of medical cannabis. Although medical cannabis was already “legal” through an executive order and was “supervised” by local regulation, there was no law to back up the industry and protect investors.
The creation and approval of laws resides in the hands of elected individuals. Expecting absolute knowledge is unrealistic, especially when we refer to cannabis as a medicine. Sadly, the lack of knowledge is affecting the patients, and an emerging industry that can be the solution to the Island’s current economic crisis.
I am in no way insinuating that Puerto Rico is the only example. I have seen this type of faulty thinking in many places, but cannabis is the perfect manifestation of this human defect. Check some of your laws, and you will find a few that nearly qualify for the same characterization.
As we can see, lack of knowledge can be dangerous. Objective, factual information needs to be shared, and our leaders need a formal education program. Patients need them to have a formal education program to better understand and regulate the drug.
The approval of this law is a significant step for the Island. Still, many Puerto Ricans are not happy with the result. The lack of legitimate information coupled with conservative views made the process an excruciating one. It took many hearings, lots of discussions and created tensions between the government and population, not because of the law, but for the reasons behind the proposed controls. Yes, it was finally approved, but with onerous restrictions that only serve as a detriment to the patient’s health, proving the need for an education program designed specifically to provide data as well as an in-depth scientific analysis of the information, then, you address the issue at hand.
Let’s take a look at some of the controls implemented and the justification for each one as stated by some members of the government.
Patients are not allowed to smoke the flower in its natural state unless it is a terminal patient, or a state-designated committee approves it. Why? Because the flower is not intended for medical use (just for recreational) and the risks associated with lung cancer are too high. Vaporize it.
It was proposed to ban edibles because the packaging makes it attractive for children. Edibles made it, but with the condition that the packaging is monochromatic (the use of one color), yes, insert rolling eyes here.
It only allows licensed pharmacists to dispense medical cannabis at the dispensary (bud tending). The rationale? Academic Background.
The new law requires a bona fide relationship between the doctor and the patient to be able to recommend medical cannabis, even if the doctor is qualified by the state and is a legitimate physician. This is contrary to their policy with other controlled substances, where a record is not required.
When there are different beliefs on a particular topic like it is with medical cannabis, you are not only dealing with the technical details of the subject; there is an emotional side to it too. Paradigms, stigma, stereotypes, beliefs and feelings affect the way we think. We let our judgment get in the way of common sense. When emotions, morals and previous knowledge are hurting objectivity, then we have to rely on scientific data and facts to issue resolution. However, when the conflict comes from opinions, we rely on common sense, and this one is scarce.
Now education: what can education do with beliefs, morals and emotional responses?
David Burns in his book “Feeling Good: The New Mood Therapy” discusses ten thinking errors that could explain, to those like me that want to believe this is a legitimate mistake, that there are cognitive distortions that affect the result of ours thoughts.
Now let’s analyze …
There are many things wrong with this prohibition. First, the flower is natural and organic. It is the easiest to produce and the cheapest alternative for patients; there are more than 500 compounds all interdependent to make sick people feel better. There are seas of data, anecdotal information, serious studies collecting information for decades and opinions of highly educated individuals that support the consumption of flower in its natural state for medical purposes. The benefits are discarded, and personal opinions take the lead. Based on Burns’s work this is a textbook case of Disqualifying the Positive: dismissing or ignoring any positive facts. Moreover, let’s not forget the benefit for illegal growers and distributors.
Keep out of reach of children, does it ring a bell? For years and years, we have consumed controlled substances, have manipulated detergent pods, bleach and so many other products that can be fatal. The warning is enough, just like is done with other hazardous Here we can notice how we can fall into the Fortune Teller Error, which believes that they know what will happen, without evidence.
Not even the largest drug stores in the USA have this requirement. There is one pharmacist per shift, and a licensed pharmacist supervises pharmacy technicians. Medical cannabis is not even mentioned in current Pharmacy’s BA curricula. Most pharmacists take external courses in training institutes. On the other hand, bud tenders go through a very comprehensive certification process that covers from customer service to cash management and safety and of course all technical knowledge. If anything, a botanist (plant scientist) makes more sense. What a splendid example of magnification (make small things much larger than they deserve). This is an unnecessary requirement.
The relationship between a certified doctor and patient has to be bona fide (real, honest). In practical terms, the doctor has to treat the patient for some time (sometimes six months) and have a history of the patient. Even though this sounds logical, not all doctors are certified to recommend cannabis, but all can diagnose. Are we penalizing the doctor or the patient? The only thing that you need to qualify as a patient is the condition. Besides, I had prescriptions filled for controlled medications at the drug store with no history. Why are we overgeneralizing Do we think that all doctors are frauds?
Since the first session of the 115th Congress convened on January 3, 2017, twenty-four cannabis reform bills have been introduced, fifteen in the House and nine in the Senate. All of them address in varying ways the puzzles that have emerged as more and more states legalize cannabis in the face of federal prohibition. Some are narrow, some are broad, some are for medical cannabis only, some for recreational too, some have more bipartisan support than others, but all indicate in some manner the direction federal reform will eventually take.
H.R.1227 – Ending Federal Marijuana Prohibition Act of 2017
Understanding the content and status of these bills and what they would mean for the industry if/when they are enacted, will help stakeholders anticipate changes that we know are bound to drop, and therefore be better prepared to adapt to them when they do.
Generally lacking in the journalism on cannabis is coverage and analysis of federal proposals deep enough to provide a useable understanding of the policies they stand to codify. As CIJ is dedicated to providing just such useable information to industry-insiders, this bill-by-bill review fills the gap.
All twenty-four bills fit rather neatly into one of three categories: De-scheduling/State Control Reform, Medical Cannabis Reform and Banking/Tax Reform. This second article in the series will look at the first category, and the next article will wrap up the last two.
De-Scheduling/State Control Reform
HR 1227 – Ending Marijuana Federal Prohibition Act of 2017
Policy:The bill proposes two major changes to the CSA. The first is to strike cannabis from the statute, essentially leaving the regulation or prohibition of it up to each state. The second is to insert into the CSA a provision that makes it a federal offense to transport cannabis from one state to another in any way that violates state law. In other words, if a state wished to continue prohibiting cannabis, it would be both a federal and state crime for anyone to transport cannabis into that state. Likewise, if a state wished to legalize and regulate cannabis, but wanted to prevent out-of-state cannabis from entering, the transportation provision would permit that state to do so.
Impact: Industries in states that have already legalized cannabis will structurally remain the same. Banking will open up for these state businesses, and so will the opportunity to write-off ordinary business expenses. Questions about contract enforcement and risks of federal prosecution will become moot, and when state regulatory bodies make decisions on how to govern the industry, they will no longer have to concern themselves with U.S. DOJ enforcement and/or prosecutorial policies. The big potential change will be seen if two or more contiguous states that have legalized cannabis decide to permit transport of the drug between their states. Markets will expand, opening access to new customers and challenges from new competitors. Licensees may also have the option to venue shop, and we could see states themselves competing with one another to attract cannabis business with the carrot of favorable regulations.
Representative Thomas Garett (R-VA) Photo: C-SPAN
One possible pitfall to keep in mind is that this legislation could violate something in constitutional law known as the Dormant Commerce Clause—a topic CIJ will cover should it surface.
Procedural Status:
Introduced on February 27, 2017 by Representative Thomas Garett (R-VA)
Cosponsors: 4 Republican, 11 Democrat, 1 At-Large
Referred to House Committees on:
Judiciary
Subcommittee on Crime, Terrorism, Homeland Security, and Investigations
Energy and Commerce
Subcommittee on Health
HR 2528 – Respect States’ and Citizens’ Rights Act of 2017
Policy: This bill would add to the CSA a provision specifically declaring no congressional intent to preempt state cannabis laws.
Representative Diana DeGette (D-CO) Photo: Center for American Progress Action Fund, Flickr
Impact: HR 2528 would rule out the potential for a judicial resolution to the federalism controversy. Most legal challenges to state legalization regimes have relied on a theory of Supremacy Clause preemption. Most notably was the 2014 case initiated by Oklahoma and Nebraska against Colorado, which you can find broken down here. Although the Supreme Court denied to hear that case, the issue is outstanding and remains an important factor, if not the central factor, in cannabis cases currently pending in federal court. Under this reform, state cannabis laws would be safe from invalidation, but it is less clear whether a mere anti-preemption clause would strip the federal government of its other powers under the CSA, or alter in any way the current status of cannabis as a Schedule I controlled substance. Questions arising under such uncertainty would likely have to go through long and hotly contested litigation before we have concrete answers. So although this proposal would resolve the ticklish issue of preemption, it leaves unaddressed the many other conundrums posed by federal-state divergence.
Procedural Status:
Introduced on May 18, 2017 by Representative Diana DeGette (D-CO)
Cosponsors: 1 Republican
Referred to House Committees on:
Judiciary
Subcommittee on Crime, Terrorism, Homeland Security, and Investigations
Energy and Commerce
Subcommittee on Health
HR 1841 – Regulate Marihuana Like Alcohol Act
Policy:This bill sets to accomplish a number of different reforms: remove cannabis from CSA; allow for import and export except into states that wish to prohibit cannabis altogether and/or prohibit its importation into the state; decriminalize cannabis use on national forest land; require a permit from the Secretary of the Treasury to import cannabis and to engage in any cannabis business activity; mandate businesses that obtain a Treasury permit to also comply with all State laws (so if state wants to continue to prohibit, they may); share jurisdiction over the administration and enforcement of the new federal laws between the DEA and the Bureau of Alcohol, Tabaco, Firearms and Explosives which is to be renamed the Bureau of Alcohol, Tobacco, Marijuana, Firearms and Explosives.
Representative Jared Polis (D-CO) Photo: Joshua Lawton, Flickr
Impact: If enacted, this bill will have many of the same impacts as the abovementioned HR 1227- Ending Marijuana Federal Prohibition Act of 2017. The IMPACT section for that bill will also pertain to this bill, with the following exception: by requiring a permit to operate a cannabis business from the Department of Treasury, the bill would add a layer of regulation on top of state law. Treasury Permits would be conditioned on permitees complying “with all other Federal laws relating to production, sale and consumption of marijuana.” Although §302 of the bill limits Treasury’s discretion in denying applications to only certain, enumerated disqualifying factors, the “other Federal laws” the bill refers to could embody any number of policy and jurisdictional preferences either enacted by the Congress or promulgated by the executive agencies charged with administration. At the current stage of speculation the best we can say is that descheduling cannabis under this bill would be a benefit to the industry, but out of all of the present proposals the provisions authorizing federal regulation present the greatest uncertainty for the shape the future of the industry might take.
Procedural Status:
Introduced on March 30, 2017 by Representative Jared Polis (D-CO)
Cosponsors: 1 Republican, 14 Democrat
Referred to House Committees on:
Judiciary
Energy and Commerce
Ways and Means
Agriculture
Subcommittee on Conservation and Forestry
Natural Resources
Subcommittee on Federal Lands
HR 975
Statute: Adds one sentence to the CSA that excludes its application to any person acting in compliance with State cannabis laws.
Representative Dana Rohrabacher (R-CA) Photo: Gage Skidmore, Flickr
Impact:The bill would have the same impact as the above HR 1227 – Ending Marijuana Federal Prohibition Act of 2017, with the only exception that the transportation provision in HR 1227 makes it clear that states will be permitted to prohibit the importation of cannabis from other states if they want to. This bill, without speaking directly to the matter of interstate importation, could leave the question open-ended until resolved through judicial interpretation.
Procedural Status:
Introduced on February 7, 2017 by Representative Dana Rohrabacher (R-CA)
Cosponsors: 8 Republican, 12 Democrat, 2 At-Large
Referred to House Committees on:
Judiciary
Subcommittee on Crime, Terrorism, Homeland Security, and Investigations
Energy and Commerce
Subcommittee on Health
Legislative Update
On Tuesday, August 1st, Senator Cory Booker (D-NJ) introduced the twenty-fourth cannabis reform bill. The bill has yet to be assigned a number or referred to committee, but it is called the Marijuana Justice Act of 2017, and makes some interesting contributions to the lineup of reform proposals.
Sen. Cory Booker (D-NJ) Photo: Nick Fisher, Flickr
For legalization purposes, the bill both removes cannabis from the CSA and removes prohibitions on importing and exporting. The above analysis for descheduling and import/export would apply to Booker’s bill in the same way. The interesting twist thrown in is how criminal and racial justice objectives are linked to incentives for states to legalize. The ultimate decision to legalize or not in a given state will continue to be the prerogative of each state, but the catch is that if a state does not legalize cannabis and the number of arrests for cannabis offenses in that state disproportionately impacts minority or low-income citizens, then the federal government will pull funding it provides to that state for criminal justice-related programs. This could push more states who would otherwise not legalize onto the reform bandwagon. Such states will have to pit how much they value federal funds against how much they value criminalizing cannabis. If the former outweighs the latter, policy logic will dictate that they legalize. Updates on this bill, and movement on any others, will be tracked by CIJ.
For the next piece in this series, we will review the bills currently pending in Congress that cover medical cannabis reform and banking/tax reform. Stay tuned for the latest on what’s happening around Capitol Hill and in federal cannabis policy circles.
As CIJ readers are probably aware, last month Congress passed the Consolidated Appropriations Act of 2017—the annual budget, in other words. Lying within this 1,665-page document is Section 537, which for one year restricts the Department of Justice from using any funds to prevent states from implementing their medical cannabis laws. Medical cannabis businesses and patients can take some solace in this restriction. Last summer, the influential U.S. Court of Appeals for the Ninth Circuit, sitting in San Francisco, confirmed that this appropriations rider prevents federal prosecutors from bringing suit against medical cannabis businesses and users operating in compliance with state law. Two problems remain glaring, however: one, the protection only applies to medical cannabis activity, not recreational; and two, it is only guaranteed to last for one fiscal year.
To be sure, for the 115th Congress to address the profusion of issues emerging from the nationwide legalization movement, they must do something more. Various reform proposals have in fact been introduced during the current congressional session, and in order to fully digest where they stand and what they have the potential to accomplish, it will help to make sure that we know how they fit within federal legislative procedure.
Catching Up to Speed with the Legislative Process
How A Bill Becomes A Law Photo: Mary-Frances Main
Whenever confronting a question about government and politics, it is never a bad idea to start at the source of authority. In America, that source is of course the Constitution, and in Article 1, Section 5, Clause 2, We The People have given to Congress the power to “determine the rules of its proceedings”. When we remember back to the School House Rock cartoon for How A Bill Becomes A Law, the majority of political maneuvering behind the basic process taught in the cartoon actually happens according to these ‘rules’ or ‘resolutions’. In fact, at the beginning of each new Congress (every two years) each chamber, and each committee and subcommittee within each chamber, votes on the rules that will govern how they are to go about their legislative business. Traditionally, the rules from the previous Congress are carried over by this vote with only minor tweaks. On top of that, both parties in each chamber have theirown internal rules and procedures for setting their policy agenda, directing political strategy, and determining which members will be nominated to certain leadership positions and committee posts. Playing the game of politics according to this layer cake of rules is a necessary part of the work of a legislator, and is often as important a factor in how our country is actually governed as is who wins election to office and what substantive provisions are formally enacted into law. So for the purposes of understanding federal cannabis reform, let’s take a quick look into the procedural status of the relevant legislation and who is in a position to influence what happens to it; then, when reviewing the policies they stand to codify, we will also understand the legislative landscape they must navigate.
Rep. Rohrabacher launches the Cannabis Caucus, Photo via Earl Blumenauer/YouTube
A good place to start is February 16, 2017 when Republican Congressmen Dana Rohrabacher (R-CA) and Don Young (R-AK) along with Democratic Congressmen Earl Blumenaur (D-OR) and Jared Polis (D-CO) launched the Congressional Cannabis Caucus. Under House and Senate rules, such a caucus must formally register with the House Committee on Administration as a Congressional Member Organization (CMO), disclosing its officers and members and declaring its purpose. These CMOs are sometimes referred to by different names: caucuses, conferences, coalitions, task forces, etc. The best known of these are the House and Senate Democratic Caucuses and the House and Senate Republican Conferences. By setting party policy, driving legislative strategy, promoting party cohesion and rewarding party loyalty, these largest of CMOs dominate partisan activity on Capitol Hill. Smaller CMOs, on the other hand, advance only specific interests and often cross the partisan divide. The Cannabis Caucus, for instance, was formed to catalyze a federal response to the nationwide legalization movement, and its “Path to Marijuana Reform” is a large part of the spate of bills that have been dropped into the congressional hopper over the past six months.
All in all there are twenty cannabis reform bills currently pending in Congress. In the House, all but two of the fourteen bills there have been referred to either the Energy & Commerce Committee or the Judiciary Committee, and all but one of the six in the Senate have been referred to either the Finance or Judiciary Committees.
A Note on Committees & Procedure
Rep. Earl Blumenauer (D-OR), is on the Ways and Means Committee Photo: Michael Campbell
Under House and Senate rules, bills are referred to committees by matching the former’s subject matter to the latter’s jurisdiction. In the House, the Speaker may attach time limits for committee action, refer a bill or portions of a bill to multiple committees and determine the sequence in which they are to be considered. The Speaker may also convene an ad hoc committee to consider a bill, and “make such other provision as may be considered appropriate.” As can be gleaned, the Speakership holds substantial procedural powers, and is in fact the only congressional leadership position created by the Constitution. The Senate’s counterpart, the majority leader, has in comparison less discretion in moving along legislative business.
At the next step, both the House and Senate grant each committee the authority to make their own rules on how they are to consider bills. Once referred, committee chairs generally decide to further refer a bill to a subcommittee, hold hearings, subpoena evidence and witnesses, call ‘markup’ sessions to propose and debate amendments, and finally to schedule a vote to report bills back to the chamber floor. If a committee chair wishes to kill a bill, these procedural powers provide wide, though not absolute, authority to do so. Jockeying for a chairmanship is therefore big game in the life of a legislator. Ultimately, members are nominated and elected to their respective committees and chairs according to the rules of their parties’ caucus or conference, and upon a vote of approval on the floor. Seniority is only one factor in these votes, and so because nothing is predetermined, these intraparty contests can explain a great deal about member behavior.
With that background to help triangulate Capitol Hill politics, we should now be better equipped to look into the cannabis bills pending before the 115th Congress, the committees to which they have been referred, and their procedural status. Stay tuned for the next article in this series when we will begin our bill-by-bill review.
According to a press release sent out on June 8th, ASTM International and the American Herbal Products Association (AHPA) announced a memorandum of understanding to collaborate on cannabis standards. The press release says that ASTM International will coordinate the work to develop the standards with all stakeholders involved and AHPA will make technical contributions and regulatory recommendations. AHPA will get recognized for their contributions per the license agreement. ASTM International is a standards development organization that develops voluntary consensus-based standards for industries.
This announcement precedes the first committee meetings for the development of cannabis standards, which began Sunday, June 11th and continue through June 12th. That committee group has now grown to roughly 200 members, including businesses, laboratories, associations, governments and more. “Many of our stakeholders – manufacturers, dispensaries, labs, consultants, and others – have laid the groundwork for guidance on the safe use and legal commerce of cannabis,” says Jane Wilson, director of program development at AHPA. “We are thrilled to now be contributing to standards development through one of the world’s top standards organizations.”
Ralph Paroli, Ph.D., the committee’s new chairman and the director of R&D in measurement science and standards at the National Research Council of Canada, says AHPA is a key organization in providing expertise on cannabis standards. “AHPA’s support for this new committee will help expedite international standards development, identify gaps, prevent duplicative efforts, and more,” says Paroli. The cannabis standards committee, officially designated D37, was formed on March 1st.
Last week, the American Society for Testing and Materials (ASTM International) approved the formation of a committee to develop standards for the cannabis industry. ASTM International is a standards development organization that develops voluntary consensus-based standards for industries. United States regulatory bodies and the World Trade Organization have recognized the organization’s standards in other industries.
On March 1st, the non-profit announced the formation of a committee for ““creating technical standards and guidance materials for cannabis and its products and processes.” So now that the vote has passed, what is the next step? They will begin the process of member training, appointment of leadership and writing the bylaws. ASTM will have two online briefings before their official meeting for the cannabis committee (D37) in June. Those meetings will discuss how the committee was formed and how it’ll be structured. The first official meeting of the cannabis committee will take place June 11th and 12th in Toronto.
Lezli Engelking, founder of FOCUS
Voluntary consensus-based standards means there is a balance of interests, an appeals process and an overall consensus has been reached. The areas of focus for the cannabis standards include indoor and outdoor horticulture and agriculture, quality management systems, laboratories, processing and handling, security and transportation, and personnel training, assessment and credentialing. Many standards will be developed under each of these broad categories. A large component of consensus-based standard development is openness…so anyone who wants to participate in the development of the standards is welcome and encouraged to do so. They are still looking for participants from the cannabis industry and those interested can register here.
Lezli Engelking, founder of the Foundation of Cannabis Unified Standards (FOCUS), says this is terrific news for the cannabis industry. “To have a global organization like ASTM, that federal governments actually work with and respect, is a huge stride forward for the cannabis industry,” says Engelking. “FOCUS is thrilled to be working with ASTM.” FOCUS and ASTM International have a derivative work license agreement that provides ASTM the FOCUS standards to use as a baseline for developing their standards. “FOCUS will continue to certify cannabis businesses to the FOCUS standards, but we will be able to add in the ASTM standards to our certification platform,” says Engelking. “It helps us expand our depth and reach in tools for our clients.”
FOCUS standards and ASTM standards are both voluntary consensus-based, meaning it is the businesses and stakeholders participating that ultimately write the standards. The organizations’ staff does not actually contribute to and develop the standards; they are more like a vehicle for the industry and stakeholders to come to a consensus, according to Engelking. “ASTM does the same thing that we do for the cannabis industry, just on a much larger scale,” says Engelking. “Its role is to fulfill the development, not actually develop it.” Because of that, ASTM and FOCUS standards can work in harmony.
According to a press release published March 1st, ASTM International formed a committee focusing on “creating technical standards and guidance materials for cannabis and its products and processes.” ASTM, founded in 1898, as the American Section of the International Association for Testing Materials, predates other standards organizations such as IEC (1906), ANSI (1918) and ISO (1947). ASTM International is a non-profit organization devoted to the development of international standards. For more than a century, ASTM has served as a leading venue for consumers, industry and regulators to work collaboratively under a balanced and consensus–based process to craft voluntary consensus standards.
ASTM International meets the World Trade Organization (WTO) principles for developing international standards, and maintains the attributes outlined in the National Technology Transfer and Advancement Act (NTTAA) for a voluntary consensus standards development organization. ASTM International is known throughout a variety of industries for creating voluntary consensus standards for products, systems, services and materials. ASTM standards are used globally in research and development, product testing, quality systems, commercial transactions, and more.
Lezli Engelking, founder of FOCUS
On January 18th, 2017, the American Public Health Association hosted thirteen industry stakeholders representing state laboratories, standards developers, research institution, academia, cultivation centers, auditors and software compliance providers, according to Lezli Engelking, founder of the Foundation of Cannabis Unified Standards (FOCUS), who is involved and familiar with the process. The planning meeting discussions included a summary of where the request was initiated, why a standards activity was necessary and the results of ASTM’s exploratory efforts. At the conclusion of the planning meeting, it was decided by vote, that ASTM should move forward with the activity.
On February 28th, 2017, roughly 60 stakeholders and cannabis industry representatives met at ASTM International’s headquarters in Conshohocken, Pennsylvania. The volunteer committee on cannabis, designated D37 by ASTM, is a result of inquiries flooding the company regarding cannabis since 2015, states the press release.
The committee will focus on six technical areas, forming subcommittees:
Indoor and outdoor horticulture and agriculture,
Quality management systems,
Laboratory,
Processing and handling,
Security and transportation, and
Personnel training, assessment, and credentialing.
Dr. Ralph Paroli, immediate past chairman of the board and director of R&D in measurement science and standards at the National Research Council of Canada, was voted to serve as the committee’s first chairman. “With its decades of experience in industries such as pharmaceuticals, medical devices, packaging, agriculture, pesticides, and more, ASTM International is the perfect place for standards development for the cannabis industry,” says Paroli.
Pending ASTM International board of directors’ approval (anticipated late April 2017), a shift of standards development efforts has been made from FOCUS to the ASTM International technical committee D37 on cannabis and its products and processes.
“FOCUS could not be more pleased by ASTM’s decision to further the development of internationally harmonized cannabis standards,” says Engelking. “This is desperately needed, and an enormous step in the right direction of legitimizing the cannabis industry. We are thrilled FOCUS standards will be included, and honored to be a part of this exciting process.” During this transition period, interested stakeholders can get directly involved through the FOCUS website and then follow directions provided by FOCUS.
According to Engelking, third-party, cannabis-specific certifications for cultivation, retail, extraction, infused products and laboratories are provided by FOCUS for cannabis businesses committed to providing safe, consistent and quality products. FOCUS certification helps businesses decrease liability and risks, maximize efficiency, reduce costs and differentiate their brands.
“FOCUS encourage all stakeholders to participate in this important process,” says Engelking. “ASTM has an incredible standards development system in place that allows for many different levels of participation.” During 2017, ASTM is offering free temporary memberships. After 2017, stakeholders will need to join as a participating member.
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This also means that as of November, globally, the current American federal justifications and laws for keeping cannabis a Schedule I drug, and based on the same, will have no international legal or scientific legitimacy or grounding.
ASTM International meets the World Trade Organization (WTO) principles for developing international standards, and maintains the attributes outlined in the 
