PoliticoPro - Congress Boosts Pot Industry In Spending Bills

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By Ben Weyl and Matt Nussbaum

Don't break out the bong just yet, but Congress is moving to loosen several federal marijuana restrictions this year.

A series of bipartisan provisions attached to the must-pass spending bills that fund the government are making their way through the House and Senate. They'd encourage doctors to prescribe medical marijuana and nudge banks to provide services to the nascent recreational marijuana industry.

Pot is legal in some form in 25 states and the District of Columbia, but Congress has been slow to follow suit. The federal ban on marijuana still isn't going anywhere, but the more modest proposals are likely to be enacted in the coming weeks and months.

"We're gaining more and more support every year," said Michael Collins, deputy director of the Drug Policy Alliance, which supports legalization. After years in which every reform proposal was defeated in Congress, he said, "We just win all the time."

For the first time, language to allow veterans to discuss treatment with medical marijuana with their Veterans Affairs doctors is likely to be soon signed into law. Such talk is currently prohibited by the VA, but the provision was added to the VA appropriations bill in the Senate in April and in the House in May.

"The current VA policy, I believe, is a violation of each state's 10th Amendment rights," said GOP Sen. Steve Daines of Montana, as he offered the amendment in the Senate Appropriations Committee. "It's also a violation of each veteran's first amendment rights to talk openly and freely with their doctor about all options available to them." It was adopted 20-10. In the House, a similar amendment, sponsored by Rep. Earl Blumenauer (D-Ore.), was defeated in two previous years before being adopted by the House, 233-189, last month.

Members of a House-Senate conference committee on the bill, which is also the vehicle for additional funding to combat the Zika virus, could finish negotiations this week, and it's highly unlikely the language will be stripped out after being supported by both chambers.

The Senate Appropriations Committee also recently adopted bipartisan amendments to the appropriations bills governing the Departments of Justice and HHS to prohibit the federal government from impeding medical marijuana programs in states where it is legal.

"I want to make sure the law is crystal clear and doctors in my home state of Washington and states like it don't have to worry about care for their patients," said Democratic Sen. Patty Murray, who offered the amendment earlier this month to the HHS spending bill.

The DOJ language has previously been included in spending bills that became law, in part thanks to the strong support of Rep. Dana Rohrabacher , a conservative Republican from California. Most Democrats are already supportive of such proposals, and GOP backing is increasing.

Congress also appears likely to push the banking industry toward engaging the marijuana business. Even as the marijuana industry has grown, it faces a major barrier: an inability to access traditional banking services, as most banks are deeply wary of getting involved. Despite the federal prohibition, the Obama administration has issued guidance to permit banks to do business with the companies in states where marijuana is legal, though few have done so.

Dispensaries have been left to conduct their business entirely in cash - including transactions with customers and paying employees and taxes - which is catnip to criminals.

"That's not safe," said Rep. Denny Heck (D-Wash.). "It's not safe for the 23-year old cashier behind the counter. Not safe for whoever transports it to wherever they transport it."

Heck has filed an amendment to the financial services appropriations bill to prevent financial institutions from being penalized if they provide services to state-sanctioned marijuana-related businesses. The bill is scheduled to receive a House floor vote this week, and if the amendment is permitted a vote, it is expected to be adopted. A similar amendment was easily adopted by the House in 2014, but it was not included in the final omnibus package.

The Senate is also showing support for the proposal; the Senate Appropriations Committee voted 16-14 last week to add the amendment, sponsored by Sen. Jeff Merkley (D-Ore.), to its financial services measure. If the bipartisan, bicameral support continues, the language would likely make its way to the president's desk in any eventual omnibus spending bill.

Taylor West, the deputy director of the National Cannabis Industry Association, expressed cautious optimism after the Senate committee's endorsement. "This is more than a symbolic effort, this can have a very real policy impact," she said. "It is simply an unsustainable situation for a five and a half billion dollar industry to continue to not have access to banking services. And this would be a substantial step toward correcting that."

Bankers, however, may not change their tune, at least not yet. "Because marijuana is illegal under federal statute, encouragement and guidance alone isn't enough," said James Ballentine, executive vice president of congressional relations and political affairs for the American Bankers Association. "In order for banks to be comfortable banking marijuana businesses, the federal statute must be changed by Congress."

Advocates may also fall short on an amendment from Rep. Eleanor Holmes Norton (D-D.C.) to allow the District of Columbia to set up a system to tax and regulate marijuana; recreational drug use was legalized in a 2014 ballot initiative, but Republicans have blocked the District from fully implementing the law in appropriations bills.

Still, opponents of marijuana restrictions boast that momentum is on their side. And with lawmakers largely driven by what's happening in their states, the upcoming November elections might augur more change. California, Nevada, Massachusetts, Arizona and Maine could all vote to join Alaska, Colorado, Oregon, Washington and the District of Columbia in legalizing recreational pot; Florida's voters are expected to give the green light for medical marijuana.

"This is going to happen incrementally," Heck said of his banking proposal. "But it is an incremental contribution in moving toward where it is that we ought to be."

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