Trump’s Support for Pot Remains in Flux

Credit union leaders said they are encouraged by President Donald Trump’s commitment to support a legislative solution that would eliminate the risks from federal prosecution for financial institutions that serve the recreational marijuana industry.

But they also point out there many uncertainties and unanswered questions about Trump’s commitment, which was announced on April 13 by Sen. Cory Gardner (R-Colo.). In addition, an interesting trend is emerging in Washington that shows more federal lawmakers have recently announced plans to introduce new bills or support existing legislative proposals that would decriminalize marijuana at the federal level.

Regardless of whichever legislative proposal garners the most support, it will be an enormous and arduous task for any bill to get the majority vote from both the House and Senate this year.

“While promising, there remain many uncertainties,” said Russell E. Rosendal, president/CEO of the $536 million Salal Credit Union in Seattle, which was one of the first credit unions in the nation to serve the cannabis industry. “Any legislation would have to get through Congress, which requires tremendous effort. There is no indication in [Gardner’s April 13] statement about what any legislation would include and how it may impact regulatory issues. We continue to support the SAFE Banking Act, which provides all lawful and regulated cannabis businesses the protections they deserve.”

In recent discussions with President Trump, Gardner reported that the president said he would support a “federalism-based legislative solution to fix this states’ rights issue once and for all.”

Gardner managed to get Trump’s commitment after he began to block Department of Justice nominees in response to Attorney General Jeff Sessions’ Jan. 4 recession of the Cole Memo, which essentially lowered the risks from federal prosecution for financial institutions as long as they did not violate the memo’s top enforcement priorities.

Following discussions with the DOJ in February, Gardner lifted some of his holds on DOJ nominees, but kept the rest in place until he received Trump’s commitment in April that Colorado’s rights would not be infringed.

Gardner, however, has not elaborated on what provisions would be included in his federal legislation and when he might introduce it. The Colorado senator did not respond to CU Times’ phone messages and an email seeking additional information about his proposal.

And while Gardner was interviewed by The Cannabist, a Denver-based trade publication, after he announced Trump’s cannabis commitment, his description of a federal legislative proposal remained vague, only stating his legislation would be more comprehensive than other marijuana bills that are stuck in congressional committees. One of them is the Secure and Fair Enforcement Banking (SAFE) Act that was supported by a group of nine bipartisan senators last May, but was referred to committee last September. The bill proposed that financial institutions would no longer face the threat of federal sanctions for working with marijuana-related businesses and entrepreneurs.

Gardner reportedly said that other Republican and Democrat senators are “putting the finishing touches” to his draft bill and hoped it would be moving soon.

He also told The Cannabist that he received assurances from Trump that his state and other states that have legalized marijuana would be “safe from federal interference.” Indeed, since Sessions revoked the Cole Memo, there have been no publicly reported federal prosecutions of recreational marijuana businesses.

The DOJ declined to comment on Gardner’s announcement when reached by CU Times.

Although Rosendal viewed Gardner’s April 13 statement as a confirmation that progress is being made toward more public safety, medical research and monitoring of the new marijuana industry, he believes we are still a long way from being able to bank cannabis businesses like any other legal businesses.

Another uncertainty is President Trump’s temperament – he has earned a reputation of frequently changing his mind on issues he previously supported, though he publicly favored states’ rights regarding the marijuana issue during his campaign.

“President Trump is notorious for changing his mind and financial institutions that might contemplate serving the industry will remain in a holding pattern until legislation from Congress gets to the president’s desk and is signed,” noted Todd Nelson, a former credit union executive who now heads communications and brand strategy firm TNTpr in Oakland, Calif., a state that legalized recreational pot this year.

“If this does happen, banks and credit unions currently serving the cannabis industry will earn justification but face increased competition from new entrants looking to capitalize on a multi-billion-dollar opportunity,” he said.

Nevertheless, Scott Earl, president/CEO of the Mountain West Credit Union Association, said President Trump’s commitment was encouraging news. MWCUA represents credit unions in Colorado, where recreational and medical marijuana use is legal.

“This commitment allows members of the Colorado legislative delegation to pursue and bring forth proposed legislation that will once and for all resolve the issue of providing financial services to this industry,” Earl said. “We will work with our legislators and assist in these efforts as needed.”

Likewise, Troy Stang, president/CEO of the Northwest Credit Union Association, which serves Washington State and Oregon – states where medical and recreational marijuana is legal – also thought this was a step in the right direction.

“We’ve recognized from day one that this was going to take a federal legislative solution in order to ultimately rectify the conflict between state and federal law,” Stang said. “In the meantime, some assurances by the administration, both in the Treasury and the attorney general’s office, certainly helps give some confidence, but it doesn’t give 100% confidence.”

What has given financial institutions some degree of confidence to keep serving the pot industry after the Cole Memo was rescinded has been the FinCEN marijuana guidelines, which have not been revoked by the U.S. Treasury’s office. While some industry observers thought it was only a matter of time before the FinCEN guidelines would be gone, so far they have remained intact.  The FinCEN guidelines list required due diligence steps for financial institutions when serving marijuana businesses.

What’s more, an interesting trend has been developing since Gardner announced Trump’s cannabis commitment.

Some senators plan to introduce new legislation to decriminalize marijuana, while other senators have pledged their support for cannabis bills that were introduced earlier. And the House of Representatives recently held one of its first hearings ever on legislation to roll back medical marijuana regulations, according to the Washington Post.

Most recently, Senate Democratic Leader Chuck Schumer (D-N.Y.) on April 20 announced his first-time-ever support for decriminalizing marijuana at the federal level. He plans to introduce legislation that would remove marijuana from the list of scheduled substances under the Controlled Substances Act, effectively making pot legal at the federal level. The legislation would allow the states to decide how they will treat marijuana possession.

The Schumer proposal, however, would not change federal authorities’ ability to prevent trafficking from states where marijuana is legal to states where it is not, nor would it curtail in any way the federal government’s ability to regulate marijuana advertising – just as it does tobacco and alcohol – so that advertisers cannot target children. Schumer has long advocated for states’ rights when it comes to medical marijuana.

What’s more, on April 19, U.S. Senator Bernie Sanders (I-Vt.) became the third senator to co-sponsor Senator Cory Booker’s (D-N.J.) bill, the Marijuana Justice Act, to end the federal prohibition on marijuana. In February, Senator Kirsten Gillibrand (D-N.Y.) announced her support for the bill and Senator Ron Wyden (D-Ore.) was the first senator to throw his support behind the bill. In addition to removing marijuana from the list of controlled substances, Booker’s bill would also provide incentives to states with federal funds to decriminalize their cannabis laws.

“I think we reached critical mass among the population years ago,” Don Murphy, director of conservative outreach for Marijuana Policy Project, told the Washington Post. “But I think we are finally reaching critical mass on Capitol Hill now.”

In addition to Washington State, Oregon, Colorado and California, recreational pot use is also legal in Alaska, Maine, Massachusetts, Nevada, Vermont and the District of Columbia.

While 29 states have legalized medical marijuana, an additional 17 states allow cannabidiol, an ingredient from the marijuana plant that does not lead to intoxicating effects, to treat patients with serious medical conditions, according to the National Conference of State Legislatures. Kansas, Nebraska, South Dakota and Idaho are the only states that have no marijuana access laws, the NCSL reported.

The Rohrabacher-Blumenauer amendment, which forbids the DOJ from using federal funds to crack down on medical marijuana stores or patients, was included in 2018 Omnibus funding legislation, which was approved in March and signed into law by President Trump.