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Why “Decriminalizing” Weed Isn’t Good Enough

A conversation with Marijuana Policy Project Executive Director Steven Hawkins about the final stretch toward legalization.

Marijuana activists hand out free joints to vaccinated New Yorkers on April 20, 2021 in New York City. (Photo by Angela Weiss / AFP) (Photo by ANGELA WEISS/AFP via Getty Images)
Marijuana activists hand out free joints to vaccinated New Yorkers on April 20, 2021 in New York City. ANGELA WEISS/Getty Images

The end of marijuana prohibition has never seemed closer at hand. The issue enjoys widespread public support, with blue and red states alike greenlighting recreational use, either through ballot initiatives or, as in the recent case of New York, regular old legislation. Senate Majority Leader Chuck Schumer has turned into a pro-pot crusader, and has promised to unveil a bill to end the federal ban “shortly.” Meanwhile, on Monday, the House of Representatives passed the SAFE Banking Act, which would solve one of the cannabis industry’s biggest current challenges by allowing banks to do business with marijuana businesses in states that have legalized. Because THC is still federally banned, most large financial institutions won’t deal with dispensaries. And while many have found various workarounds—like partnering with regional banks or credit unions and finding roundabout ways to take debit or credit card payments—many still do business largely in cash. The bill passed with an overwhelming bipartisan majority, 321 to 101.

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Yet there are big uncertainties about what happens next. While plenty of House Republicans are warming to weed, it’s unclear how much support exists among the GOP for ending prohibition. Then, there’s the question of whether Congress might try to decriminalize marijuana or fully legalize it. To many that sounds like a befuddling semantic issue, but if you ask most pot advocates, it’s a distinction with a difference. Decriminalization would end federal enforcement of marijuana prohibition, allowing each state to regulate the industry for itself or ban sales entirely. Federal legalization would create a full regulatory framework that would allow cannabis to grow into a normal, nationwide industry with consumer-protection laws and interstate shipping. President Joe Biden, for his part, has said he supports decriminalization. Possibly in deference to the president, Schumer and his fellow Senate Democrats have rhetorically blurred the difference a bit, saying his bill will “decriminalize” marijuana at the federal level, while also creating a framework for taxing and regulating it.

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In honor of 4/20, I called up Marijuana Policy Project Executive Director Steven Hawkins to ask about the state of play in Congress and the world of weed. A veteran of the NAACP Legal Defense Fund and other civil rights organizations, Hawkins is now helping to lead the final push toward the end of prohibition. One of this main points? For the emerging weed industry, decriminalization isn’t good enough. The conversation has been edited for length and clarity.

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Jordan Weissmann: First off, happy 4/20. It looks like the House of Representative gave you guys a gift yesterday with the passage of the SAFE Banking Act.

Steven Hawkins: Yes! A day early, but we’ll take it.

I want to start off talking about this before we get to the broader issue of legalization and where it’s headed. Tell me exactly what the SAFE Banking Act does and why it’s so important for the industry right now.

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Sure. The SAFE Banking Act, in its simplest explanation, normalizes banking for the cannabis industry, meaning that any cannabis business, large or small, will be able to be a customer, just like any other businesses in the United States and have the full suite of services that a bank offers.

Do most cannabis businesses not have access to normal banking right now?

The bigger operators have arrangements with regional banks. They pay an exorbitant amount for a checking account. I recall one regional bank in Massachusetts was charging $5,000 a month. The larger businesses are able to pay those extra costs. The smaller operators have really suffered.

The other critical piece to all of this, and it’s hugely important, is that a lot of the small business operators who end up getting licenses through social equity programs—so minority business owners, women business owners, people operating smaller businesses—they’ve been unable to get the financial resources to grow their businesses. They haven’t been able to get a typical small business loan from the bank. And that’s not an issue for a multistate operator, a large business that’s raising, you know, a hundred million in a private raise. [The cannabis industry has become popular with venture capitalists and angel investors.] But for the small equity applicant who’s won a license, who’s trying to run a small cannabis business, they have been crippled. So this will have a tremendously huge impact for those smaller business operators and particularly people of color.

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The House of Representatives has passed the SAFE Banking Act previously. It died when Mitch McConnell was the majority leader, Republicans weren’t particularly interested in passing it, or at least he wasn’t particularly interested in passing it.

He wasn’t interested in passing it!

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Sherrod Brown, who is the head of the Senate Banking Committee, has said that he is not interested in passing the SAFE Banking Act unless it is also paired with some sort of criminal justice reform. Does that concern you? Do you think that this actually has a chance of passing under the current Senate?

Uh, yes. There’s just overwhelming bipartisan support for the SAFE Banking Act. You know, with the House vote last night, that was over 50 percent of the Republicans in the House. If Sen. Brown wants to see provisions connected with the expungement of records, or redressing the harm done through criminal punishment for cannabis, you know, it’s certainly something that we would welcome and it’s something that should garner bipartisan support in the Senate.

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As someone who had worked a bit on the First Step Act and saw people like Sen. Grassley and Sen. Lee and others come to support that—I mean, this would be right within someone like Mike Lee’s wheelhouse to support something like criminal justice reform with respect to cannabis. I actually think that that could work.

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The SAFE Banking Act is a huge priority for the marijuana industry because the lack of banking services is arguably the main issue that prevents dispensaries from operating like normal businesses. What else is left on its to-do list, beyond straight-up federal legalization?

I mean, certainly, we are awaiting the Booker/Schumer/Wyden bill, which would be a comprehensive bill that would not only deschedule cannabis and end federal prohibition, but also it’s our hope and expectation that that bill will also establish the federal regulatory overlay.

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Schumer keeps saying that the bill is coming soon, and people have been joking that it’s sort of a hurry-up-and-wait approach. Are you nervous at all about what’s actually going to be in the bill?

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Not worried. I mean, curious to see how the bill goes in developing the real pathway forward. Because just descheduling is insufficient, right? There has to some federal apparatus in place and there’s multiple agencies that would likely have some jurisdiction over cannabis. So I’m more curious just to see how the bill handles all of that.

Joe Biden has said he wants to decriminalize marijuana. He is not for full-on legalization. That’s a distinction he made repeatedly during his presidential campaign. Democrats in Congress have said they’re more interested in full legalization, but the difference between those two things is kind of murky, right? What is the difference between decriminalization, in your view, and full-on federal legalization? Why is it not sufficient for the federal government just to deschedule and say it’s not going to criminalize the sale or consumption of marijuana in states that have legalized it?

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Let’s say federal decriminalization means just what you just said—federal government deschedules, there is no longer the use of federal resources to go after enforcement, and that it’s really left to the states just like alcohol was. Why that’s insufficient is that for any product sold in the United States, there has to be protection for the consumer. There has to be guardrails put in place. If any use of cannabis has a medicinal quality, that requires FDA jurisdiction. Adding cannabis into a food product will ultimately require the FDA to have a role in an interstate commerce setting. So all of this just begs for federal authority. We saw this with hemp, right? Where the Farm Bill passes and all of a sudden hemp is legal. There were no rail tracks laid for what that would mean for the FDA, and they’re still figuring all that out. CBD, it’s sold in a gas station, but it still is widely unregulated. And we want to avoid that with cannabis.

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You guys want to avoid the Wild West that we have with CBD oil where it’s sold online and you have no idea what you’re really getting. But to play devil’s advocate, it seems like the states have done a pretty good job regulating and overseeing THC and cannabis. Is the issue that you want lay the groundwork for normal interstate shipments, for national chains to open up?

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Certainly, 80 percent of the regulation, just to throw a number out there, would certainly still be at the state level, just like we see with alcohol. But yes, part of interstate commerce, as well as global commerce—I mean, cannabis is on its way to being a huge global industry as well. All of that requires federal guidance.

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So it sounds like decriminalization would allow businesses to thrive on a state level, but there’s sort of a limit to how big they can get. For cannabis to become a normal national industry, you need full legalization with federal regulation. I mean, couldn’t that end up worrying some kind of old-school legalization advocates, the ones who want more small-scale localism in the pot industry?

Well, as there already is in the industry, there are going to be larger operators and larger brands, but there’s going to be niche areas, too. You know, some people are going to want their cannabis grown in Mother Earth and sun-kissed and all of that. Some people are going to want it to have been organically farmed. Like what we’ve seen with the beer and alcohol industry, we will see with cannabis, we’re going to see niche markets and places for smaller players. But let’s say you’re a smaller player and you have your sun-kissed cannabis and grown it in state X—

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You’re growing in Humboldt County, the Napa of weed.

Right. And you want the good citizens of New York to be able to sample and enjoy your product. That’s not going to happen without the federal government being involved.

So let me ask the all-important question: Do you think there is a path to full legalization this year, or next? Is there a route to 60 votes in the Senate?

In theory there certainly should be, right? You have a number of Republican senators now who represent states where the electorate has fully legalized. You have senators, who’ve been concerned about justice reform, and we still have 650,000 people arrested every year for cannabis offenses. So, so there should be right? It certainly will be a major undertaking, but I don’t think it’s impossible.

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Who would be your most important Republican allies in the Senate as you see it now?

It’s really hard to fully predict that. What I can say is that those Republican senators coming out of states like Alaska and Montana and South Dakota, just to name a few states, that are red states that have legalized, there are going to be business interests within those states and consumer interests that hopefully will be heard. So that’s the work that needs to be done in the Senate. And then the question you haven’t asked is whether Biden is with us on such a bill, if it got to his desk. And my view is that this president, you know, his brand is bipartisanship. I would think that if we could get him a bill that’s bipartisan, that has Democratic and Republican support for legalization, he’s signing.

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So what you’re telling me is that the fate of legalization right now rests on the shoulders of Lisa Murkowski and Steve Daines.

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Well, no, not only them. I mean, we also have the dynamic of states that continue to legalize, right? We’ve had seven states legalize in the last five months, which is just record-setting. Four on Election Day and then three others just in this last couple of months. We could still see Connecticut and Rhode Island this year. We could probably see three or four states legalize through a ballot effort next year. This is becoming a matter of major commerce in the United States, and it’s an industry that is rapidly growing. The U.S. has to think about its market share globally. You have Canada having legalized, Mexico is seriously moving in that direction. So I would not be surprised if we start seeing some other senators that have been quiet you know persuaded to support this emerging industry.

You can’t fight the inevitable forever. That’s the message.

That is the message, right? Exactly.

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