Cannabis Musings - April 27, 2023
Friends, if I’m counting correctly, an iteration of the SAFE Banking Act was filed in Congress for the ninth time earlier this week. This comes right on the heels of the Senate failing to advance legislation to bolster research into therapeutic cannabis use by veterans, in a cloture vote blocked by a group of senators that, in a Kafka-esque turn, included co-sponsors of the new SAFE Banking Act. You want me to try to explain that? Freg mich becherim! (translated: “Even if you excommunicate me, I can’t give you an answer!”)
More remarkably, the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), a division of the same Department of Justice that also houses the Drug Enforcement Agency (which maintains the schedule of controlled substances), and potential candidate to oversee federal regulation of cannabis (if we ever see legalization), has reportedly slightly softened its stance on cannabis for new employees. Their policy went from this:
"Individuals applying for ATF employment who are currently involved in illegal drug activities or substance abuse are ineligible for hiring. In addition, past involvement in illegal drug activities or misuse or abuse of substances also may disqualify an applicant from consideration for hiring. … Minimal and limited previous drug activity or substance misuse or abuse that does not initially disqualify an applicant from consideration for hiring under the ATF drug policy guidelines may still be considered as unfavorable information for purposes of favorably adjudicating the applicant’s background investigation."
to this:
"Use within a state/locality that has legalized marijuana use or use for legal medical purposes, is still considered illegal by federal law. The following activities are automatically disqualifying:
Distribution, sale, or transport for profit, cultivation, or manufacturing of marijuana without state/local legal authorization while in a position of public responsibility."
That’s a bisel tsetumlt, but what it seems to say is that a candidate who’s currently, shall we say, partaking in certain cannabis-related activities in accordance with state law, won’t automatically be disqualified from a job with the ATF.
In other words, one of the major agencies of the federal government tasked with enforcing federal drug laws that say that cannabis is completely and totally illegal might nonetheless potentially allow its employees to break that very same federal law (by complying with state law) and still keep their job enforcing said federal law.
Ironic, right?
As we’ve talked about before, I’m not an optimist on SAFE Banking or any other federal legislation benefiting the cannabis industry happening any time soon. I hope to be proven wrong, but to date my cynicism reigns supreme (follow me on Twitter @_Marc_Hauser_ if you want to watch me telling people on the internet that they’re wrong about things like SAFE Banking and uplisting).
On the other hand, I think that these more subtle, under-the-radar changes like this easing of the ATF’s hiring policy are much more promising than waiting on members of Congress who are subject to the passions of their base that shows up to vote in primary elections. There’s been a subtle, yet profound shift in attitude and acceptance on a federal bureaucratic level, the same bureaucracy that maintains the list of controlled substances, interprets and enforces IRS Code 280E, and regulates stock exchanges.
These paradoxes (two in one week!) highlight the challenge of navigating, let alone predicting, cannabis policy. Perhaps someday federal and state law will come into alignment and provide the industry with some stability. Until then, these Cannabis Musings remain observant.
Be seeing you!
Hauser Advisory provides advice and strategy on business lifecycle events and cannabis industry navigation, tapping into a deep, national network and twenty-five years of dealmaking and capital markets experience.
© 2023 Marc Hauser and Hauser Advisory. None of the foregoing is legal, investment, or any other sort of advice, and it may not be relied upon in any manner, shape, or form.