Federal Prohibition for the Cannabis Industry

2019 May be the Year Where States are Set Free from Federal Prohibition

There may be a light at the end of the tunnel to this cumbersome issue in 2019, if some members of Congress get their way.

Since states legalized marijuana, there has been an ongoing battle between state and federal laws. Businesses have faced limitations on how they conduct their operations, and consumers are met with challenges when it comes to purchasing marijuana, as federal and state legislation continue to conflict.

There may be a light at the end of the tunnel to this cumbersome issue in 2019, if some members of Congress get their way. That light is in the form of a proposed legislation called the (STATES ACT) Strengthening the Tenth Amendment Through Entrusting States Act, sponsored by Senator Elizabeth Warren. This Amendment proves promising, because the proposal is being brought forth by a bipartisan team. President Trump is most likely on board with this bill as he has voiced his approval of a prior version of the bill in 2018.

The State Cannabis Laws Would Supersede Over Federal

In the United States over 600,000 people were arrested on cannabis related charges in 2017. Drugs are the number one reason that law enforcement arrest people and marijuana is the narcotic that police make the most arrests for. This puts Americans who live in California, Washington D.C., Alaska, Nevada, Oregon, Washington, Michigan, Vermont, Massachusetts, New York, Maine and Colorado in a sticky situation. You can be surrounded by legal dispensaries and cannabis delivery companies but run the risk of federal prosecution.

Currently there are forty-six states that have passed legislation that decriminalizes or permits medical or recreational cannabis products. If the STATES Act passes, it could help fix the problems that these conflicting federal and state laws create.

Similar Bills that Protect States from the Federal Government

One example of where a particular segment of the population is affected by federal drug laws are federal employees. Currently, people who apply for employment under the federal government and those already employed, can be denied or fired over cannabis use, even if they reside in a state where it’s legalized.

Reps. Charlie Crist. (D-FL 13th District) and Don Young (R-AK at-large District) filed a bill titled the Fairness in Federal Drug Testing Under State Laws Act, which is cosponsored by one republican and seven Democrats in the House. This bill would not get rid of drug testing. Employers would still have the right to administer a drug test to employees if they suspect that the employee was working while impaired. This act would not apply to federal jobs that requires their employees to have top secret security clearance.

This law would have a huge impact on Veterans who as of 2017 comprised about a third of the number of federal employees. PTSD is something that causes a lot of distress and cannabis has been shown to provide relief from PTSD and chronic pain. If Cannabis can be used to replace harmful and addictive opioids, it would help Veterans cope with their symptoms, while simultaneously gaining suitable employment.

Professionals That Would Benefit from the STATE ACT

If the STATES Act passes, it would be a huge relief to the following businesses and employees:

  • Human Resources
  • Banks
  • Credit Unions
  • VA doctors
  • Lawyers
  • Cannabis Dispensaries
  • Cannabis Cultivators

Ironically, federal cannabis laws pose obstacles to lawyers who are burdened with federal/state conflicts when advising their clients. Under current federal laws, if prosecutors’ choses to, they could go after law firms, accountants and many other professionals who work with dispensaries, distributors and cannabis growers.

Organizations that Support the State ACT

The ACLU who has been a longtime proponent of marijuana reform has put their support behind the STATES Act. The ACLU has been pushing for marijuana legislation change to subvert the racial disparities that exist within marijuana related arrests.

Other organizations that are behind the States Act include:

  • American Trade Association for Cannabis and Hemp
  • National Organization for the Reform of Marijuana Laws
  • National Cannabis Industry Association
  • Electronic Transactions Association
  • Citizens Opposing Prohibition
  • American Tax Reform
  • Drug Policy Alliance
  • Cannabis Trade Federation
  • Americans for Prosperity

This is just a handful of a long list of organizations that are fed up with the conflicting laws and are ready for Congress to make a change for the betterment of the Cannabis Industry and its consumers.

The Safe Banking Act

The SAFE Banking Act

Banking and capital have been a huge problem for cannabis businesses. Banks and credit unions are federally backed institutions. Creating a huge roadblock and forcing cannabis businesses to run a cash transaction only business. This causes a safety concern for some business owners, who worry that running a cash only business can make them a target for robbery.

The SAFE Banking Act sponsored by Ed Perlmutter (D-CO) and Denny Heck (D-WA) has passed a 45-15 vote by the House Financial Services Committee. Aaron Smith, the executive director of the National Cannabis Industry Association stated; “The goal of the bill would be to improve transparency, safety, justice and access in the marijuana industry.” If this legislation passes, the financial industry will be protected against punishment from federal banking regulators who currently are allowed to go after cannabis businesses regardless of their compliance with state laws.

The Credit Union National Association and American Bankers Association have voiced their approval of this proposed legislation. Both organizations have confirmed that their members have faced difficulty that arose from conflicting federal and state laws.

Outlook of the Success of the States Act

The Judiciary Committee Chairman, Jerrold Nadler (D-NY 10th District) stated that the committee may take up the issue of cannabis “fairly soon.” In the past, Nadler signed bills that would put an end to federal probation even though he did not cosponsor Congress’s version of the 2018 STATES Act. Nadler similarly stated that he would be open to legalizing other softer drugs besides marijuana.

1 Comment

  • Admin Cannabexchange

    There’s a big movement happening across the U.S. We may not be able to get 1 stand alone bill that will legalize marijuana across the country, but there are 2 to 3 bills in the works that will limit any restrictions the federal government has over this industry. Giving more power to the states over marijuana legalization.

    Read on and get involved, how do you think these bills will affect the rest of the states that still restrict legalizing cannabis?

    Admin Cannabexchange,
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