Marijuana legalization: Too much cash and other problems Congress needs to resolve

The growing parade of states with legal marijuana continues to march forward, with New York, Virginia and New Mexico recently joining 15 other states that have legalized cannabis for recreational use. Most others have statutes allowing medical marijuana.

And every one of them conflicts with the federal Controlled Substances Act.

The act defines marijuana as a dangerous drug with no medical value. Under an illusion of sovereignty, states that legalize cannabis are, in effect, licensing people and businesses to technically commit federal felonies.

Despite this long-running state vs. federal clash, public support for marijuana legalization has reached a 50-year high. A Gallup poll last fall found that 68% of American adults favor the policy. Clearly, this is a movement, not just a moment.

We are members of a task force convened by the Council on Criminal Justice to create a roadmap for federal action toward a fairer and more effective justice system. One issue that quickly drew our attention is this untenable conflict between state and federal marijuana laws.

Neither a federal crackdown on pot nor a hands-off approach is advisable — but Washington must act to resolve the legal conundrum. Otherwise, with each state devising its own rules, the expanding cannabis industry will continue to operate without consistent guardrails and guidance for testing, labeling and marketing.

 (Photo: Getty Images)

This uneven regulatory environment has allowed multiple problems to fester. One is the industry’s vexing challenge related to money. Some banks are unwilling to work with businesses that operate in defiance of federal law. That creates problems with lending, checking accounts, and credit cards — and exposes cash-based cannabis companies to significant safety risks.

Ensure equity for minorities

Reform also must address the barriers facing cannabis entrepreneurs in communities of color, which suffer from a heavy legacy of disproportionate enforcement of drug laws. While license set-asides are part of the answer to improving equity in the booming industry, we also need policies that enable small, minority-owned cannabis establishments to endure as corporate titans inevitably increase their market share.

The time is ripe for change. With their razor-thin majority in the U.S. Senate, Democrats are eagerly pursuing comprehensive cannabis reform. Senate Majority Leader Chuck Schumer of New York is leading the charge, and said last week that he was preparing to move a bill.

But he’ll need more than enthusiasm. Such major legislation likely would require 60 votes to pass — and acquiring those 10 Republican votes represents a daunting hurdle.

In fact, corralling enough votes for a single, all-inclusive bill might prove nearly impossible. But a narrower, more nuanced accommodation from the federal government could still provide confidence to states, stabilize the market, and help address many health and safety problems.

And recognition of state sovereignty could make the whole concept more palatable to Republicans.

Create federal waivers

But what sort of federal accommodation? Guided by the work of drug policy experts such as the late Mark Kleiman, our task force recommends that Congress and the Biden administration develop a waiver process for states that have legalized the use and sale of marijuana. Each state that signs on would be assured that any cannabis business operating legally under its federal waiver would be shielded from civil or criminal liability.

The first step would be legislation directing the U.S. Departments of Justice and Health and Human Services to work with other federal and state stakeholders to create a framework for the waiver system. We suggest that a task force of these stakeholders be assembled to ensure the federal framework:

►Creates regulations for states on potency and allowable product types, as well as public health standards covering testing, marketing and child-resistant packaging

►Sets clear guidelines for banks with the aim of reducing reliance on the cash-based model

►Provides guidance to help law enforcement address problems with illicit markets

►Directs the National Institute on Drug Abuse to expand support for cannabis research to target products sold in stores

As things stand, the states are captive in what amounts to a massive experiment on the powers and limits of federalism. With public support for legal cannabis broad and growing, it’s time to end that experiment and make the illusion of state sovereignty a reality.

Michael A. Nutter is the former mayor of Philadelphia, former president of the U.S. Conference of Mayors, and a member of the Council on Criminal Justice Board of Trustees. John Tilley is the former Secretary of Kentucky’s Justice and Public Safety Cabinet, former chair of the Kentucky House Judiciary Committee, and a Senior Fellow at the Council on Criminal Justice.

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