It was a head-spinning day in the cannabis policy world. Here's what you need to know.
- Marijuana reform is a hot topic in Washington D.C. this week, as a number of senators introduced bills to decriminalize the drug, as well as help cannabis companies access banking and insurance services.
- On top of that, the Senate Banking Committee on Tuesday held a hearing on cannabis banking reform.
- We broke down the bills and what it all means for cannabis businesses, investors, and policymakers.
- Sign up for Cultivated, our new cannabis newsletter.
Cannabis reform is a hot topic among lawmakers and presidential hopefuls at the highest levels of government.
Tuesday morning saw the introduction of a new bill to decriminalize marijuana at the federal level - spearheaded by Sen. Kamala Harris - along with a companion bill in the House from Judiciary Chairman Jerry Nadler.
And a bipartisan group led by New Jersey Sen. Bob Menendez, including Sens. Rand Paul, Kevin Cramer, and Jeff Merkley, introduced The CLAIM Act, or The Clarifying Law Around Insurance of Marijuana Act, which would ensure state-regulated cannabis businesses have access to insurance.
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The Senate Banking Committee convened the same morning to discuss the SAFE Banking Act, which would allow state-regulated cannabis businesses to access banking services.
Sixty-four percent of Americans say cannabis should be made legal, according to a Gallup poll from earlier this year. All this activity reflects that lawmakers are hearing this.
Here's what's in the bills and what this all means for cannabis businesses, investors, and policymakers:
The Marijuana Opportunity Reinvestment and Expungement (MORE) Act
The MORE Act, if passed, would decriminalize the drug by removing cannabis from the list of federally controlled substances and allow states to create their own policies. The companion bills - the Senate version sponsored by Sen. Kamala Harris and the House version by Rep. Jerry Nadler - would also require federal courts to expunge or resentence prior pot convictions.
Supporters of the bill say it's the most comprehensive piece of cannabis reform legislation yet in terms of social and criminal justice. The bill would levy a 5% sales tax on marijuana products to create an Opportunity Trust Fund that will include three grant programs aimed at boosting the participation of minorities and economically disadvantaged groups in the booming industry.
The MORE Act is not, however, the only piece of legislation floating around Congress that would decriminalize cannabis and seek to repair the harms of the Drug War.
Sen. Cory Booker (like Harris, a presidential hopeful) introduced The Marijuana Justice Act last year, which would similarly create $500 million community reinvestment fund to focus on job training for the cannabis industry as well as expunge convictions related to use or possession.
Sen. Elizabeth Warren has also previously introduced the Strengthening the Tenth Amendment Through Entrusting States Act, or STATES Act, that would allow states to determine their own policy on cannabis without fear of federal interference.
And Harris's erstwhile sparring partner, Joe Biden, released a criminal justice reform plan on Tuesday that indicates he would support marijuana decriminalization - not legalization - and push to expunge records and move cannabis to Schedule II of the Controlled Substance Act.
Whichever bill or combination thereof wins out won't be determined for some time. But it's becoming increasingly clear that cannabis policy will be a focal point of the 2020 Democratic primary campaign.
The Clarifying Law Around Insurance of Marijuana (CLAIM) Act
The CLAIM Act, if passed, would allow state-regulated cannabis businesses to access insurance like any other legal business.
Many cannabis businesses - plant-touching or otherwise - have been kicked off their existing insurance plans or have been unable to obtain insurance in the first place because cannabis is a federally controlled substance.
And many businesses have been denied bank loans because they don't hold insurance, and are unable to protect their businesses against property damage, theft, or accidents.
To be fair, insurance providers need assurance from the federal government that they won't be penalized by working with cannabis businesses. That's exactly what the CLAIM Act is trying to accomplish.
The bill would prohibit penalizing an insurer for providing service to a cannabis or cannabis-adjacent company and would protect employees of insurance companies from any liability associated with providing insurance to a cannabis company.
The Secure and Fair Enforcement (SAFE) Act and Senate Banking Committee Hearing
The SAFE Banking Act would prohibit federal regulators from terminating or limiting a bank's deposit insurance coverage or charter for working with marijuana businesses in states where marijuana is legal.
If passed, the bill - and its companion version in the House - would also prohibit regulators from discouraging lenders from working with marijuana businesses in states where the drug is legal.
On Tuesday, the Senate Committee on Banking, Housing and Urban Affairs held a hearing on cannabis banking centered on the SAFE Act. Markets Insider's Carmen Reinicke has the rundown on the hearing here. It's notable that the hearing was held at all: Idaho Republican Sen. Mike Crapo has generally been an opponent of cannabis reform and has previously stymied efforts to put the SAFE Banking Act to a floor vote.
Cowen analyst Jaret Seiberg said the fact that Sen. Crapo scheduled the hearing "would suggest a willingness to let the bill advance."
While Sen. Crapo didn't indicate he would outright support the SAFE Act, he did tell reporters following the hearing that he is "trying to find a way to address the various issues."
"This is a very important and complex issue that we need to get right," said Sen. Crapo, in his closing statement.
For their part, many of the Democrat lawmakers on the panel called for further social justice and economic inclusion demands in addition to the banking reform.
Margaret Tahyar, a partner at the law firm Davis Polk, told Business Insider in an email that the STATES Act is a "better bill," but the SAFE Act is a "shorter-term fix" which "has a better chance of passage in the political environment."
The SAFE Act, if passed, would only protect depository institutions like commercial banks and omits the engines of high finance, including broker-dealers, custodians, underwriters, and asset managers from federal protection.
Cannabis is legal for recreational use in 11 states, including Illinois, and legal for medical use in 33.