On the eve of the deadline to pass spending legislation that will avoid another government shutdown debacle, Congress appears poised to send a bill to President Obama that would ban the Department of Justice from meddling with state medical marijuana laws.
Tucked at the bottom of page 213 of the latest omnibus appropriations bill, a provision states that "[n]one of the funds made available in this Act to the Department of Justice may be used… to prevent such States from implementing their own State laws that authorize the use, distribution, possession, or cultivation of medical marijuana," listing 32 states, as well as the District of Columbia, where the amendment would apply.
The amendment, originally introduced by Republican Congressman Dana Rohrabacher, passed the House with bipartisan support earlier this year but was never taken up by the Senate. It's inclusion in the final omnibus bill is a big win for legalization advocates, who say it will effectively prevent the DEA from continuing to terrorize legal medical marijuana dispensaries and their patients.
"This is the leadership of both parties recognizing that there is a constituency that supports states setting their own marijuana polices. It's an absolute game changer," said Michael Collins, a lobbyist for the Drug Policy Alliance.
As Collins and other weed lobbyists note, the amendment is a first step toward reconciling the growing gulf between state marijuana laws and the federal government's hardline drug policies. Nearly 50 percent of Americans now live in a state or territory where medical marijuana is legal in some form. As of this November's midterm elections, four states and the District of Columbia have passed ballot initiatives legalizing weed for recreational use, and several states are expected to vote on similar measures in 2016. Nationally, public opinion has been gradually turning against prohibition, with 51 percent of Americans supporting marijuana legalization, according to the latest Gallup survey on the issue.
The legalization juggernaut has brought on a crazy patchwork of different standards across the country, all of which is overshadowed by the looming specter of the Feds. Because despite rhetorical shifts from President Obama, the federal government still outlaws weed, plain and simple, and continues to classify it as a Schedule I drug.
Needless to say, this has caused huge headaches for the growing marijuana industry, forcing cannabis dispensaries and other legitimate weed businesses to live in constant fear that DEA agents are going to swoop in and take away their livelihood. In 2011 and 2012, the DEA spent four percent of its budget on raiding legal cannabis dispensaries in 2011 and 2012, shutting down more than 500 dispensaries, according to the medical marijuana advocacy group Americans for Safe Access. Although the agency has reportedly eased up on the raids since then, the feds can still legally swoop in and disrupt legal cannabis businesses whenever they choose.
Beyond that, banks are reluctant to deal with marijuana businesses—even those that fill legal medical prescriptions—leaving weed purveyors to store their growing hordes of cash under their mattresses. In states that have relaxed marijuana laws, government agencies are hesitant to apply for federal grants, which require state and local officials to comply with all federal laws. And legal weed businesses are ineligible for tax deductions, keeping prices higher than they might be on the tax-free black market.
A report released last month by the Congressional Research Service lays out these issues. "The discrepancies between federal and state and local tax treatments of marijuana-related businesses create economic incentives to engage in the underground economy," researchers wrote. "The status quo administration of federal tax laws creates an economic advantage for illicit marijuana sellers, who are not subject to direct taxation of their sales."
The Rohrabacher amendment, if it passes, will likely alleviate some of these issues. But weed activists still have a long way to go in Washington. Which is why, as the legalization movement has gained momentum at the state level, a new cadre of professional stoners have started trekking up to Capitol Hill, joining the army of Gucci-clad K Street lobbyists hired to work over Congress on behalf of special interest groups.
According to federal disclosures, the coalition includes lobbyists from advocacy groups like the Drug Policy Alliance, the National Cannabis Industry Association, Marijuana Policy Project, and NORML (Vote Hemp is also in the mix). Together, these groups spent $544,000 on lobbying in the first three quarters of 2014, about $430,000 of this was spent by DPA, which gets some $5 million a year from billionaire financier George Soros.
"This was the first year I took a look at our coalition and said: We are a grown-up lobby," said Weedmaps' Aaron Houston. "Previously the lobbyists were not talking to each other. And the members of Congress themselves weren't talking to each other."
Houston and other leading weed lobbyists said they have been quietly laying the groundwork to push through additional reforms in the next Congress, with the goal of bringing aspects federal policy in line with new state laws. Don Murphy, a Republican weed lobbyist for the Marijuana Policy Project, said he is hopeful that his party's affection for state's rights will push the GOP-controlled Senate to leave marijuana policy to the states.
"The Democratic-controlled Senate has moved nothing that the Republican-controlled House has passed. So as I like to point out to my liberal friends, we're not going to do any worse than we did before," said Murphy, a former Maryland state legislator who pushed through the state's first medical marijuana bill. "Granted, Democrats tend to be more favorable to this issue than Republicans, but that didn't help in the Senate."
With the legal weed industry projected to grow to $21 billion by 2020, other groups are also getting in on action, hiring blue-chip lobbying firms to push Congress on legalization issues. The Ho-Chunk Nation, a Native American Tribe in Wisconsin, for example, paid the firm Powers Pyles Sutter & Verville $200,000 in the second and third quarters of 2014 to lobby Congress and federal agencies in several area, including marijuana-related issues. One problem they're trying to address is that state laws don't apply to Native American tribes, so the tribe needs federal approval to grow marijuana on their 4,500-acre land trust or to sell it in Indian Health Service pharmacies, said Susan Waukon, a representative in the Ho-Chunk legislature.
"I think that if it were to become legalized, we would want to be able to grow it. But I think the big thing is to be able to dispense it in our pharmacies," Waukon said. "We know there are great medical uses for it and we don't want to have to not be able to sell it to make money and to help people."
A company called Shimadzu Scientific Instruments paid the lobbying firm Van Scoyoc Associates $60,000 in the second and third quarters of this year to lobby on issues including federal procurement and "marijuana testing standards." (Among other things, Shimadzu makes a handy gizmo called a mass spectrometer that can detect THC levels in saliva.) Also registered to lobby on pot is the buttoned-down Credit Union National Association. CUNA lobbyist Ryan Donovan said he hasn't spent much time on the issue but that CUNA members in Washington state and Colorado are concerned about federal laws that technically bar banks from serving legal weed businesses.
"We have some members that may be interested in serving these businesses," Donovan said. "We've got no position on marijuana. What we want is credit unions to be able to serve their members and to do so in compliance with the appropriate state and federal laws."
Donovan noted that Colorado last month chartered what may be the first weed-oriented credit union, The Fourth Corner Credit Union, which is now awaiting a Federal Reserve master account number and is set to open its doors soon.
Already, there are signs that the federal government is softening its stance toward state legalization laws. The 2013 Cole Memo, which lays out the Justice Department's guidance toward the legal pot industry, discourages the department from going after legitimate marijuana operations. And interestingly, an IRS advisory counsel recently recommended stating that tax professionals who work for marijuana businesses that are legal under state law not be charged with unethical conduct under federal law. "With over 20 states allowing medical marijuana and now states beginning to legalize Recreational Marijuana, this industry needs qualified, ethical professionals to help them fulfill their income tax obligations," the opinion says.
But the language of the Cole memo, as well as a related Treasury Department memo, leaves the door open for the feds to go after weed purveyors and users. To make matters more confusing, the omnibus spending bill—the same one that includes the Rohrabacher amendment—also includes a provision to block Washington, DC from implementing its own legalization law.
Needless to say, the mixed messages have left everyone a little paranoid.
"The baloney is sliced very thin," said legalization opponent Josh Marquis, the district attorney of Clatsop County, Oregon. Since the memos make it clear the feds make no promises regarding marijuana laws, he added, "it's possible that even with a future Clinton presidency you could get a different response and with a Republican you could get a radically different one."
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