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Pennsylvania Cannabis Banking Bill Headed to Governor’s Desk

by Travis C | Jul 6, 2022 | Blog, Business, Cannabis Business, Cannabis Law, Cannabis Law and Compliance, Cannabis News, Legalization, Marijuana, Medical Marijuana

A Pennsylvania cannabis banking bill that would protect state banking and financial institutions from prosecution is on its way to Governor Tom Wolfe’s desk after passing the House last week.

The legislation is nearly identical to a standalone bill that passed through the legislature earlier this session. The new measure passed with a 173-27 vote.

Sen. John DiSanto (R), the chief sponsor of the bill, had initially introduced the measure as a standalone piece of legislation. But after passing the Senate earlier this year and clearing the House committee, DiSanto filed it as an amendment to the already-passed HB 311. That bill deals with authorizing certain financial institutions to conduct savings promotion programs.

The amendment won’t give financial institutions complete immunity however, as it only applies on the state level. As cannabis is still a Schedule 1 controlled substance according to the federal government, banks and financial institutions can still be prosecuted for working with legal cannabis businesses, even if they are operating in a legal state.

However the amendment represents a step in the right direction for an industry that has been plagued with financial burdens due to federal laws. The fed has been stalling the passage of the SAFE Banking Act which would give federal banks protection in dealing with legal cannabis businesses.

The federal government isn’t necessarily cracking down on any banks doing business with legal cannabis businesses currently. But the implication that they could be punished has prevented almost every federal financial institution from working with legal cannabis businesses.

Now state institutions at least will not have to worry about being prosecuted on the state level. With the federal government more or less looking the other way in regards to state legal cannabis industry operations, more banks and financial institutions can feel safer in working with cannabis businesses.

The text of the amendment officially states that a “financial institution authorized to engage in business in this Commonwealth may provide financial services to or for the benefit of a legitimate cannabis-related business and the business associates of a legitimate cannabis-related business.”

The same protections will also be afforded to insurers. However the amendment also specifies that banks or insurers will not be required to provide services to legal cannabis businesses.

Further, the legislation says the state government cannot “prohibit, penalize or otherwise discourage a financial institution or insurer from providing financial or insurance services to a legitimate cannabis-related business or the business associates of a legitimate cannabis-related business.”

Agencies will be prohibited from “recommending, incentivizing or encouraging a financial institution or insurer” to not provide services just because a business is associated with cannabis.

Banking has been the largest issue impacting legal cannabis industries across the country since Colorado first legalized in 2012. With lack of access to federal banking, and few state institutions willing to take the risk, cannabis business owners are at the whim of whatever institution will take them.

This typically results in higher than average interest rates, stricter monitoring of account activity and even account removal without notice. Credit Unions and smaller local banks will even impose exorbitant deposit fees since they know cannabis businesses will deposit larger amounts of cash compared to other businesses.

Additionally as most credit card companies operate in cooperation with federal institutions, the majority of cannabis businesses are cash only. Robbery and theft is extremely common in the cannabis industry as businesses owners must carry bags of cash sometimes containing hundreds of thousands of dollars since they can’t accept credit from customers.

The Secure and Fair Enforcement (SAFE) Banking Act that has passed the House in some form six times at this point, only to stall in the Senate. It is currently the only federal bill focused on solving the banking issues plaguing the legal cannabis industry.

Pennsylvania cannabis legalization gains an unlikely ally

by Travis C | Oct 6, 2021 | Blog, Cannabis Law, Cannabis Law and Compliance, Cannabis News, Legalization, Politics

Pennsylvania cannabis legalization gains support from ex-law enforcement Senator

With renewed efforts in the Pennsylvania cannabis legalization fight, the movement has gained an unlikely ally; a former U.S. marshal who spent years fighting the drug war.

Republican Senator Mike Regan is working on new legislation to legalize Pennsylvania cannabis. The legislation would legalize cannabis for recreational use and permit adults age 21 and older to legally purchase and possess a “personal amount” of cannabis. Regan thinks that amount will most likely be an ounce.

“I think it’s inevitable,” Regan said. “It’s common sense to think we’re going to do it at some time and it should be done smart.”

While still a work in progress, Regan sent a memo to his fellow lawmakers stating, “As chairman of the Senate Law and Justice Committee and a former member of law enforcement, rather than sit idly by and allow others to shape the legislation, I am stepping up to be a leader on the issue, as I did on medical marijuana.”

This is a much different approach compared to other Republicans in the state who are fighting legalization. Instead of joining the resistance against Pennsylvania cannabis legalization, Regan is attempting to take charge so Republicans can truly have a say in what happens.

Pennsylvania Governor Tom Wolf has expressed his support for broad cannabis legalization on numerous occasions. Along with Lieutenant Governor John Fetterman, a staunch advocate for cannabis legalization, the two believe creating a legal cannabis marketplace can generate more money for the state to address social justice issues, mainly the convictions and criminal records people get for consuming or possessing cannabis.

Regan used the examples of New York and New Jersey, two neighboring states that have legalized cannabis for recreational use as reasoning for legalizing Pennsylvania cannabis. “We will soon experience border bleed with Pennsylvanians contributing to the tax base of those states and helping to pay for their roads and bridges, while the commonwealth deals with the implications of purchases brought across state lines without the revenue or resources in our legal system to address them,” Regan said in his memo.

However Regan isn’t the first Republican in Pennsylvania to push forward recreational cannabis legislation. Senator Dan Laughlin (R) joined Democrat legislators in pushing for cannabis legalization in February of 2021.

Additionally, two Democrat House Representatives, Jake Wheatley and Dan Frankel, introduced a bill to legalize Pennsylvania cannabis just last week. However the remaining Republicans in the legislature continue to express their disapproval of broad cannabis legalization in the Keystone State.

Many Republicans have said that the state should continue to focus on medical cannabis only, and that recreational cannabis legalization is not a priority for them. Their reasoning is that medical cannabis has yet to prove successful enough to warrant full blown legalization. However, medical marijuana sales in Pennsylvania topped more than $900 million over one year during the COVID-19 pandemic, and could soon see $3 billion in total sales with just a few operating years under its belt.

Pennsylvania is outpacing other medical marijuana states by huge margins, showing that interest in Pennsylvania is at an all time high. Regan estimates that recreational cannabis could generate an additional $1 billion a year in revenue. That revenue could be used to support law enforcement, fight gun violence, provide after school programs for disadvantaged youth and free up motor license funds that are currently being used to fund state police to help fund road and bridge improvements instead.

The bill would establish a regulatory control board, remove penalties for possession and use by adults, allow the legal purchase of firearms regardless of cannabis use, among many other features.

As an ex-law enforcement officer, Regan is running against the grain in his efforts that helped shape the medical marijuana legislation in the state, as well as his new support for recreational cannabis.

“As a former United States marshal, I had the opportunity to work in federal law enforcement at the height of the drug war, so I know the seriousness of drug use,” he said in his memo. ”But I am also cognizant that there has been a significant decline in arrests and prosecutions for personal use amounts of marijuana in recent years. Our law enforcement agencies and justice system do not have the manpower or time to handle these minor marijuana offenses that clog our courts and produce little return.”

Instead, Regan wants law enforcement to focus more on the large scale drug importers that deal heroin and fentanyl, which fuel the massive opioid crisis that has been impacting Pennsylvania for years, killing thousands of Pennsylvanians.

Pennsylvania Cannabis Legalization Bill Introduced

by Travis C | Sep 29, 2021 | 420 News, Blog, Cannabis Business, Cannabis Law, Cannabis Law and Compliance, Legalization, Politics

Rep. Jake Wheatley (D) has introduced a new bill that would legalize Pennsylvania cannabis for adult use. Previous bills have been shot down by the state legislature, but HB 2050 has some revisions that Wheatley is hopeful will help it get through to the Governor’s desk.

Governor Tom Wolf has expressed numerous times his support for broader Pennsylvania cannabis legalization, however the Republican led state legislature has rejected every attempt so far.

Pennsylvania House Bill 2050

House Bill 2050 creates a dynamic permitting structure for growers, processors and dispensaries, allowing any size company to enter the legal cannabis market. This includes lowering initial application and permit fees to alleviate financial barriers. Renewal fees will be based on gross revenue; the higher a company’s gross revenue the higher their renewal fee, which is the fairest way to do it.

Among other things, my bill provides for the Commonwealth Reinvestment Fund (CRF). Specifically, the CRF will fund the following initiatives;

Minority and Women Grant Program to help disadvantaged populations benefit from this new industry,
Student Loan Reimbursement Program,
Mixed Income Housing Program,
After-School Programs,
And a public information campaign to educate the public on adult-use cannabis

Under this legislation, a wholesale tax of 10% will be levied on business to business transactions. Growers and processors who partner with an existing Pennsylvania Farm will not be required to pay the wholesale tax. Consumers will see an excise tax (in addition to sales tax) that will start at 6% for the first two years, 12% for years three and four, and then 19% for each year after.

Wheatley’s reasoning for pushing HB 2050 is similar to that of legislators in other states that have moved forward with cannabis legalization. The war on drugs has negatively impacted minority communities that most, and Pennsylvania cannabis legalization would give priority to those most disproportionally affected.

The bill also includes a “clean slate” provision that would help those charged with crimes under the Controlled Substances Act related to cannabis lessen or even wipe prior convictions. In a press conference Tuesday, legislators also used the example of 2019’s vape epidemic — a controversy that impacted over 2,000 consumers — as a reason for legalizing, stating that keeping cannabis illegal only helps the illicit market thrive.

The Pennsylvania state legislature has yet to hold a vote on HB 2050. If passed, Pennsylvania would join 16 other states that have legalized adult-use recreational cannabis.

Pa. cannabis legalization remains unlikely as neighboring states go for it

by The Real Dirt | Apr 21, 2021 | 420 News, Blog, Cannabis Law, Legalization, Politics

New Jersey. New York. Virginia.

One by one, Pennsylvania’s neighbors are moving to legalize recreational cannabis for adults. There’s majority support for doing the same thing here: A March poll from Franklin & Marshall College showed 59% support among registered voters for legalization.

And after years of saying he wouldn’t endorse such a move, Gov. Tom Wolf changed his position in 2019 and has committed to signing a bill if it reaches his desk.

But in order for that to happen, the idea would need to gain backing among the Republican lawmakers who control both the state House and Senate.

House Speaker Bryan Cutler (R., Lancaster) opposed medical cannabis when it passed in 2016 and said in 2019 that legalization wasn’t the “right move in helping the thousands of Pennsylvanians who are battling drug addiction.”

More recently Cutler’s chief of staff told PennLive it wasn’t a priority, as the state continued to grapple with the coronavirus pandemic, while a spokesperson for House Majority Leader Kerry Benninghoff (R,., Centre) told the York Daily Record in February there isn’t support within the caucus.

Senate President Pro Tempore Jake Corman (R., Centre) in 2018 called the idea “reckless and irresponsible,” though last fall he signaled the chamber was open to vetting a proposal — but not at that time.

Democrats in the chamber, as they have in past sessions, are still pushing for legalization, but with one major difference this spring — a Republican sponsor.

That lawmaker is Sen. Dan Laughlin of Erie County. When asked by Spotlight PA why he thinks Pennsylvania hasn’t moved toward legalization, he said many of his colleagues represent districts that don’t support recreational cannabis.

“So, you know, I don’t hold it against any fellow Republicans for not wanting to just jump out of the gate and co-sponsor the bill, because, for the most part, I think they’re trying to represent their districts,” Laughlin said.

A report based on observations and anecdotes from Lt. Gov. John Fetterman’s 2019 listening tour of Pennsylvania’s 67 counties found that people were concerned about “an increase of people driving under the influence.” One working paper by a group of economists found that fatal crashes involving a driver who tested positive for THC had increased nationwide but did not appear to be related to legalization.

People, according to Fetterman’s report, were also concerned about “cannabis acting as a ‘gateway’ drug.” That’s a long-standing anxiety and complex topic. While some people who use cannabis may also use other drugs, there isn’t definitive proof that cannabis is the cause.

The issue is simple to Tsehaitu Abye, a cannabis entrepreneur and founder of Philadelphia’s Black Dragon Breakfast Club, a cannabis marketing firm: Once the financial scales tip in favor of legalization — rather than the industries that oppose it — it will happen.

Read Full Story from Spotlight PA

Bipartisan Pennsylvania cannabis legalization bill emerges from Senate

by The Real Dirt | Feb 25, 2021 | 420 News, Blog, Cannabis Law, Cannabis Law and Compliance, Legalization, Politics

Bipartisan Pennsylvania cannabis legalization bill has been introduced

A bipartisan duo of senators introduced a measure Wednesday to legalize adult use cannabis in Pennsylvania.

It’s the first time a Republican member of the chamber has cosponsored the proposal – typically endorsed solely by Democrats, including Gov. Tom Wolf and Lt. Gov. John Fetterman.

“That’s kind of the elephant in the room, if you will,” said Sen. Dan Laughlin, R-Erie. “I believe in solving problems, and adult use cannabis is no more harmful than liquor. I’m not afraid to run a bill that doesn’t fit our party’s stereotype.”

In addition to regulating and taxing the drug for public consumption, Laughlin and co-sponsor Sen. Sharif Street, D-Philadelphia, said their proposal includes a provision that would erase nonviolent cannabis convictions and decriminalizes the drug “up to a certain point” – an important step forward for social justice.

“Ordinary folks of color know they are more likely to get prosecuted for doing this,” Street said. “And yeah, it is making history if people won’t [be prosecuted] anymore.”

An analysis from the American Civil Liberties Union concluded that cannabis arrests account for more than half of all drug-related arrests in the county. Eight in 10 of the 8.2 million arrests studied between 2001 and 2010 were for possession of small amounts. Black users are also nearly four times more likely than white users to be arrested for cannabis, the ACLU said.

“This has been a 180 change in opinion for me,” Laughlin said. “I’m not a fan of the product. I don’t use it. I don’t think it’s great if people use marijuana. I know that seems a little odd … [but] I’ve realized some of the social damage we’ve done to communities of color over these minor offenses, and that really got my attention.”

Laughlin also said testimony from the Independent Fiscal Office last week that estimated tax revenues from cannabis sales could approach $1 billion further piqued his interest.

“The final straw was a conversation I had with one of my kids … he told me he could have a bag of weed delivered to the house in under an hour and that’s better service than Amazon,” he said. “I realize anyone in Pennsylvania that wants to smoke marijuana is probably already doing it, so regulating it is the responsible thing to do.”