• November 25, 2020

You Heard Wrong: The Election Didn’t Change Minds on Marijuana in Washington

 You Heard Wrong: The Election Didn’t Change Minds on Marijuana in Washington

Sen. Mike Rounds leaving a meeting with Vice President Mike Pence and Senate Republicans. Photo by Matt Laslo

WASHINGTON, DC — By now you’ve likely heard it’s a new day in America for marijuana legalization. You’ve heard wrong — at least when it comes to Congress and the federal government. 

Even after conservative and liberal states alike affirmed ballot initiatives during the election legalizing marijuana just a couple weeks ago, Republican senators are still resisting this new reality.

Take South Dakota Sen. Mike Rounds. You don’t become a two-term governor and then US senator without having a finger on the pulse of your voters. 

“I think they should stop dicking around”

Rep. Sean Patrick Maloney, discussing the Senate (& marijuana)

On Election Day, the first-term Republican senator witnessed his constituents defy (utterly outdated) conventional political wisdom and make history by simultaneously approving recreational and medicinal marijuana in one electoral swoop. Yet Rounds seemed to say he knows better than the 54 percent of his constituents who supported recreational cannabis, along with the full 70 percent who voted to legalize medicinal marijuana during the elction.

“Very, very disappointed,” Rounds told The News Station at the Capitol, before issuing a thinly cloaked warning to entrepreneurs in his state. “My opinion is that the businesses that are getting involved in this should know full well that this is very high risk versus reward. This is still a case of where, at the federal level, you got serious criminal issues regarding marijuana, and anybody that’s involved in this has got to recognize those dangers.”

When I asked Rounds if he’d oppose bipartisan reforms being pushed — like those to enable locally legal, yet federally prohibited, businesses to access the US banking system — he twisted himself into a political pretzel.

“Look, in the Senate you never say you’ll never do something, but I’m still not interested in moving forward with anything along that line,” Rounds said. “For businesses that are involved in this, they have to understand very clearly that there are some real risks. At this point, the federal law is pretty clear about the illegalities.”  

Rounds is no political novice, but he seems to be slipping. He’s not alone. Sen. John Thune — his state’s senior senator, who also happens to be seven years his junior in addition to being the Senate majority whip — doesn’t love, or even get, what his South Dakota did during the election. 

This alone from a party leader should be shocking, because it’s not new, novel, or even noteworthy. Any way, it’s verified by Gallup which just documented a new milestone in history.

History aside, Thune’s a younger party leader. He’s sharp and always quick with a methodical, if long winded, answer. 

Whether he knows it yet, his job description in Washington changed on election night. He hints at clearly seeing the new world thrust upon him, like he’s open to giving his soon-to-be locally legal marijuana firms the ability to formally join the financial system. But he’s not their champion. 

“Well, that was an interesting outcome; not one that, I guess, I would have expected,” Thune told The News Station last week. “We’ll see how this plays out. Obviously, that’s an issue we’re gonna have to address.”

In his defense, when the whip gave The News Station that response he was flanked by his security detail after exiting a black SUV on his way to cast a vote at the Capitol. We still have no idea what it means though (“we’ll see” or “have to”?) or what his commitment level ultimately is. 

Either way he’s a party leader — one in line to become leader-leader one day, mind you — and he didn’t have an answer for something his voters, along with millions nationwide, have now overwhelmingly demanded during the election. Whatever Thune really thinks, Sen. Rounds isn’t even there yet. 

“We don’t simply want to transition cartel money — laundered money — into banks”

Sen. Crapo

It’s peculiar, in part, because Rounds is a former insurance and real estate executive and has been a member of the Senate Banking Committee for some time. That means he’s either playing ostrich or that he’s intimately acquainted with the federal quandary his neighbors will soon face. Because from that perch he’s been a part of hearings and privy to documents, research, and data not easily accessible to the rest of us; even senators not on his committee.  

Even before South Dakota senators had to regularly field questions on marijuana (which even they haven’t realized is now a regular part of their job description…), the Senate had been sent legislation to address these issues during the election that were quashed by inaction. 

“I think they should stop dicking around,” Rep. Sean Patrick Maloney (D-N.Y.) told The News Station earlier this fall of the Senate (and specifically its Banking Committee). “Help form a serious solution to bring cannabis out of the shadows. Decriminalize it, regulate it properly, help the states with additional revenue, and stop treating people like criminals who can’t responsibly use marijuana.”

This has been a problem that’s faced federal lawmakers since 1996, when California legalized medicinal cannabis in the face of federal prohibition. Now that it’s recreationally legal in 15 states and the nation’s capital (while also medicinally legal in more than half of the nation) the patience of proponents like Maloney has worn thin.

“They should stop jerking around, and do it,” he told The News Station.

That frustration comes from the federal government’s continued habit of interjecting uncertainty into an arena where the American people have spoken clearly about in the election.

The Senate has refused to bring up the SAFE Banking Act, which soared through a House vote with 321 supporters, including 91 Republicans. None of this is news to the Senate Banking Chair, Mike Crapo of Idaho.

He’s been worried about, for lack of a better term, a blanket amnesty for the billions of dollars in cash floating around the economy. Officials have known for decades that cartels are still flourishing here in the states. Instant access to the financial system for now-legal cannabis firms raises fears of blood-stained cash flooding banks.  

“We don’t simply want to transition cartel money — laundered money — into banks,” Crapo told The News Station earlier this fall. “We have a cash economy and it is a breeding ground for money laundering and for cartels to increase their activity in the United States, rather than to be controlled.”  

Nothing’s changed in Crapo’s thinking since that extended talk earlier this fall in the Senate Carriage Entrance (called that because it’s where horses used to drop lawmakers off at the Capitol; it’s now where lawmakers feed carrots to reporters…), according to his press staff.

Instead of really ever contemplating taking up, or even debating, House Democrats’ bipartisan marijuana banking bill as a stand alone entity, Crapo is still pushing his four-point plan on the subject. While he’s a tad old school and admits he has a little bit of the trading game in his bones on this issue, to him, for now, Speaker Nancy Pelosi’s bill is too simplistic and limited. Thus, for now, he’s publicly reiterating his dream proposal.

Crapo wants senators to approve more intense oversight of monetary transactions related to cannabis, something akin to a national gun registry, where every transaction would be federally tracked. His plan also addresses interstate commerce issues, though they currently don’t exist, because interstate commerce is currently banned. It works on how to deal with credit card payments — which are explicitly interstate because the most commonly used credit card companies are all national. It also addresses  health issues, namely kids getting access to marijuana products, even as every state that has legalized marijuana already has regulations in place to forbid just that.

“What I proposed is that we basically set sort of a baseline of certain dosage limits and who can be marketed and how, and set up some studies so that we can get the science behind what we’re talking about,” Crapo told The News Station.

“So making it bigger?” I inquired.

“Yeah,” Crapo agreed, momentarily. “No. I wouldn’t say that. We’re putting serious parameters around how we’re going to deal with it, and then let the states step in. If we have a baseline level, then in order to get the safe harbor, the states would need to step in and do their own standards within a certain period of time.”

Shortly into the interview, Crapo (perhaps accidentally) explained why the massive government program he’s envisioning isn’t actually needed.

“I don’t think anybody is talking about legalizing or selling extremely high-dose gummy bears to grade-school kids,” Crapo said without realizing he also was floating a non-existent problem. “So we’ve got to have some health standards.”   

“It’s crystal clear where the American people are on the issue”

Sen. Menendez

In the Senate, the hoops and hurdles being erected — or concocted, in the case of health standards for a non-existent problem — bear no resemblance to reality. The nation’s biggest financial institutions are lined up and ready to get in on this burgeoning economic sector.

“The SAFE Banking Act in and of itself could be more of a game changer than people realize,” Matt Hawkins, the founder and managing principal of Entourage Effect Capital (a firm literally banking on cannabis) told The News Station. “It just takes one little thing for the pin to drop for everything else to follow, and that’s our strategy right now. You know, build scale within our existing 66 companies we’ve invested in.”

Hawkins, along with domestic and global firms, venture capitalists, and a plethora of others, is just waiting for the intransigence of the Washington political class to catch up with the reality of what voters have already embraced during the election.

“That next wave of capital is not going to be like what we’ve seen before. It’s going to be 50, 60, 70, 80 [times] that amount,” Hawkins predicts.

As the Senate decides which America it wants during the election — the one voters want or the one the political class has propped up since the 1970s — the federal government isn’t too worried. That’s because the Feds are already reaping much needed tax revenue based on Section 280E of the tax code.

“Money is moving through the [federal] system on a daily, hourly, minute basis through wire transactions involving municipal, state, and local banks and their clients and their client vendors,” Hawkins says. “And so it’s almost like the federal government is complicit.”

For many Democrats, even those who weren’t previously pot-proponents, that’s just ludicrous.

“If we’re going to have states engaged in the process of selling marijuana legally,” Sen. Bob Menendez (D-N.J.) told The News Station, “then we should not have an underground cash system that leaves itself for all types of abuses, both on the revenue side, on the corrupt side, on all of the elements. So it should be banked.”  

That’s why the moans and groans from Republicans from states where voters now overwhelmingly legalized cannabis in the election are falling on unsympathetic democratic ears (and yes, that’s supposed to be a small ‘d’).

“It’s crystal clear where the American people are on the issue,” Menendez says. “Now Congress has to follow up and make sure that we, at least, have a banking system that guarantees its viability.”

Matt Laslo

Matt Laslo

Based in Washington, Matt Laslo is a veteran political and music reporter. Since 2006, he’s been a contributor with VICE News, VICE News Tonight HBO, The Daily Beast, Rolling Stone, Playboy, Billboard, The Atlantic, NPR, etc. He’s taught journalism at Boston University (MA) and The University of Maryland (BA). And he teaches political communications at The Johns Hopkins University MA in Government and Public Policy program. He can be found on most all social media platforms as @MattLaslo.

Subscribe To Our Newsletter

 

Join our mailing list to receive the latest news and updates from our team.

You have Successfully Subscribed!