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Cannabis on the Hill

FY18 wrapped in late Mar.2018 and the critical – and infamous – language to protect state-regulated medical programs was included in the FY18 spending bill. This language that defunds any DOJ efforts from interfering with medical programs remains in effect until 30.Sept.2018.
We are now working on FY19 Appropriations – which again includes the language to protect medical programs, and also includes language – a) to protect adult-use programs, b) addresses the banking shortage, c) reiterates that Veterans are allowed access, and d) addresses inequitable tax treatment of stakeholders operating within a regulated program (i.e., 280E). Using the appropriations process is one means of effecting change in D.C.; however, that also requires an annual lift to secure the language. There is the authorization pathway as well which is gaining momentum – more on this in the following paragraph.

The industry benefited from a massive step in the right direction this past Friday (the 13th!) when Senator Gardner (R-CO) secured a verbal agreement from Mr. Trump that Colorado’s state-regulated programs are insulated from federal interference, and that Mr. Trump would support comprehensive legislation that respects states’ rights and resolves the conflict between state regulated programs and federal laws. The latter point is the most significant. This was not an orchestrated move – Sen. Gardner had the opportunity for a last minute meeting at the White House and he took it and sealed the deal.

What we’ve known for some time is that Mr. Trump and A.G. Sessions (DOJ) have been at odds on many issues. An example of this division relevant to the Cannabis industry is the DOJ’s rescission of the Cole Memo after the 1st of the year.  Mr. Sessions did this in a silo. The White House nor Congress was informed in advance of the rescission.

As has been all along – the strength and integrity of the state-regulated markets continues to be the industry’s best offense in D.C. On a side note, if CML works with Clients on compliant marketing measures, then CML has an additional selling point as compliance is critical!

In addition to FY19 Appropriations, my priority is to work on what the federal legislation will look like – and of significant importance is to ensure minimal disruption of the state programs. The legislation will ideally address IP, banking, and tax matters among several other strained topics. I anticipate the criteria set out in the Cole Memo to be included in the bill – as this will make the legislation the most palatable for the lawmakers that remain on the fence about the regulated industry. Also of note, the regulated industry is now large enough and the agendas being pushed by advocates in D.C. are becoming self-serving (versus for the greater good of the industry), which underscores the importance of staying engaged. The smaller business operations are my main concern – and as we’ve previously discussed, keeping women at the table.

If you think beneficial, we may want to discuss a conference call with a few of your Clients for their input on what they would like to see in the federal legislation. Could be a good Client touchpoint for you – and feedback from stakeholders would be greatly appreciated! If interested, let’s discuss at your earliest convenience.

Finally, also of interest for you may be Senator McConnell’s (R-KY) recent bold support and bill to legalize hemp production in the U.S. The Senator has bypassed committee debates (and votes), and took the Hemp Farming Act of 2018 (S.2667) straight to the Senate floor. The timing of a vote on the bill is yet to be determined. My understanding is the Senator intends to engage with the DOJ to discuss the bill and the importance of industrial hemp farming. The decades-long effort to lift the federal restrictions on the cultivation of industrial hemp are finally coming to fruition!


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