Democratic Sen. John Hickenlooper of Colorado last week called for the passage of the SAFE Banking Act, saying that the nation’s refusal to allow cannabis businesses access to traditional financial services is a “recipe for disaster.”
While addressing a virtual policy conference last Wednesday, Colorado Sen. Hickenlooper said that federal regulations that deny banking services to state-licensed cannabis businesses are a magnet for criminal activity and are contrary to the goals of marijuana legalization.
“If you really wanted to create an industry that’s dependent on gangs and cartels, make it all cash,” Hickenlooper said at the Regulating Cannabis event hosted by The Hill. “It’s almost like the system that is there now is oriented towards promoting things that we don’t want.”
Under current federal regulations, banks are subject to penalties under money laundering and other laws for servicing cannabis businesses, even those legal under state law, forcing the licensed cannabis industry to operate in a risky environment heavy in cash. Hickenlooper, who served as Colorado’s governor when the state’s voters legalized recreational cannabis in 2012, said the cash-only system that dominates the cannabis economy is “a recipe for disaster” and a “blueprint for catastrophe.”
“If you de-schedule it, banks can start banking it so it’s no longer a cash business,” Hickenlooper said. “There are multiple negative consequences of having it be a cash business. One is that businesses themselves can’t get loans.”
Colorado Supports the Pending SAFE Banking Act
Under pending federal legislation, the Secure and Fair Enforcement (SAFE) Banking Act, federal banking regulators would be prohibited from penalizing banks that choose to serve cannabis firms doing business in compliance with state law. The legislation was initially introduced in the House in 2013 by Democratic Rep. Ed Perlmutter of Colorado, who has reintroduced the bill each subsequent congressional cycle.
Hickenlooper noted on Wednesday that the SAFE Banking Act would not “oppose the will” of states that have not yet legalized cannabis in any form, adding that the reform would benefit the states that have instituted cannabis policy reforms.
“In terms of banking, I don’t think there’s any benefit to penalizing those states where their citizens have voted to legalize,” he said.
In April, the SAFE Banking Act was approved as a stand-alone bill by the House of Representatives. And in September, the House approved the legislation as part of a must-pass defense spending authorization bill. The House and Senate are currently working toward a consensus on the defense spending bill, leaving the fate of the cannabis banking provisions up in the air.
Bill Has Bipartisan Support
The SAFE Banking Act has bipartisan support in Congress, passing in the Democratic-majority House in May by a vote of 321 to 10 with the support of 106 Republicans, including Rep. Nancy Mace of South Carolina. Last month, Mace unveiled a separate bill, the States Reform Act, which would legalize and regulate marijuana at the federal level.
“There’s nothing really controversial about cannabis except for here in Washington where you have some members who are afraid of it, or afraid to touch it,” Mace said last Wednesday. “It shouldn’t be that way.”
Mace’s bill serves as an alternative to the MORE Act, a comprehensive proposal advanced by Democrats that would also legalize cannabis at the federal level. The legislation also includes wide-reaching social equity provisions including expungement for federal cannabis crimes. The MORE Act would levy higher taxes than those in Mace’s bill, with revenue raised dedicated to investments in communities harmed by the War on Drugs.
Mace agreed with Hickenlooper that cannabis banking regulations must be changed, saying that the current system offers an incentive to criminals while putting the owners of legal businesses at risk.
“We’re funding the cartels by having all-cash businesses,” Mace said. “It’s dangerous.”
The SAFE Banking Act also has broad support from governors of jurisdictions that have legalized marijuana. In November, a bipartisan group of 24 governors from states and territories with legal cannabis sent a letter to congressional leaders calling for the passage of the legislation.
The governors noted in the letter that while cannabis has been legalized in some form by a majority of U.S. states, the continued lack of traditional banking services and large amounts of cash throughout the supply chain leave legal marijuana businesses at increased risk of robbery and other crime. Additionally, the lack of access to loans inhibits the growth of the booming industry.
“The SAFE Banking Amendment will remedy these harms and help keep communities in our states and territories safe by allowing legitimate and legal cannabis companies to access banking services,” the governors wrote.
New Washington, D.C. Policy Lets Adults ‘Self-Certify’ for Medical Cannabis
City lawmakers in Washington, D.C. adopted an emergency ordinance on Tuesday designed to ease access to the medical cannabis program in the nation’s capital by allowing all adults to “self-certify” their eligibility to use medicinal pot. Under the proposal, adults 21 and older would no longer be required to submit a recommendation to use medicinal pot from a health care provider when they apply for a medical cannabis identification card.
Supporters of the measure maintain that the bill will make it simpler for patients to gain access to medical cannabis, particularly for those who have difficulty seeing a doctor. Out of thousands of physicians practicing medicine in Washington, D.C., only 620 are registered to issue medical pot recommendations. In January, the city council passed a similar measure that allowed adults 65 and older to self-certify for medical cannabis card eligibility, but that ordinance expired on May 1.
“This self-certification is urgently needed for consumers and dispensaries alike,” said Councilmember Janeese Lewis George, as quoted by the DCist. “Expanding our patient base is a necessary first step to putting them on an equal playing field.”
Washington, D.C. Dispensaries Face Competition From Illicit Businesses
The emergency ordinance passed on Tuesday was introduced by Councilmembers Kenyan McDuffie and Mary Cheh. Proponents of the bill also hope that it will help regulated medical dispensaries compete with the illicit cannabis economy.
“Due to the lower barriers to access in the gray market, a significant number of medical marijuana patients have shifted from purchasing their medical marijuana from legal medical dispensaries to the illicit gray market, creating a significant risk to the long-term viability of the District’s legal medical marijuana industry,” McDuffie and Cheh said in a statement accompanying the emergency bill. “If this trend continues, it is possible that gray market sales could wipe out the District’s legal marijuana dispensaries.
Cheh and McDuffie went on to state that given the “benefits that regulated and safe legal dispensaries provide to medical marijuana users in the District, it is vital that the industry survive until the District can stand up a regulated recreational market and transition toward full regulation of recreational marijuana products.”
The council members noted that Washington, D.C.’s permitted medical marijuana dispensaries face stiff competition from the city’s gray market for cannabis, which takes advantage of recreational cannabis decriminalization loopholes to operate with virtual impunity. One popular scheme features businesses who sell cheap merchandise at hyper-inflated prices and include what is ostensibly a gift of cannabis with the purchase.
“Savvy business owners have pushed the legal limits on the gifting industry,” McDuffie said ahead of the vote. “I’ve had medical dispensaries that have reached out to me and my staff and say that if we don’t pass this measure, it could put their businesses into jeopardy.”
Although possession of cannabis has been legalized since the passage of a 2014 ballot measure, the federal government has blocked implementation of the law that would allow for the opening of recreational pot retailers. At Tuesday’s meeting, Council Chairman Phil Mendelson said that he would still like to see additional legislation that targets Washington D.C.’s cannabis gifting shops, noting that the business will be vital infrastructure for a potential legalized adult-use cannabis market.
“It’s not an equal playing field and will never be as long as there are illegal cannabis gifting shops,” he said. “As long as there are these businesses, the legal industry won’t be there to step in [when legalization happens].”
The city council passed the ordinance by a unanimous vote at its meeting on Tuesday. The bill is now headed to the office of Mayor Muriel Bowser for her consideration. In a letter sent to the council on Tuesday, Bowser said that she is in favor of the legislation, according to media reports.
The impact of cannabis use on COPD and COVID-19
Tobacco use is associated with reduced air flow rate and lung volume; however, this association is not observed with cannabis use. In fact, one 2012 study found no association to exist between occasional and minimal cumulative cannabis usage and poor pulmonary function.
To determine the different effects of cannabis and/or tobacco, it is crucial to know the quantity of how much was smoked. Those who frequently use tobacco will typically smoke between ten and twenty cigarettes each day, whereas the average cannabis user will smoke two to three times per month.
Many people first try cannabis in their late teens or early twenties, with some continuing to use cannabis for several years at modest doses. Since heavy cannabis users were comparatively uncommon in the study population, accurate estimates of the consequences of excessive usage were not available in the aforementioned 2012 study, despite the fact that heavy exposure to cannabis may harm the lungs.
In a recent Chronic Diseases and Translational Medicine study, researchers evaluated the effects of smoking cannabis on coronavirus disease 2019 (COVID-19) test positivity, as well as potential risk factors associated with cannabis-induced lung damage and COVID-19.
About the study
Approximately 500,000 men and women participated in the United Kingdom Biobank (UKB), which is a sizable prospective observational study that was conducted between 2006 and 2010. UKB participants were selected from 22 centers throughout England, Wales, and Scotland and are still being longitudinally monitored to record any subsequent health occurrences.
Study participants were asked several questions upon their enrolment in the UKB. For example, participants were asked whether a doctor had ever informed them that they have a certain health condition, such as chronic obstructive pulmonary disease (COPD).
The subjects were then asked whether they had consumed cannabis. If the response was “yes,” cannabis usage was entered in the UKB data field. The participants were also asked at what age they had last consumed cannabis.
Subsequently, study participants were asked the frequency to which they used cannabis. The available response options included less than once a month, once a month or more, but not every week, once a week or more, but not every day, and once a day.
The researchers also incorporated COVID-19 laboratory-confirmed cases that were reported between March 16, 2020, to April 26, 2020, with the UKB data. A positive test result was regarded as a reliable indicator of severe COVID-19 during this time, as the testing of older groups was primarily restricted to individuals who were hospitalized as a result of their infection.
The mean age of the study participants was about 57 years old. Taken together, 54% of the study participants were women, whereas the remaining 46% were men.
Increased cannabis use was associated with an increased incidence of both COPD and COVID-19 positivity. Packs-years smoking was also found to correlate with COVID-19 incidence.
In general, smoking tobacco increases an individual’s risk of lung infections like COVID-19. Although the data is limited in establishing an association between the smoking of cannabis and its effects on the lungs, previous research has shown that cannabis smoke causes respiratory symptoms such as increased cough, sputum, and hyperinflation, all of which are also observed in tobacco smokers.
In the current study, both smoking packs of cigarettes and cannabis had significant effects on the likelihood of testing positive for COVID-19. This observation insinuates that although cannabis had not been used for at least ten years, its ability to cause damage to the lungs is additive.
Although it is challenging to correctly predict and separate the consequences of cannabis usage from those associated with smoking cigarettes, smoking cannabis can nevertheless cause significant harm to the lungs.
With prolonged cannabis use, significant lung problems can develop, such as chronic bronchitis symptoms. Cannabis use has also been linked to weakened immune systems and pneumonia.
Excessive cannabis use can also worsen COVID-19 outcomes and restrict the airways. However, cannabis use may reduce lung inflammation and inhibit viral replication in COVID-19 patients, which may improve certain prognoses.
There are several notable weaknesses of the current study. For example, cannabis usage was only linked to positive COVID-19 test results. Furthermore, the frequency of cannabis usage and its ability to alter an individual’s susceptibility to COVID-19 was not explored.
The high prevalence of Caucasian participants may have also impacted the current findings. Future studies that incorporate more independent variables in the logistic regression would be beneficial.
Viridis Laboratories Continues to Fight for Safety of Michigan Cannabis Consumers
Viridis Chief Operations Officer and Founder Todd W. Welch sent an email on June 17 with a statement addressing the company’s values and recent information that has come to light regarding the CRA.
“These CRA allegations against Viridis are from last August and continue to be baseless, meritless and totally detached from science, facts and data,” said the statement. “We intend to defend our business against these false claims during the court process and show the vindictive and retaliatory nature of the CRA’s actions which are clearly designed to cause maximum disruption and damage.”
“Court-ordered proficiency test results that Viridis is in possession of, which the CRA had been withholding, will directly contradict these findings, and we’re confident the truth will prevail when all facts come to light,” the statement continued. “We hope these legal proceedings will pave the way for more transparency, accountability, and reforms at the CRA. Our hope is that the CRA can one day fulfill its true mission of promoting patient and product safety instead of unfairly targeting Michigan businesses trying to grow, compete and create jobs.”
The email also shared that nearly all of the company’s customers have returned, with an added 63 new customers. The company supports testing for approximately 62% of the state’s flower.
The CRA (formerly called the MRA, or Marijuana Regulatory Agency, as of April 2022) issued a recall for products tested by Viridis Laboratories and Viridis North in November 2021, with claims that Viridis products contained “inaccurate and/or reliable results,” for products analyzed within the range of August 10 and November 16, 2021. This resulted in the recall of an estimated $229 million in product value.
The MRA claimed that Viridis’ methods of testing were “unreliable” and “inaccurate,” which Viridis responded to by filing a Court of Claims lawsuit against the MRA on November 23.
By December 3, the court ruled that the CRA must release half of the accused products, which were tested by Viridis North, LLC. Viridis Attorney Kevin Blair praised the court decision, even if “the entire recall was completely without merit.” “This ill-advised recall has caused irreparable harm not only to Viridis but to growers, retailers and consumers throughout the state. The MRA needs to be held fully accountable for violating state law, ignoring the advice of respected national experts and causing mass disruption to the Michigan cannabis industry,” he said in a press release.
Months later in February 2022, more news came forward regarding the CRA’s conduct. Judge Thomas Cameron released a court opinion that “the issuance of the recall against the Bay City facility was, on the Court’s review of the record, arbitrary and without basis.”
Shortly after this, it was revealed that CRA had instructed its agents not to seize illegal cannabis found at CRA-licensed facilities. New evidence from CRA depositions shared troubling truths about the inner workings of the MRA when it comes to following its own policies.
In March, Senator Aric Nesbitt questioned the CRA and its management. “I think it was poorly communicated to your licensees and it didn’t seem like you had thought through the impact on the wider marketplace before acting on the recall, and I thought it was very poorly done and very clumsy in the implementation of the recall,” Nesbitt said at a Senate Appropriations Subcommittee on Licensing and Regulatory Affairs/Insurance and Financial Services.
Most recently in May, the CRA filed formal complaints about the accuracy of Viridis’s THC test results. According to Viridis CEO Greg Michaud, described that allegations from the CRA “continue to be baseless, meritless and totally detached from science, facts and data.”
Furthermore, Michaud shared that the CRA’s Inter-Laboratory Proficiency Test, which was obtained via a court order, reveals some shocking finds about other lab testing facilities in Michigan. The test results are not yet public, but Welch’s email suggests that more news will be announced soon.
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