[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]
UNLOCKED POTENTIAL? SMALL BUSINESSES IN THE CANNABIS INDUSTRY
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HEARING
BEFORE THE
COMMITTEE ON SMALL BUSINESS
UNITED STATES
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTEENTH CONGRESS
FIRST SESSION
__________
HEARING HELD
JUNE 19, 2019
__________
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Small Business Committee Document Number 116-028
Available via the GPO Website: www.govinfo.gov
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HOUSE COMMITTEE ON SMALL BUSINESS
NYDIA VELAZQUEZ, New York, Chairwoman
ABBY FINKENAUER, Iowa
JARED GOLDEN, Maine
ANDY KIM, New Jersey
JASON CROW, Colorado
SHARICE DAVIDS, Kansas
JUDY CHU, California
MARC VEASEY, Texas
DWIGHT EVANS, Pennsylvania
BRAD SCHNEIDER, Illinois
ADRIANO ESPAILLAT, New York
ANTONIO DELGADO, New York
CHRISSY HOULAHAN, Pennsylvania
ANGIE CRAIG, Minnesota
STEVE CHABOT, Ohio, Ranking Member
AUMUA AMATA COLEMAN RADEWAGEN, American Samoa, Vice Ranking Member
TRENT KELLY, Mississippi
TROY BALDERSON, Ohio
KEVIN HERN, Oklahoma
JIM HAGEDORN, Minnesota
PETE STAUBER, Minnesota
TIM BURCHETT, Tennessee
ROSS SPANO, Florida
JOHN JOYCE, Pennsylvania
Adam Minehardt, Majority Staff Director
Melissa Jung, Majority Deputy Staff Director and Chief Counsel
Kevin Fitzpatrick, Staff Director
C O N T E N T S
OPENING STATEMENTS
Page
Hon. Nydia Velazquez............................................. 1
Hon. Steve Chabot................................................ 2
WITNESSES
Ms. Shanita Penny, President of the Board of Directors, Minority
Cannabis Business Association, Portland, OR.................... 4
Mr. Eric Goepel, Founder & CEO, Veterans Cannabis Coalition,
Walnut, CA..................................................... 6
Ms. Dana Chaves, Senior Vice President and Director of Specialty
Banking, First Federal Bank, Lake City, FL..................... 8
Mr. Paul Larkin, John, Barbara, and Victoria Rumpel Senior Legal
Research Fellow in the Meese Center for Legal and Judicial
Studies, The Heritage Foundation, Washington, DC............... 10
APPENDIX
Prepared Statements:
Ms. Shanita Penny, President of the Board of Directors,
Minority Cannabis Business Association, Portland, OR....... 30
Mr. Eric Goepel, Founder & CEO, Veterans Cannabis Coalition,
Walnut, CA................................................. 63
Ms. Dana Chaves, Senior Vice President and Director of
Specialty Banking, First Federal Bank, Lake City, FL....... 72
Mr. Paul Larkin, John, Barbara, and Victoria Rumpel Senior
Legal Research Fellow in the Meese Center for Legal and
Judicial Studies, The Heritage Foundation, Washington, DC.. 75
Questions for the Record:
None.
Answers for the Record:
None.
Additional Material for the Record:
CUNA - Credit Union National Association..................... 93
ETA - Electronic Transactions Association.................... 94
Florida Department of Agriculture and Consumer Services...... 95
Full Spectrum Omega, Inc..................................... 97
NCIA - National Cannabis Industry Association................ 103
NORML - National Organization for the Reform of Marijuana
Laws....................................................... 105
SARBA - Safe and Responsible Banking Alliance................ 107
Statement of Dan Anglin, Loveland,CO......................... 109
UNLOCKED POTENTIAL? SMALL BUSINESSES IN THE CANNABIS INDUSTRY
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WEDNESDAY, JUNE 19, 2019
House of Representatives,
Committee on Small Business,
Washington, DC.
The committee met, pursuant to call, at 11:30 a.m., in Room
2360, Rayburn House Office Building. Hon. Nydia Velazquez
[chairwoman of the Committee] presiding.
Present: Representatives Velazquez, Finkenauer, Golden,
Kim, Crow, Davids, Evans, Schneider, Espaillat, Delgado,
Houlahan, Craig, Chabot, Hagedorn, Stauber, Burchett, and
Joyce.
Chairwoman VELAZQUEZ. Good morning. The committee will come
to order.
I thank everyone for joining us this morning, and I want to
especially thank the witnesses who have traveled from across
the country to be here with us today.
We are here to draw what I believe is needed attention to
an industry that is rapidly evolving. As more and more states
take steps to bring cannabis to commerce, we are seeing small
businesses at the forefront of this expanding industry. As the
only House committee dedicated solely to the needs of small
firms, it is important for us to be shedding light on the
challenges these small entities face, as well as the economic
potential they offer. That is why I have called today's panel,
and I look forward to hearing more from our witnesses and thank
them for taking the time to be with us this morning.
In recent years, there has been a rapid shift in the legal
treatment of cannabis, often led by voters at the local and
state levels. Today, nearly every American lives in a state
where cannabis is decriminalized to some extent, and legal
business activity is permitted to certain degrees. This rapid
growth of the legal cannabis industry has had a considerable
impact on our nation's broader economy. In 2018, consumer
spending in this industry passed $10 billion for the first
time, and consumer spending is expected to increase to $23
billion by 2022.
Investment activity also increased dramatically last year
up $13.8 billion in 2018, compared to only $3.6 billion in
2017. Clearly these figures illustrate a market that is ripe
for entrepreneurship. Despite growing economic opportunities
around legal cannabis, factors like federal law enforcement,
conflicting rules among the states, and our current banking
regulations are hindering the ability for entrepreneurs and
small businesses to fully engage in this new industry.
So today, we will have a chance on this committee, to spark
the dialogue over the role of the federal government, and
particularly, the Small Business Administration, can plan in
supporting entrepreneurs in this sector. By reducing financial
barriers to entry in cannabis-related businesses, SBA can play
a critical role in offering affordable access to capital and
counseling services. That is why I am currently working on
legislation that will work to open some of the agency's
programs to businesses in areas where the industry is legal.
We know the cannabis industry is quickly evolving but is
mired with inconsistent federal and state laws that are
creating barriers for small businesses. We are here today to
listen to the challenges and opportunities small firms face in
this industry.
Before I yield to my friend, Ranking Member Chabot, I want
to mention that I understand that there are differing views on
the legalization of cannabis. Our committee has had a long
history of approaching issues in a thoughtful and constructive
way to best represent the interests and concerns of
entrepreneurs and small businesses. As the Ranking Member and I
always say, there are no Republican small businesses nor
Democratic small businesses, only American small businesses.
And our role on this committee is to fight for them. I
encourage everyone to keep that in mind and remember that we
can disagree without being disagreeable.
Again, I want to thank the witnesses for being here today,
and I now yield to the Ranking Member, Mr. Chabot, for his
opening statement.
Mr. CHABOT. Thank you, Madam Chairwoman.
I would like to thank the witnesses for being here today.
And as you look around the room, I would just say that it is
clear that there is considerable interest in this topic because
the room is packed. And as most people know, we like to think
that this is the most bipartisan Committee in Congress. Both
Ms. Velazquez and I have had the opportunity to lead this
Committee over the past several years, and regardless of who is
in charge, we have worked together and moved bipartisan
legislation together. And as she mentioned, when we disagree,
we do it without being disagreeable, usually.
Unfortunately, today is one of those times where the
philosophical divide between our respective perceptions of how
we should move forward deviates. But as is our custom, I am
confident that we will do so respectfully.
Marijuana is the most commonly used illicit drug in the
United States. Its use is associated with a range of adverse
health effects. Short-term effects include altered senses,
reduced motor coordination, diminished memory, and impaired
problem-solving abilities.
Recent research suggests that the early use of marijuana
may adversely impact long-term thinking, memory, and learning.
Marijuana use is also associated with addiction to other
substances and dependency, respiratory problems, child
developmental problems related to use during pregnancy, and
mental health problems. These are not my opinions; these are
facts backed up by decades of academic and medical research.
In June 2018, scientists at the University of Pennsylvania
discovered that young people who use marijuana frequently were
more likely than nonusers to have lower scores on memory tests,
have greater difficulty learning new information, and show less
than higher level problem solving. Other studies have also
found that teen brains are more vulnerable to the effects of
marijuana than alcohol.
And while I understand that the majority, if not all the
states and municipalities have decriminalized marijuana to some
degree, have implemented an age limit of 21, another study,
this one by the National Institute for Drug Abuse for Teens,
found that nearly 33 percent of 10th graders reported having
used marijuana at least once. It does not stop there. A 2018
University of Michigan study found the percentage of 8th
graders, 10th graders, and 12th graders who reported using
marijuana is at the highest rate in history.
The U.S. Constitution established a government based on
Federalism because a state is typically in the best position to
legislate the laws most appropriate for its citizens. However,
the drug market is a multi-billion dollar, nationwide business
and its repercussions do not stop at state borders. It is my
belief that the use of marijuana can be harmful to both family
and society. Additionally, prohibiting marijuana sends a clear
message to young people that this drug is not only illegal but
dangerous.
I have concerns that opening this door as quickly and as
widely as various states and municipalities are pushing will
have a negative effect on our young people and on society at
large. While I understand there may be entrepreneurial
opportunities in this area, it is my opinion that the dangers
to our Nation and the communities within it outweigh those
opportunities.
I yield back.
Chairwoman VELAZQUEZ. The gentleman yields back.
I would like to take a minute to explain the timing rules.
Each witness gets 5 minutes to testify and the members get 5
minutes for questioning. There is a lighting system to assist
you. The green light comes on when you begin, and the yellow
light means there is 1 minute remaining. The red light comes on
when you are out of time, and we ask that you please stay
within the timeframe to the best of your ability.
I would now like to introduce our witnesses.
Our first witness is Ms. Shanita Penny, a cannabis
advocate, business professional, and entrepreneur. Her boutique
consulting firm provides management and strategy consulting to
startups and small businesses in the legitimate cannabis
industry. She proudly serves as president of the Board of
Directors for the Minority Cannabis Business Association, and
is also a member of the New Jersey Cannabis Industry
Association's Board of Trustees. Ms. Penny is a proud alumni of
North Carolina A&T State University where she earned a
bachelor's of science degree in transportation and logistics
management.
Our second witness is Mr. Eric Goepel, the founder and CEO
of the Veterans Cannabis Coalition, a nonprofit advocacy group
dedicated to ending cannabis prohibition and guaranteeing equal
access to cannabis for veterans and all Americans. He enlisted
in the U.S. Army at the age of 18, served for 7 years,
providing communications and intelligence support in the
Special Operations community. During that time, he deployed
twice to Iraq and once to the Philippines. At the end of his
enlistment, Mr. Goepel worked as a defense contractor in
Afghanistan before returning to the U.S. to attend and graduate
from the University of California-Berkeley, with a B.A. in
Political Science. Prior to founding the Veterans Cannabis
Coalition, Eric was the Assistant Director of the American
Legion's National Security Division where he developed
positions for the legion on the opioid crisis, cybersecurity,
and transnational organized crime. Welcome to all of you.
Our third witness today is Ms. Dana Chaves, the Senior Vice
President and Director of Specialty Banking for First Federal
Bank of Florida. She has been building strategic banking
financing and legislative relationships to further the cannabis
industry access to banking and financial services for more than
5 years. Ms. Chaves also currently serves as Chair of the
National Cannabis Industry Association's Banking Access
Committee. Prior to joining First Federal in February of this
year, Ms. Chaves worked at Hybrid Payroll as the Director of
Banking Relations at Colorado Credit Union, providing some of
the earliest access to banking services to the cannabis
industry. Welcome, Ms. Chaves.
I would now like to yield to Mr. Chabot to introduce our
final witness.
Mr. CHABOT. Thank you, Madam Chair.
Our final witness will be Paul Larkin, a senior legal
research fellow in the Meese Center for Legal and Judicial
Studies at The Heritage Foundation. Mr. Larkin works on
criminal justice policy, drug policy, and regulatory policy.
Before joining Heritage, he held various positions within the
Federal Government. At the U.S. Department Justice from 1984 to
1993, he served as an assistant to the Solicitor General and
argued 27 cases before the U.S. Supreme Court. He also was an
attorney in the Criminal Division's Organized Crime and
Racketeering section. He also served as counsel to the Senate
Judiciary Committee and head of the Crime Unit for Senator Orin
Hatch. He received his law degree from Stanford Law School and
received a master's in Public Policy from George Washington
University. We thank you for being here, Mr. Larkin, and I
yield back.
Chairwoman VELAZQUEZ. The gentleman yields back.
And now, Ms. Penny, you are recognized for 5 minutes.
STATEMENTS OF SHANITA PENNY, PRESIDENT OF THE BOARD OF
DIRECTORS, MINORITY CANNABIS BUSINESS ASSOCIATION; ERIC GOEPEL,
FOUNDER AND CEO, VETERANS CANNABIS COALITION; DANA CHAVES,
SENIOR VICE PRESIDENT AND DIRECTOR OF SPECIALTY BANKING, FIRST
FEDERAL BANK; PAUL LARKIN, JOHN, BARBARA, AND VICTORIA RUMPEL
SENIOR LEGAL RESEARCH FELLOW IN THE MEESE CENTER FOR LEGAL AND
JUDICIAL STUDIES, THE HERITAGE FOUNDATION
STATEMENT OF SHANITA PENNY
Ms. PENNY. Good morning, Chairwoman Velazquez and members
of the Committee. Thank you for your leadership on the effort
to provide the regulated cannabis industry with access to Small
Business Administration services.
As the president of MCBA, I lead an organization with the
mission to create equal access to the cannabis industry to
economically empower our communities. We work collaboratively
to create equitable cannabis policy that encompasses
restorative justice, community reinvestment, and of course,
economic empowerment which I will focus on today.
Equitable economic development and empowerment unlock the
full potential of the local economy by dismantling barriers and
expanding opportunities for low-income people and communities
of color. Through accountable public action and investment, the
cannabis industry will help grow quality jobs and increase
entrepreneurship, ownership, and wealth.
Our latest resource for policymakers, a model municipal
social equity ordinance is intended to be used by
municipalities that have adopted or are currently considering
drafting ordinances to regulate, zone, and license local
cannabis businesses. We started with the framework of the
RESPECT Resolution introduced by Representative Barbara Lee
last year and borrowed from social equity ordinances in
development attempting to improve upon these pioneering works
with the benefit of hindsight.
I have included a copy of our model ordinance in the
appendix of my written testimony. And while we have worked
tirelessly to ensure that cannabis policy is equitable on every
level, our efforts have been crippled by a lack of access to
and support from agencies like the SBA. State and municipal
social equity and economic empowerment programs across the
country are stalled because they are wasting precious resources
testing various solutions when the answer is literally right in
front of me.
State and municipal social equity programs are doing this
work, but like all other small businesses, those wishing to
start a state legal cannabis business should be able to access
an agency that has, since its founding, delivered millions of
loans, loan guarantees, contracts, counseling sessions, and
other forms of assistance to small businesses.
Six figure to multi-million dollar startup costs make
starting and growing cannabis businesses challenging for most,
but it is especially difficult for state and city equity
licensees. Without access to capital, they are vulnerable to
predatory lending and business practices. These business owners
need SBA support and resources to start and grow their
businesses, not business partners and investors that take
advantage of equity programs to enter the market early or
tokenize their partners for market share.
Small cannabis businesses are often left scrambling to
remain compliant when regulations change and must either find
new sources of capital to cover the cost of changes or face
significant fines for violations. In addition to regulatory
changes, uncontrollable factors, such as insect infestation,
crop failure, or a natural disaster can often leave business
owners with insurmountable debt and no way of making up for
lost revenue.
As Representative Earl Blumenauer, Chair of the Cannabis
Caucus said earlier this year, ``There will be no comprehensive
cannabis legalization bill that does not include strong equity
components.''
Even narrowly tailored legislation, like the Safe Banking
Act or the small business legislation we are discussing today
must address business and social hardships that
disproportionately impact minority businesses owners and our
communities.
Representative Perlmutter's amendment added during markup
created a requirement that Federal regulators collect data and
provide an annual report to Congress on the availability of
access to financial services for minority-owned cannabis
businesses and that the Government Accountability Office carry
out a study on the barriers to entry for minority-owned
cannabis businesses.
MCBA suggests that Congress require SBA to: (a) collect
data on the availability and provision of SBA products and
services to minority-owned cannabis businesses; (b) issue an
annual report to Congress; and (c) require SBA to collect and
report data on the denial of loan and 8(a) program applications
on the sole basis of a prior cannabis conviction that would not
preclude participation in a state cannabis program.
We suggest that Congress direct the GAO to conduct a study
on the barriers to marketplace entry, including access to SBA
financial services for potential and existing minority-owned
cannabis businesses and that Congress require that SBA not
preclude participation in the 8(a) business development program
or the granting of a Federal contract for cannabis-related
business based solely on prior cannabis convictions, again,
that do not preclude participation in state legal cannabis
programs.
Last, we suggest that SBA lift the moratorium on new
Community Advantage lenders to ensure sufficient lenders to
provide equitable access to Community Advantage Loans in
affected communities.
Thank you again for the opportunity to testify today. I
look forward to working with you to create equitable cannabis
policy that addresses the needs and concerns of often-forgotten
stakeholders, small businesses, and the communities devastated
by the failed war on drugs.
Chairwoman VELAZQUEZ. Thank you, Ms. Penny.
Mr. Goepel, you are now recognized for 5 minutes.
STATEMENT OF ERIC GOEPEL
Mr. GOEPEL. Chairwoman Velazquez, Ranking Member Chabot,
and members of the House Committee on Small Business, the
Veterans Cannabis Coalition would like to thank you for the
opportunity to address the Committee on veterans and cannabis
issues currently under consideration. We would especially like
to thank the Committee for its foresight in tackling some of
the many challenges that have arisen as citizens grapple with
the conflict between Federal and state laws regarding cannabis.
I served for 7 years on active duty in the U.S. Army, which
included two deployments in Iraq. I cofounded Veterans Cannabis
Coalition with Bill Ferguson, an infantry combat veteran of the
invasion of Iraq and a long-time veteran advocate because we
saw the need for effective treatments for vets and the
potential for cannabis. We recognize in ourselves and in our
sisters and brothers in arms the struggles with physical and
mental health and, as they would say in the military, their
second and third order effects that negatively impacted our
relationships, our housing, and our employment. For too many in
our community, those struggles ended in suicide and overdose.
Our generation of veterans has the distinction of having
served in the longest conflicts in U.S. history that saw nearly
7,000 service members killed in action while an estimated
100,000 veterans died at home of suicide and overdose. At least
20 veterans die by suicide and overdose a day, month after
month, year after year, while their friends and family are left
to pick up the pieces.
We know the factors leading to suicide and overdose are
complex but they are understandable. And we have come to
understand the often unspoken role that legal pharmaceuticals
played in many untimely deaths. Hundreds of veterans have told
us about being prescribed cocktails of opioids, sedatives,
stimulants and numerous other psychotropic substances and
experienced severe suicidal ideation or attempted suicide. Many
more have discussed varying reactions to these drugs like major
depression, sleep disturbances, or fits of rage.
Enter cannabis. The American Legion Iraq and Afghanistan
Veterans of America have both conducted surveys asking veterans
questions about cannabis. Across both surveys, at least one in
five veterans reported using cannabis for their service-
connected conditions. In our work, many of those same veterans
who struggled under the weight of taking dozens of pills a day
found immense relief through using cannabis, finding it far
more effective at managing their injuries, like post-traumatic
stress disorder and chronic pain, than drugs like anti-
psychotics and ibuprofen.
This is where the Veteran Cannabis Coalition stands. We see
the bright light between cannabis and improved health because
have witnessed the positive changes in the lives of many in our
community who chose cannabis as an alternative to a slew of
toxic, addictive pharmaceuticals. We also understand the broad
potential of a plant that has numerous medical, commercial, and
industrial applications and what that means for millions of
veteran patients, employees, and employers.
Despite the current field of international multi-billion
dollars cannabis corporations, the movement to reform cannabis
laws in the U.S. was centered on the needs of patients, not the
potential for profit. But while many patients in the past were
able to rely in donation networks and co-ops, the scale
required today to reach everyone interested in cannabis often
necessitates complex supply chains made more complex by the
double-edged sword of heavily regulated state systems and
Federal prohibition.
These complexities favor heavily capitalized businesses who
have the resources necessary to comply with burdensome rules
and massive tax liabilities. This presents a huge threshold to
entry for small businesses made more difficult because they are
cut off from raising capital from traditional sources.
Financial services, including basic access, like deposits in
checking, are often denied to legal cannabis businesses by
vendors who fear Federal reprisal. For example, Berkeley
Patients Group, the Nation's longest-running cannabis
dispensary and co-owned by a Gulf War veteran, has had their
bank accounts closed nearly 40 times in 20 years. Multiple
times per year, BPG is forced to pay taxes in the hundreds of
thousands of dollars in cash at great personal risk to both
employees and government workers who have to deal with massive
amounts of currency.
The denial of access to traditional financing forces
cannabis businesses to seek vendors offering far less favorable
terms. Ancillary services in the cannabis industry, including
payroll, IT, and insurance are extremely limited due to
potential sanctions by the Federal Government on firms that
participate in any way in the cannabis industry. This, in turn,
enables those providers who do participate to charge exorbitant
rates. Just as the Federal and state conflict in cannabis laws
damages the ability of cannabis touching small businesses to be
successful, it discourages the participation of indirect
businesses which further negatively impacts direct cannabis
businesses and their ability to deliver accessible, affordable
medicine.
Millions of patients across the country have a need for
equal access to cannabis, which we define as a combination of
affordability, physical accessibility, and a standardized
quality. We have seen the benefits veterans have experienced
using and working with cannabis and we know that in making
those benefits as widely available as possible, we can work to
reduce the suicide and overdose epidemic that has devastated
our community. But everyone who uses legal cannabis relies on
licensed cultivators, licensed manufacturers, and retailers and
dozens of ancillary businesses that interact with them. We want
to see industries small businesses delivering medicine to those
in need, developing new devices and treatments, and fully
exploring all the pathways the plant contains. And those
businesses can be empowered by the actions of this Committee.
We hope that you will continue supporting this discussion
and work with stakeholders to fulfill the promise and ingenuity
of American small businesses in this new and important sector.
Thank you for your time.
Chairwoman VELAZQUEZ. Thank you, Mr. Goepel.
Ms. Chaves, you are now recognized for 5 minutes.
STATEMENT OF DANA CHAVES
Ms. CHAVES. Chairwoman Velazquez, Ranking Member Chabot,
and members of the Committee, I am Dana Chaves, and I am the
senior vice president and director of Specialty Banking
Services at First Federal Bank of Florida. Thank you for the
opportunity to testify before the Committee today to discuss
the importance of unlocking access to affordable capital for
businesses in the regulated cannabis industry. I am pleased to
provide a first-hand account of how local community banks can
invest in aspiring entrepreneurs and new businesses to help
facilitate economic development and job growth, especially in
underserved areas. I will briefly summarize my written
testimony and I look forward to answering your questions.
First Federal Bank is a federally chartered mutual bank
which was established in 1962. We have over 750 employees, with
over 24 branches, 17 mortgage offices, and operate in eight
states with almost $2 billion in total assets. And that
encompasses nearly 75,000 clients.
We launched our cannabis banking program on April 1, 2019,
and to date, we have opened 62 accounts tied to marijuana-
related businesses. We classify these accounts into three
separate tiers. Tier I are direct plant touching businesses,
such as dispensaries and cultivators; Tier II are ancillary
businesses, vendors, investment accounts, and depository
accounts; and Tier III are businesses that are involved in the
medical side, like the treatment centers or doctors' offices.
We also serve CBD companies, as they, too, are dealing with
issues related to financial services. We have over 55 Tier I,
II, and III pending applications and several are currently
under our due diligence review. This process can take up to
several weeks to complete.
I am also testifying on behalf of the National Cannabis
Industry Association (NCIA), the largest national trade
association dedicated to protecting state-regulated cannabis
businesses and advancing policy reforms needed to align Federal
and state cannabis laws. Currently, I am the Chair of the NCIA
Banking Access Committee and have helped publish several
industry reports to assist and educate financial institutions
and state regulatory agencies on cannabis-related banking.
To date, 47 states and the District of Columbia, as well as
Guam, the Northern Mariana Islands, and Puerto Rico, have
passed legislation authorizing some form of cannabis for
regulated medical or adult-use purposes. Additionally, 33
states have enacted laws regulating the commercial production
and sale of medical or adult-use marijuana, excuse me,
including my home state of Florida. However, because cannabis
remains a Schedule I drug under the Federal Controlled
Substances Act, licensed cannabis-related businesses have been
effectively locked out of accessing basic financial services,
including the traditional loans and programs established by the
Small Business Administration, such as the 7(a) loan guaranty
program, the 504 Certified Development Company loan guaranty
program, the Microloan program, and disaster relief efforts.
With my testimony today, I hope this Committee will develop
and pass legislation that expands access to business loans and
lending programs under the jurisdiction of the SBA for
cannabis-related businesses, many of which are led by aspiring
entrepreneurs or are minority or women-owned. Also, I hope the
members of the Committee will also support H.R. 1595, the
Secure and Fair Enforcement Banking Act. The bill, which
currently has over 200 bipartisan cosponsors, would permit
banking and depository services to licensed cannabis-related
businesses, including ancillary businesses.
Given the lack of clarity for cannabis banking, as well as
the inability for SBA to partner with community banks to assist
MRBs, I have seen, and continue to see, those involved in the
state-regulated cannabis industry struggle. As an example, I
have an executive who left a Fortune 500 to work for one of our
clients who was refinancing his home with a large national
bank. The executive had a longstanding relationship with this
bank and literally 30 minutes before they were closing his loan
they canceled it and decided they could not help him because of
where his funds were coming form. We had to step in and assist
him with refinancing his home. So while this example had a
positive outcome, First Federal has several requests for
lending from MRB clients and we are not in a position to
provide these services due to the current regulatory
environment.
Since 2004, the U.S. Department of Treasury's financial
crime enforcement network has maintained guidance regarding the
conditions under which financial institutions may work with
cannabis-related businesses. These conditions include an array
of Federal requirements financial institutions must meet to
provide banking services to licensed cannabis-related
businesses, such as preventing distribution of cannabis to
minors, preventing revenue from the sale of cannabis to
criminal enterprises and cartels, ensuring cannabis activities
and transactions are not being diverted to a state where it is
not legal, among others. As a provider of small business loans,
it is frustrating that the SBA has not incorporated a similar
approach.
I want to thank the Chair, Ranking Member, and Committee,
for your time to discuss expanding access to SBA loan programs
for the regulated cannabis industry. This topic is important
and has economic consequences for businesses and community
banks all across America. I urge the Committee to develop and
pass legislation that allows SBA to provide the regulated
cannabis industry with affordable capital necessary to increase
economic opportunity and support job growth.
Thank you again for the opportunity to submit my testimony
today.
Chairwoman VELAZQUEZ. Thank you, Ms. Chaves.
Mr. Larkin, you are now recognized for 5 minutes.
STATEMENT OF PAUL LARKIN
Mr. LARKIN. Madam Chairwoman, Mr. Ranking Member, and
members of the Committee.
I made four points in my written statement and I will
summarize only one of them here, and that is this: If Congress
were to legalize recreational marijuana use, it should require
that states own and operate distribution facilities.
Debate over the supply aspect of marijuana legalization is
generally focused on the difference between distribution by
large and small-scale businesses. I think that is a mistake
because those are not the only two options. Distribution by
whatever size business is not just the province of private
parties, and I think it is important to consider other
distribution mechanism.
Now, why? It is important to do this because marijuana is
not an ordinary commercial product, like batteries or
flashlights. It is much closer to alcohol or tobacco. Long-term
use can lead to severe problems. We know a certain percentage
of people who use it on a long-term basis will become
physically dependent or addicted. A certain percentage will
suffer severe mental disorders. And people who use it, even on
a short-term basis and drive can lead to havoc on the highways.
So it is not your average commercial product. It is very
different. All of which, I think, can wind up giving rise to
the conclusion that we have to be careful about how we wind up
legalizing it if that is your decision.
Now, moderate use of marijuana by adults at home is not
likely to lead to large-scale social problems or major
individual problems. Adults who use a few times a week when not
driving, when not working, when not caring for children is
going to be an activity that is fairly harmless. But that might
describe only about half of cannabis users, and that practice
describes only 2 percent of cannabis use. Okay? Which is 2
percent of consumption and only 2 percent of sales and profits.
A small number of daily or dependent users consume far more
marijuana than the average person who does it on an occasional
basis.
Cannabis consumption is like alcohol consumption. It
follows the 80-20 rule. Eighty percent of consumption is by 20
percent of the users. What does that mean in practice? Since
1996, since cannabis use has been legalized in various states,
it has changed from being a weekend activity to sometimes being
a daily activity. It has become more like smoking tobacco than
drinking alcohol. The number of Americans who self-report using
cannabis daily or near daily has increased from roughly 1
million in 1992 to roughly 8 million in 2016. That is a
considerable increase.
Now, aggravating those factors is this: Just under one-half
of consumption is by people who either have been in treatment
for some type of substance use disorder or have the symptoms of
a substance use disorder and just have not had treatment for
it. And since being addicted or being physically dependent is
not an activity that generally is one that people consider
laudatory, the numbers I have given you may even be
conservative. They may even be higher.
Moreover, about 60 percent of consumption is by people with
a high school education or less, which means they are far more
sensitive to declines in prices and prices have dropped,
sharply, in fact.
But what does that mean? From the perspective of cannabis
vendors, marijuana abuse is not an unfortunate side effect of
legalization. No. Marijuana abuse is the goal and marijuana
abusers are the target demographic. That is the result of the
80-20 rule.
Now, the trick, as Professor Mark Kleiman of NYU has said,
if you are going to legalize it, is to try to keep at bay the
logic of the market because the logic of the market has a
tendency to create and exploit people with substance abuse
disorders. How then do you do that? There are at least two
other options that should be debated. One is endorsed by
Professor Jonathan Caulkins of the Carnegie Mellon University.
He says the shale should be limited simply to not-for-profit
companies. Another option is the one that Professor Mark
Kleiman of NYU endorses. He says that the sale should be
limited to government businesses, similar to what happens in my
own state of Virginia for distilled spirits. I think Professor
Kleiman has the better of the argument for several reasons. I
mentioned them. Let me just mention one.
There is no First Amendment problem whatsoever to
preventing advertising of marijuana if it is sold by the
states. States are not persons. They have no First Amendment
rights and it is easier for the states to keep track of their
own stores and their own people.
For these reasons, I hope you will, if you decide to
legalize it, consider these other two options and avoid
recreating what we have with cigarettes and tobacco. Thank you.
Chairwoman VELAZQUEZ. Thank you, Mr. Larkin.
And thank you to all the witnesses. I will begin by
recognizing myself for 5 minutes.
Ms. Penny, recent data shows the legal U.S. cannabis
industry has a high rate of women in leadership roles with a 36
percent average across the industry and the highest being 63
percent in high-level executive positions in testing labs. We
also know that minority business owners generally face greater
challenges in accessing affordable capital to start, expand,
and operate their businesses, and that the SBA has historically
played a role in providing access to affordable capital in
emerging industries such as technology and communication
services. Should SBA loan programs and entrepreneurial
development programs be accessible to small firms in the
cannabis industry?
Ms. PENNY. Absolutely. We do not have access to
institutional lending currently, and so we are left to finance
these businesses with private equity. This is usually a very
expensive loan. And because most people are not savvy enough,
they typically get into situations where as they continue to
raise money they lose equity. And so these businesses that were
once minority owned, women owned, quickly become, you know,
something that is not that.
Chairwoman VELAZQUEZ. Thank you.
Mr. Goepel, we know that generally veterans try to give
back and help fellow veterans, including by hiring them in
their businesses. However, we also heard that veterans who
receive benefits from the VA have expressed hesitation before
entering the legitimate cannabis industry, either as
entrepreneurs or as employees for fear of losing their VA
benefits. Should the VA issue guidance clarifying that veterans
employed in the legitimate cannabis industry will not lose
their benefits simply because of the industry in which they are
employed?
Mr. GOEPEL. Thank you, Chairwoman.
Currently, the VA has a directive stating that veterans who
self-disclose cannabis use within the VA healthcare system will
not be denied benefits or stripped of benefits. However, when
you are talking about other non-healthcare related benefits,
like VA home loans, the VA looks at where the source of your
income is coming from. And if it sees that the major source of
your income is coming from a cannabis-related enterprise, then
essentially you do not have income. So it disqualifies a lot of
veterans because the VA essentially does not recognize the
validity of the business they are working in.
Chairwoman VELAZQUEZ. So should SBA and the VA enter into a
partnership designed to enhance entrepreneurial and employment
opportunities for veterans in the legitimate cannabis industry
and making sure that because you work as an employee or as a
business owner, you would not be denied any type of benefits or
your income counting for the purposes of acquiring any type of
property?
Mr. GOEPEL. That clarification would go a long way to
alleviating a lot of the stress and hesitation veterans
experience, you know, entering or working in the cannabis
industry, essentially being under the gun of some sort of
Federal sanction if it were to come out in certain
circumstances that they were working in the cannabis industry.
So, yes, we would certainly support any effort to, you know,
the SBA or, excuse me, the Small Business Committee and the VA
working together to clarify that.
Chairwoman VELAZQUEZ. Thank you.
Ms. Chaves, SBA policy prohibits SBA-backed loans from
going to direct or indirect cannabis businesses. The policy
defines an indirect cannabis business as one that generates any
revenue from the sale of a good or service to a direct cannabis
business. That is an incredibly broad prohibition. As a banker,
what kind of impact does this have on the small business sector
and local communities?
Ms. CHAVES. It has a very large impact. These small
businesses are not allowed to grow. They are not allowed to
expand and help the communities and provide jobs in underserved
areas or any other areas. So these loans and this clarification
would help immensely for us to be able to help these
businesses.
Chairwoman VELAZQUEZ. And what are the potential,
unintended consequences of denying legitimate businesses
traditional banking services and forcing them to operate on an
all-cash basis?
Ms. CHAVES. The consequences are huge. Operating in an all-
cash environment creates a community safety risk as far as
their employees, the staff, and the community itself. We do
take some cash deposits but we never take a cash deposition in
our financial institution. It has always been armored car
service. So these risks are huge and they can cause severe
damage.
Chairwoman VELAZQUEZ. Thank you.
My time is up. My time has expired.
And now I recognize the Ranking Member, Mr. Chabot, for 5
minutes.
Mr. CHABOT. Thank you, Madam Chair.
The Chair started out by asking a question about women, so
Ms. Penny, let me ask you this: Are you aware that marijuana
usage among pregnant women has doubled in recent years?
Ms. PENNY. I was not aware of that. I am aware of the fact
that a lot of people have replaced harmful pharmaceuticals with
cannabis. And so if pregnant women are falling into that
category it may be some truth to that statement.
Mr. CHABOT. Let me follow up. Are you aware that use of
marijuana by a pregnant woman can cause premature birth? It can
cause low birth weight, both of which can be harmful to the
newborn child and it can cause other problems as well; would
you agree with that?
Ms. PENNY. I have not seen this science or research that
says that specifically. I am aware of what smoking does.
Pregnant women today----
Mr. CHABOT. Pregnant women should not be smoking either.
Ms. PENNY. Pregnant women today have a lot of options for
consuming cannabis safely through topicals, low THC forms of
the medicine itself.
Mr. CHABOT. Okay.
Mr. Larkin, let me move to you. Would you characterize the
growing, cultivating, transporting, and selling of a product,
any product, across state lines, interstate commerce?
Mr. LARKIN. Yes, sir.
Mr. CHABOT. Okay. And does the U.S. Constitution give the
authority to the Federal Government to ``regulate'' commerce
among the several states or does it just leave it up to the
states to figure out?
Mr. LARKIN. The Constitution expressly grants that power to
Congress.
Mr. CHABOT. Thank you.
Would you think it fair for a state, any state, let's say
Vermont since we do not have anybody on this Committee from
Vermont, to opt out of a Federal law, perhaps the Clean Water
Act or even the Internal Revenue Code by plebiscite or a vote
of the people in that state to hold a referendum and say, well,
we do not want to pay any more Federal taxes. Why on earth if
we would not do it for those things would we do it for
marijuana, for example?
Mr. LARKIN. I am searching for that answer myself.
Historically, it has been up to Congress to decide whether to
exempt states from Federal law. It is not up to the states to
decide voluntarily to leave.
Mr. CHABOT. Thank you.
Ms. Chaves, let me ask you this. The additional usage of
marijuana, what effect do you think that would have on injuries
and deaths on the Nation's roads and highways, if any?
Ms. CHAVES. I do not think that the usage is any different
than other substances, like alcohol.
Mr. CHABOT. Okay. And if people are drinking and driving,
that can cause an increase in the injuries and deaths on the
highways; is that correct?
Ms. CHAVES. Definitely.
Mr. CHABOT. And if marijuana usages goes up and people are
driving while they are having ingested in some manner
marijuana, is it not reasonable to assume that injuries and
deaths on the Nation's highways would go up as well?
Ms. CHAVES. I am not aware of any studies but there is a
possibility. It depends on who is behind the wheel. And there
is always that risk.
Mr. CHABOT. Thank you very much.
Let me go back to you, Mr. Larkin. Justice Brandeis
famously stated that we should allow the states to serve as
laboratories to try out novel social and economic experiments
without risk to the rest of the country. Why should we not
apply that to marijuana in this particular instance?
Mr. LARKIN. It is a great phrase but it has its limitations
because after all, Dr. Frankenstein had a laboratory, too. What
we have decided for a very long time, 80 plus years, in fact,
is that we should leave, for example, the question of whether a
particular item is a drug. And if it is a drug, whether it is
safe and effective to the Food and Drug Administration to
resolve.
In 1937, Congress in the Marijuana Tax Act effectively
prohibited the interstate distribution of marijuana. The
following year, in the Federal Food, Drug, and Cosmetic Act, it
entrusted the FDA with the responsibility to decide what is
safe, and in 1962, also what is effective. If the question is
whether marijuana is a safe and effective drug, we should leave
it to the Food and Drug Administration to decide. We should not
leave it to the states. That is exactly the wrong way about
going about this. We do not by plebiscite decide what drugs can
be distributed in interstate commerce because they are safe or
effective. We rely on the expert judgment of the commissioner
of Food and Drugs and the staff at the FDA. We should do the
same with respect to all the drugs that are regulated by
Congress.
Mr. CHABOT. I am just about out of time.
Mr. Goepel, let me ask you this to conclude. Are you aware
that studies have shown that marijuana usage among teens
oftentimes leads to suicidal thoughts?
Mr. GOEPEL. I believe a lot of those studies that link
psychosis or suicide or schizophrenia to cannabis use run into
major issues when it comes to directionality.
Mr. CHABOT. Would you agree they are linked to anxiety and
depression and memory loss and a number of other----
Mr. GOEPEL. I mean, there have been links but there is not
anywhere close to a definitive correlation between the two.
Mr. CHABOT. My time is expired. Thank you. Thank the panel.
Chairwoman VELAZQUEZ. The gentleman's time has expired.
And now we recognize Mr. Jason Crow, Chairman of the
Subcommittee on Innovation and Workforce Development from
Colorado for 5 minutes.
Mr. CROW. Thank you, Chairwoman.
Mr. Goepel, thank you for joining us today. I also am a
fellow veteran, and anecdotally through my work with veterans
in Colorado, I have seen and heard what you described of
earlier, this effect of veterans going to cannabis to self-
medicate and going away from more lethal prescription drugs and
opioids and the lifesaving impact that that has had. Can you
just elaborate a little bit more on some of the experiences
that you have had on that and some of the data that suggests
that this is a positive impact for veterans overall?
Mr. GOEPEL. Sure. So, for example, the Department of
Veterans Affairs in a 2014 study basically found that half of
all veterans have chronic pain. Untreated chronic pain is one
of the biggest drivers in suicide. What the Department of
Veteran Affairs and let's just say more broadly, the private
healthcare system would provide to veterans who have
indications like PTSD and chronic pain, anxiety, depression, is
essentially a cocktail of medications individually that all
carry risks combined. There is zero research to back giving
someone combinations of sedatives, opioids, stimulants, and a
variety of other drugs that are intended to treat these very
narrow indications, but in turn, create other problems which
require other medications to treat. And now you have veterans
taking 20, 40 pills a day, you know, between 6, 8, 10, 12
medications a day. That is not a sustainable lifestyle.
Certainly, it is not a sustainable treatment program. And yet,
that is what the VA and private health care have provided us.
So obviously, we see a lot in our community where people
have tried the pharmaceutical route. They have been driven near
suicide. Someone, usually a friend or someone trusted, comes to
them and brings them cannabis and the relief that they
experience is almost immediate and incredible comparative to
years of not sleeping, for example, where a lot of veterans are
taking medication either because of their underlying conditions
or the medications themselves are unable to really ever
stabilize or get healthy.
Mr. CROW. And I would add to that that there is this
tradition of veterans protecting and helping other veterans.
And what I have seen in Colorado is veterans who have had
positive experience with cannabis as an alternative to more
lethal drugs and opioids in particular are starting cannabis
businesses to help their fellow veterans. And I am assuming you
have seen that at a national level as well?
Mr. GOEPEL. Yes. We deal with veteran entrepreneurs who
generally have started out with the intent to, yes, they see
some future in cannabis as an industry but they also see the
benefit that being a cannabis entrepreneur can bring to others
in the community.
Mr. CROW. And Ms. Penny, as you know, I am from Colorado,
and we have been one of the leaders in cannabis legalization
and creating a system that works well and is responsible to the
community. And I have a number of cannabis businesses in my
district and I have yet to see and ever run into a business
that feels like running afoul of the law or giving cannabis to
individuals who are abusing it is a good business model. In
fact, I see that people go out of their way to actually be
responsible and to be good stewards of the community and do it
the right way because they want to serve as an example for the
community that this can be done. And I just would love your
thoughts on that and whether that has been your experience at a
national level as well.
Ms. PENNY. Yes. Colorado has been a model for a lot of the
other states that have legalized. You see elected officials
traveling to Colorado to visit these businesses. You see
interested parties who are entering the cannabis industry go to
Colorado. You have a great deal of small business owners and
entrepreneurs in Colorado. A lot of the other state programs
were not created in that way and as the Colorado market
matures, regulatory changes that have taken place have really
impacted the small businesses there. So access to SBA services
and institutional lending will impact Colorado greater, but the
impact that it can have on new programs and developing programs
is an even larger opportunity.
Mr. CROW. Thank you, Madam Chair. I yield back.
Chairwoman VELAZQUEZ. The gentleman yields back.
The gentleman from Minnesota, Mr. Hagedorn, is recognized
for 5 minutes.
Mr. HAGEDORN. Madam Chair, thank you for the opportunity
and holding this hearing. Ranking Member Chabot, and the rest
of you, the witnesses.
At full disclosure, I am one of those that grew up in the
Nancy Reagan era of ``Just Say No'' but I am not here today to
pass any judgment. I just want to talk about the issue. In
fact, I would like to switch gears a little bit from the
legalization of marijuana for recreational purposes and medical
to the concept of the industrial hemp and using low dose THC
for pain management and things of that nature. We have
businesses in southern Minnesota that are exploring this.
Farmers, manufacturers. I toured a plant recent, a whole
production facility in Waseca, Minnesota, and listened intently
as to what was going on.
There are a lot of issues that might be impediments as you
are talking about in this area for industrial hemp and for the
pain management, the oil. And you are looking at it, as
farmers, and you want to go out and grow, but you can have some
crosspollination problems where if two farmers are too close
together and one plant impacts the other, it can destroy crops.
And you have other situations where right now for agriculture
there is no specialty crop insurance for industrial hemp. That
is something they are looking into. I talked with the Secretary
of Agriculture and others on down and they say maybe in a
couple of years as they move forward, since this is an emerging
crop, that might be something they look at.
But, you know, there are other areas. Regulations. Federal,
state, and other regulations as to whether or not the products
that are produced, are they pure? Do they meet standards? Are
they going to do what they say? Do they have the level of oil
in there that they claim? You are looking at international
trade issues where the Chinese dump product that might not be
sufficient and good for the American people or again, follow up
on their claims.
The Ranking Member brought up the commerce clause and the
banking issues. And there are regulations by the police and
investigations to make sure that the specialty crop for
industrial hemp is not something other that the state does not
allow or should not be grown.
So those are the types of things that we are looking at and
I am going to try and represent the district in the interest of
everyone at heart. But just a couple of questions.
Is it Goepel? Is that how you are pronouncing it, sir?
Mr. GOEPEL. Yes, sir.
Mr. HAGEDORN. I appreciate our advocacy for veterans and
everything that you are trying to do to make sure we can
prevent suicides, help them manage pain properly. Let me live
the best life possible. Give them the benefits they deserve and
everything else. One of the things I am working on with some
members is to try to make sure we have choice for veterans for
mental health capacities and others. They should be able to go
choose the mental health provider of their choice, not
necessarily have to rely on the VA, and get that as soon as
possible.
But for veterans that are dealing with pain management, do
you think that--you advocate for the medical marijuana, but do
you think that they should have to try low dose oils with THC
levels lower before they would move on to medical marijuana?
Mr. GOEPEL. I think you make a great point, Congressman.
Basically, there needs to be some sort of established protocol
for introducing people to cannabis. And introducing them in a
way that allows them to find the right dosage and the right
ingestion method to meet whatever their healthcare needs are.
We do not necessarily advocate for just the straight smoking of
cannabis.
Mr. HAGEDORN. So those types of standards you think might
be okay. What about the idea of finding other delivery methods
than smoking it? Would that be beneficial in the long run, do
you believe?
Mr. GOEPEL. Most definitely. We have seen, especially in
California, for example, and Colorado, certainly, the
proliferation of different methods of ingestion. And many of
them are more efficient than smoking.
Mr. HAGEDORN. All right.
Mr. Larkin, I was going to go down this road because I met
with a law enforcement officers in southern Minnesota, and they
all kind of tell me the same thing. They tell me that the
marijuana of today is a lot different than it was 20 or 30
years ago. It is many, many times stronger. They believe, the
law enforcement, that it is a gateway drug. They believe that
for that reason they oppose it. You seem to have a lot of
knowledge in this area. Do you have any comment to that?
Mr. LARKIN. Yes. First, it is far more powerful.
Mr. CHABOT. The mic. The mic there. Pull the mic towards
you.
Mr. LARKIN. Oh, I apologize.
The marijuana that people used back in the 1960s when it
became a symbol of opposition to the government was maybe 1 to
3 percent THC. Nowadays, you can have marijuana that is in the
teens. You can have hashish that is higher. And if you have the
right facilities, you can manufacture a substance that can be
used that is up in the 90s. So as a factual matter, marijuana
can be far more potent today than it was back then.
Mr. HAGEDORN. All right. My time is up. I just have one
more quick question.
On the issue of liability, dispensaries, should they be
held to the same standards, for instance, as maybe bars and
others where if you overserve or you do things in a bad
capacity that they should be liable for problems?
Mr. LARKIN. Absolutely. If they are contributing----
Chairwoman VELAZQUEZ. Be brief, please. Time has expired.
Mr. LARKIN. Yes, yes, yes, yes.
Mr. HAGEDORN. Thank you, Chair.
Mr. LARKIN. If they are contributing to injuries and deaths
on the highway, they should be responsible as well.
Mr. HAGEDORN. I am not saying I subscribe to all that. I am
just asking your opinion. Thank you.
Thank you, Chair. I yield back.
Chairwoman VELAZQUEZ. Thank you. The gentleman's time has
expired.
Now I recognize the vice Chair of the Committee, Mr. Evans
from Pennsylvania for 5 minutes.
Mr. EVANS. Thank you, Madam Chair. And I thank the Ranking
Member for the purpose of this hearing.
I come from the Commonwealth of Pennsylvania. When I was in
the state legislature I voted for medical marijuana, and it is
ironic that I am here. I was on the Agriculture Committee and I
voted for the Farm Bill, which we deal with the issue of hemp.
So the question I want to go to is Ms. Perry. A couple
questions real quick.
Can you explain how the 8(a) program you spoke to about
leveling the playing field for economic disadvantaged people,
and why is it important for SBA to allow individuals with prior
cannabis convictions to participate?
Ms. PENNY. Thank you. It is important for us to allow the
people who have been impacted by prohibition to participate in
this industry because essentially, the industry was built on
their backs. So we want to embrace them. They have experience
that with the proper training and polishing, they could be
business leaders, innovators, thought leaders as this industry
evolves. And so when we look at the services and support
offered by SBA, we want to make sure that we are not creating
an environment where these programs are assisting people who do
not really need additional assistance. We have seen programs in
the past that have been kind of hijacked. You know, a white
woman-owned business being positioned as a minority-owned
business. We do not want to see that in the cannabis industry.
So we want to be specific in these targeted funds for the
groups that have been impacted. We want to see specific funds
for minorities, and we want to identify those groups that were
impacted by the war on drugs. And we know that in this country,
black and brown people are four times more likely to be
arrested for cannabis possession than anyone else, even with
similar usage.
Mr. EVANS. Okay, Ms. Penny, can you explain the types of
jobs this industry created from the cultivating to
distribution?
Ms. PENNY. Sure. You have everything from the
horticulturist, or the botanist, the person responsible for
that strategy and what you are going to grow. You then have
processors, people with chemistry backgrounds, chemical
engineers, folks that understand formulations and how to make
medicine, down into the dispensary portion of the supply chain.
You have retail management, pharmacists. To support these
businesses, you have a ton of professional services, the same
services that any other business would have. In the next few
years, cannabis is going to outpace manufacturing in the number
of jobs created, and if we are not developing a pipeline of
talent, there is no way that we are going to have a diverse
industry. And the SBA also needs the support of the existing
operators so that you have expertise at the SBDC, so that you
can actually provide the technical assistance that is promised
in most of these social equity and economic empowerment
programs.
Mr. EVANS. Mr. Goepel, what are some of the obstacles
unique to veteran startups in the cannabis industry? And I am
going to do a follow up so you can get it in. What can the
Small Business Administration do to focus its existing efforts
to empower the veteran-owned business population?
Mr. GOEPEL. Well, we can look at, excuse me, the Committee
can look at the declining rate of veteran entrepreneurship and
perhaps see an opportunity in cannabis to enable veterans who
have an interest, who have a connection to cannabis as patients
oftentimes to participate. And I think one of the best ways to
do that is training and loan programs. And that is something
that the Small Business Committee already oversees at the SBA.
There is a lot of opportunity for veterans to become valuable
members of the industry. They already possess a lot of talents
and skills that would be useful in the context of cannabis. And
so I think there are a lot of areas there for the Committee to
empower and incentivize vets.
Mr. EVANS. One last question to Ms. Penny. What do low-
income neighborhoods and communities of color stand to lose if
they are left out of the cannabis policy?
Ms. PENNY. They will remain devastated. They will remain
food deserts. They will remain places where you cannot access
health care or any of the other things that you need in any
community.
Mr. EVANS. I yield back the balance of my time. Thank you.
Chairwoman VELAZQUEZ. The gentleman yields back.
And the gentleman from Tennessee, Mr. Burchett is
recognized for 5 minutes.
Mr. BURCHETT. Thank you, Chairlady and Ranking Member.
I speak to a lot of groups. One of the groups I speak to, I
have in the past, is the Libertarian group. And they brought to
me a lot of these statistics, facts and figures, one way or the
other. But I think the reality is we can talk about the
medicinal purposes and the oils and everything, but people want
to get high. I mean, that is the reality of this industry, I
believe. And I think that if we do not acknowledge that and the
effects that that could have on society, then I think we are
missing the boat.
Mr. Larkin, do you think it makes sense for the Federal
Government to allow tobacco to be sold under Federal regulation
but to authorize states to have complete control over
marijuana?
Mr. LARKIN. No, sir. I think that would be quite silly.
In 2009, Congress decided for the first time heavily to get
into the business of regulating the safety, to the extent you
can, of cigarettes and the like. They empowered the FDA to
regulate cigarettes, tobacco, and the like. There is no reason
not to do the same thing here.
Mr. BURCHETT. Okay.
Mr. LARKIN. Oh, and by the way, you mentioned the real
reason. You know, you are not alone in that. Dr. Peter Bach
wrote an article in The Wall Street Journal earlier this year
entitled, ``If weed is medicine, so is Budweiser.'' So it is
not just you thot thinks what we are really talking about is
the value in having that euphoric feeling. He is a physician at
Memorial Sloan Kettering Cancer Institute. He said the exact
same thing.
Mr. BURCHETT. Yes, sir. Because I do know that, for
instance, THC can be created in the lab and it can be through
the use, I believe the drug they use is called Marinol, and it
has the same euphoric effect that would be just of smoking
marijuana from what I understand.
Mr. LARKIN. Yes.
Mr. BURCHETT. And I do not support that but it is just the
reality of where we are at. And at some point I think folks
should just say that.
I would ask the whole Committee, the group that is gathered
here, what small business owners and what sector of small
businesses would benefit and which would be most directly hurt
if we were to legalize marijuana? Because we have available
dollars. You are going to spend them on something. I mean, is
it going to affect, as you said, is it going to affect
Budweiser or is it going to affect something else? Because it
is not going to be this new money is just going to appear.
People have available funds to spend on something. What will it
affect? And I would ask all the Committee members up here.
Mr. LARKIN. Well, I am glad to start. I think to the extent
people use marijuana for the euphoric effect it creates, it is
going to create a similar effect to what you have when you use
alcohol. So whatever they take money away from to purchase
alcohol, they will probably also use that same source to
purchase marijuana. Or they may take even more because they may
purchase alcohol and marijuana because the two are often used
together.
Mr. GOEPEL. If I could answer that question. I think the
idea that the vast majority of consumers are using cannabis
specifically to get high very much undermines the medical value
that especially veterans have experienced. The drugs that
veterans are prescribed, opioids, sedatives, stimulants,
antipsychotics, a lot of these all carry euphoria as a side
effect but we do not necessarily dismiss those things just
because they have a euphoria attached to them. Now, they are
also very psychoactive and incredibly impactful on mental
health and other aspects of physical health. So we have a
situation here where I believe cannabis is a dual purpose
substance, whereas, cannabis can be used recreationally, it can
be used medicinally. That cannot be said the same for alcohol
or tobacco because there are no children who are seizure-free
because they are drinking Budweiser.
Mr. BURCHETT. I realize that except the CBD oils and
things, they are, as was stated earlier, I believe 47 states
have something, as does my own state. So it would go back to
the original premise though. I mean, if those things are
already there, then what is the further purpose of marijuana
past that?
Mr. GOEPEL. I mean, there still needs to be massive amounts
of research. I mean, we want to see cannabis medications in the
Department of Veterans Affairs and we cannot get there without
research. And we cannot get research without ending
prohibition.
Mr. BURCHETT. Ma'am?
Ms. CHAVES. I am not here to discuss the particulars of the
components of the drug itself because that is not my area of
expertise. My area of expertise is in the banking of these
businesses and getting the cash off the streets.
Chairwoman VELAZQUEZ. The gentleman's time has expired.
The gentlelady from Iowa, Ms. Finkenauer, Chairwoman of the
Subcommittee on Rural Development, Agriculture, Trade and
Entrepreneurship, is recognized for 5 minutes.
Ms. FINKENAUER. Thank you, Madam Chair. And thank you all
for being here today, sharing your views, but then also your
expertise and scientific facts. It means a great deal that you
took the time to come and chat with us today.
And I have to tell you, before I had the great honor to be
a congresswoman from Iowa's 1st District, I was also in the
State House in Iowa for 4 years. So I got an up-close
experience of the journey of cannabis law and regulations very
specifically in my home state. And I would like to share with
you all just a moment that had really impacted myself as a
legislator and also on this issue in particular.
It was 2017. We were at the end of session, so it was the
last night of session. We were all there until I think it was 7
o'clock in the morning trying to get something done. There were
two bills left that we were trying to get done. One had to do
with CBD oil and medical cannabis, and one had to do with water
quality. And I remember that night, again, folks showing up
into the gallery who had been working on both of these issues,
and I walked up there and I got to meet a little boy named
Brady and his mom Quincy. You see, Brady and Quincy are of the
Sac and Fox Tribe and they are Meskwaki. And so they had come
back to Iowa after living in Colorado for a couple of years so
Brady could get the treatment that he needed because he has
seizures that basically immobilize him. And for years had
actually, again, lived in Colorado to be able to treat that.
But because of being Sac and Fox, and also obviously Meskwaki,
wanted to come back home and be with family. And the year or
two before this they came to the state capital and Quincy was
told by the state representative that if you care about your
son you will go back to Colorado. And I will never forget
hearing that story, and I will never forget those moments with
Quincy and Brady up in that gallery as I heard their story
personally. And again, I knew that we had a heck of a lot of
work to do in Iowa and across the country to educate folks
about, again, cannabis and its uses. And again, it was quite
the journey in Iowa. That year, we did end up passing something
that was not what we all wanted but it was a pilot program that
made CBD oil available to patients with eligible medical
conditions like cancer or Parkinson's disease. Unfortunately,
it left off many issues that are considered women's health
issues, like polycystic ovary syndrome, endometriosis, just to
name a few. And then this year, the State House did make some
serious gains trying to expand access to other cannabis
products to help treat patients. Unfortunately, and again, many
gains were made bipartisanly in the state of Iowa, passing both
the Republican-controlled State House and State Senate, but
just a few weeks ago our governor happened to veto that bill,
the reasons being she said addiction. Although earlier that
week she signed a sports betting bill. So again, it is very
frustrating on my end being an Iowan and hearing stories that
so many of my constituents have dealt with and dealing with,
again, lack of certainty and regulations and needing more
certainty. And part of that is having access to medical
cannabis and cannabis in general in the state of Iowa and
making sure that we have the producers in Iowa. And one of the
companies that I have talked with, MedPharm, expressed their
frustrations where right now they are manufacturing in Iowa and
they are trying to make safe, effective products but at the
same time are unsure every single day about what the future of
the industry looks like.
And I do not know if Ms. Penny, I know we only have a few
minutes here, but if you can touch on what the uncertainty that
we see in states like Iowa can cause manufacturers to be able
to deliver product and then also grow their business when there
is such an opportunity to do so.
Ms. PENNY. Sure. The contradiction between the Federal
Government and the state government is a reason for any
business owner to pause. When you are well-funded though you
will notice that you do not pause as much. When the Cole Memo
was rescinded, the members of MCBA were the only people in the
industry that I really felt were really concerned because
everybody else was going to be able to work around it. When you
start to think about a small farmer and their opportunity, we
have to end Federal prohibition so that they can feel
comfortable getting into this industry and creating the
businesses that then create jobs and tax revenues for those
communities.
Ms. FINKENAUER. Thank you, Ms. Penny. I appreciate it. And
I know my time is about to expire, so I yield back. And thank
you, Madam Chair.
Chairwoman VELAZQUEZ. The gentlelady yields back.
And now we recognize the Chairman of the Subcommittee on
Contracting and Infrastructure from Maine, Mr. Golden, for 5
minutes.
Mr. GOLDEN. Thank you, Madam Chair.
Two questions if I have time. First, for Mr. Goepel. You
are getting asked a lot about this but I just wanted to give
you more opportunities to talk about it because I think it is
important.
I was actually somewhat concerned and skeptical early on
about the potential harmful side effects of marijuana use on
veterans. I am one myself in Afghanistan and Iraq. I was
diagnosed with post-traumatic stress coming home from Iraq back
in 2006. But I have just heard repeatedly from veterans and
mental health care experts with specialization in providing
care to veterans that it can be life-changing in a positive way
for a lot of veterans. And so I have come around to believing
it. But I have also heard those same professionals and veterans
say that if not used correctly it can have negative impacts as
well. You know, there is a fine line there and veterans need
guidance. And they need help finding the right approach.
And of course, I call it a gag order really where VA--we
know a lot of veterans go to the VA for their health care but
when it comes to this they are stepping outside the system.
They are still going to the VA for their health care because
that is what is affordable for them.
So what can we do? If it is not the VA and getting rid of
the prohibition, what else can be done to help get information
to veterans so that they have the best shot at experiencing the
positive medical benefits?
Mr. GOEPEL. I think, you know, only 6 million veterans use
the VA for health care, so that leaves about 14 million
veterans outside the VA. Outside VA care either with no care or
private care. Or, you know, employer tied care. And this is an
issue that I have seen in California where it is legal but
there has been no real effort at the state level to educate
consumers about what is now legal.
And the research that is being produced about cannabis and
various cannabinoids, because we talk about cannabis as a plant
but that plant holds 120-plus active components which all seem
to have some sort of medical effect, and only a few are
actually psychoactive or cause euphoria. So to essentially
throw the entire plant out because there is a fear of THC
making people, I do not know, relaxed or happy. I mean, this is
the tension. Right? We are penalized and stigmatized for using
something that we recognize to be far less harmful, far more
effective while being compelled in some cases to take
psychoactive, heavily addictive, toxic medications. There is no
known fatal dose of cannabis use. That cannot be said of any
other drug veterans are regularly prescribed from nonsteroidal
anti-inflammatory drugs, like ibuprofen, to gabapentin, to
opioids, again, to benzodiazepines. You can name the sort of
class of drugs that veterans get prescribed, and they all carry
toxic and destructive side effects.
But with cannabis, veterans, and all Americans essentially
need an education about what this plant is, and you do that by
educating the doctors first because they are usually the
gatekeepers of medical knowledge in our society.
So I will leave it at that. Thank you.
Mr. GOLDEN. Yep. Educate the doctors. You know, the
situation I am talking about are those veterans in the VA
system though who are choosing to use medical marijuana and
then are going to their VA doctors and they are not disclosing,
or if they are, being told that it is threatening their VA
services and access to it. Right? So it is a huge problem and
one that I think we ought to figure out.
Ms. Chaves, in Maine, I am only aware of one bank in the
entire state, in a state that has now first allowed for medical
use and now has decided through voter referendum to do a
legalized sale as well on recreational use, only one bank
willing to work with any business related with this as we move
forward. I thought I might give you an opportunity to kind of
talk about how that may have negative impacts on small
businesses only having one bank to go to. What are some of the
negative consequences for them?
Ms. CHAVES. The negative consequences for the bank is----
Mr. GOLDEN. I am more interested for the small businesses.
Ms. CHAVES. The small businesses, depending on the size of
the bank, and I am sure it is fairly small so they cannot
handle a lot of the businesses that are opposing up, the impact
that it makes is that these businesses have to stand in line
for bank accounts and if they are typically not doing as large
a revenue they get pushed toward the bottom of the barrel or
the end of the line. So their opportunity for banking is
stretched out further away. And so they are unable to do
business in a legal manner with banking.
Mr. GOLDEN. All right. Thank you for that. What you are
describing is inadvertently it is almost encouraging somewhat
predatory behavior because like you are saying, if you are not
big enough for us to see the most value in it then we are not
working with you. We are going to go work with like the bigger
businesses; correct?
Ms. CHAVES. Definitely.
Mr. GOLDEN. Thank you.
Chairwoman VELAZQUEZ. The gentleman yields back.
Now we recognize the member from New York 19, Mr. Delgado,
for 5 minutes.
Mr. DELGADO. Thank you, Chairwoman.
Thank each and every one of you for coming out and
testifying before this Committee. I appreciate your perspective
on this issue.
Ms. Chaves, there are a lot of dairy farmers in my district
who are seeking additional sources of income in a difficult
farm economy, as well as communities that are looking to
attract new industries to help them revitalize. And New York
has until its legislative session ends today to determine if it
will legalize recreational use of marijuana. I actually think
it may have actually happened in the last hour or two. But
which could potentially in a way that is not legal. I am not
sure at this point but, which could potentially have a huge
economic benefit on the district if it were to be legalized.
However, even if the state does legalize cannabis, there
will still be many hurdles at the Federal level for folks
looking to enter the industry to overcome. What steps, and
forgive me if this has been addressed already, but what steps
can Congress take to make sure that new startups and existing
small businesses can access this market and spur economic
growth in rural communities like mine?
Ms. CHAVES. For starters, these small businesses need
capital to even apply for their license. The licenses in each
state, the fees are astronomical and they are getting more and
more expensive. So it really knocks out the small business
person for these licenses.
Second of all, if they get through the process of getting a
license, they have no banking. They cannot operate as a normal
business would act. They cannot pay their bills. They cannot
get lease agreements for their property, their brick and
mortar. They cannot operate as a normal business. This impacts
the entire community, as well as the economy.
Mr. DELGADO. I have one follow up there.
I am also on the Agriculture Committee and I know that last
year's Farm Bill removed hemp from the Controlled Substances
Act, but the FDA still has strict regulations on hemp products.
I have heard from folks back home about how this stringency
creates a difficult and uncertain business environment. Which
steps in your opinion should the FDA take to make it easier for
dairy farmers to work in the hemp industry?
Ms. CHAVES. It is education and Congress also needs to
understand that hemp is not an infused plant. There is no THC
value, and therefore, should not be treated as a THC plant.
Therefore, regulation should be different from cannabis making
it easier for these companies or agriculture to enter the
business.
Mr. DELGADO. All right. Thank you.
I yield back.
Chairwoman VELAZQUEZ. The gentleman yields back.
The gentleman from Illinois, Mr. Schneider, is recognized
for 5 minutes.
Mr. SCHNEIDER. Thank you, Madam Chairman. I want to thank
the Chairwoman and the Ranking Member for having this hearing.
I want to thank the witnesses for your testimony, for sharing
your insights and experiences on what is an important issue.
As the others have, I am going to focus on you, Ms. Chaves.
I apologize. I will try not to be redundant. But it has been
talked about the challenges these small businesses are facing
without the access to full banking services because of
restrictions. I will not repeat the other questions but one of
the thoughts I have is not just that it is hard to get started
for the businesses that are there. It is hard for them to grow.
And I would love for your thoughts on what you are seeing the
constraints on growth.
Ms. CHAVES. The problems with them being able to grow is
they need capital in order to do so. And without that capital
or the ability for us to lend them the capital to grow, they
cannot expand, they cannot hire new employees, they cannot
develop new products, and that really inhibits their entire
growth and at times puts them out of business.
Mr. SCHNEIDER. Sure. One of the things I know from my
experience working with entrepreneurs, entrepreneurs find a way
of working around, and I am sure you have seen, as we have seen
in Illinois, medical marijuana is not moving to recreational
marijuana. These business people are going to find workarounds.
What are some of the examples of workarounds you have seen in
the marketplace?
Ms. CHAVES. They create pseudo companies, holding companies
under different names and entities so as to mask their true
industry, their true identity so that they can manage to get
away and provide, obtain banking access. Unfortunately, banks
are getting on to this and they do find out. And when they do
find out, these accounts do get closed.
Mr. SCHNEIDER. Sure. And one of the other things I am
hearing is a lot of these businesses are holding cash. It makes
them a target and increases some of the risk to the businesses
and the communities within which these businesses are
operating. Are you seeing that at all as well?
Ms. CHAVES. Yes. And the problem with that is the banks
that do decide to create a banking program, we are not able to
accept the cash that they have held on to previously so that
cash is no good. If we accept the cash from previous sales or
previous months, we have to have a forensic accountant come in
and validated all that cash. And that is very expensive and
time consuming.
Mr. SCHNEIDER. Thank you.
I will just emphasize as more and more states are moving
towards this and trying to create opportunities for businesses,
I know the rest of you have talked about opportunities in
minority businesses, other situations, the ability to have full
access to capital, full access to banking services is crucial,
and it is something that I hope we can address here in Congress
and work with the states as well to allow these businesses to,
as you said, Ms. Chaves, to grow, to create jobs, and to move
the industry forward in a way that is constructive for all
stakeholders.
So again, I want to thank the witnesses for being here
today, and with that I will yield back.
Chairwoman VELAZQUEZ. The gentleman yields back. Thank you
so very much.
I just have one question and then the Ranking Member, if
you have any other comment or question.
Mr. Goepel, we heard statements and comments here like
people want to get high or that the use of cannabis will lead
as a gateway to other drugs or that it will encourage children
and teens to use it. And I have read, and I was not high, that
the National Institute on Drug Abuse had found that despite
increasing legalization for adult use, it is not leading to
corresponding increases in marijuana use for teens. Can you
comment on that?
Mr. GOEPEL. Yes. The National Institute for Drug Abuse has
long been looking for harms for cannabis. You know, the idea
that we do not do research on cannabis is not true. We do
plenty of research, it is just looking for specific faults
essentially. And those are the only studies that essentially
can get funded by the Federal Government or get approval by the
Federal Government. So for NIDA to release findings that
undermine their position, I think it shows just how much or how
wrong, excuse me, you know, Congress and the Federal Government
has been in the way that they treat cannabis just as a plant.
And specifically, the cannabinoids that the plant consists of.
For example, you know, the DEA has already rescheduled
dronabinol, which was brought up, which is synthetic THC. But
it is chemically identical to THC found in the plant. And they
put that as a Schedule III drug, which while not a Schedule I,
is still inappropriate because that category also contains
drugs like ketamine and Vicodin, which I do not think anyone
would argue that those drugs are comparable to THC. And the
fact that CBD and the FDA sent a letter to the DEA asking for
CBD to be put on Schedule V, which is the least restrictive
schedule in the Controlled Substances Act because they found
that it did not even really meet the requirements for
scheduling.
So what we have in the cannabis plant is a lot of
substances, a lot of compounds. We understand a couple of them.
But what we have failed to understand, and largely because of
the prohibition on research, is the way that all these
compounds interact and influence each other. We understand that
CBD, for example, can have an effect on reducing the psycho
activity of THC. So if that is a concern, then there are ways
to formulate a drug to avoid that terrible outcome of euphoria.
I guess the broader point here is that we cannot keep going
around and around saying, well, these are the harms, these are
some of the benefits, but we cannot actually do substantive
research because prohibition exists and because of the
scheduling of the whole plant on Schedule I.
Chairwoman VELAZQUEZ. Thank you.
Now I recognize the Ranking Member for 5 minutes.
Mr. CHABOT. Thank you. I will not use the whole 5 minutes,
Madam Chair. I would just maybe sum it up on our side to some
degree.
Chairwoman VELAZQUEZ. Sure.
Mr. CHABOT. Mr. Hagedorn mentioned that he kind of grew up
during the Just Say No Reagan era, and not as a child he grew
up then but he was aware of what was going on at that time as
well, and I was, too. I think I was on the Cincinnati City
Council during that time. And we had a real problem with crack
cocaine that was going on. That was one of the things that led
to Just Say No. We had about 10,000 deaths a year due to drug
overdoses at that time. Now the most recent year it was 70,000.
So from 10,000 to 70,000 overdose drugs. It is not marijuana,
obviously. We are talking opioids. But nonetheless, illegal
drugs. So it seems somewhat ironic to me that we are having a
hearing considering the uses and the effects on small business
and in essence it is about legalization and,that is kind of
what this ultimately is leading to of marijuana. And at the
same time when we have got this opioid crisis that has been
epidemic that has killed so many Americans all across the
country and we really have not got a complete handle. Yes, we
passed CARA. We passed the Support Act about a year ago. And so
we have made some legislative progress, but the problem is
still out there and people are still dying.
But at the Federal level, I mean, clearly all the stuff we
have talked about here is inconsistent with Federal law right
now. It is illegal if the law was enforced at the Federal
level. And that is something that I think probably the Congress
ought to take it up and make a decision to let people know what
they can do is legal or not. Right now it is illegal at the
Federal level and I am also on the Foreign Affairs Committee
and the Judiciary Committee as well as being the Ranking Member
of this Committee. But on the Judiciary Committee, I remember
well asking the new attorney general at that time, Jeff
Sessions, what was the administration's policy going to be
relative to enforcing the Federal drug laws? Not because I was
trying to influence him to go in one direction or another, but
just to see what it was. And he indicated to me at that time
that they had no plans at that time to do anything inconsistent
or dramatically different than the previous administration,
meaning the Obama administration, which was basically not to
enforce the Federal laws.
So I would say in the near future there is probably no
reason to think that that is going to change. I think we ought
to clarify it one way or the other so the public is out there
not breaking Federal law because it could be enforced some day
and a lot of people are going to invest a lot of time and money
into something which is right now illegal. And so we ought to
clarify that. I think we owe that to the public. And I do not
know which way the vote would go. I mean, I know the way I
would probably vote. I think most of you would know from what I
said today. I think it is not a good idea because I think the
down sides of this outweigh the up sides. Maybe not from a
financial perspective, especially from those that profit from
it, but I have not been convinced that the benefits outweigh
the dangers. But then I have been around a long time and it
seems like the older generation more feel that way. The younger
generation seem to be just the opposite. And a lot of things
have changed in this country in recent years and that seems to
be one of them. So, we will see where this all goes. And I
almost did take the 5 minutes.
So I will give you one minute back. I yield back. You can
wrap this up, Madam Chair.
Chairwoman VELAZQUEZ. The gentleman yields back. And
definitely, as I stated at the beginning of this hearing, this
is a complex and emerging industry, and Ranking Member, public
sentiment is everything. Things that we thought we would not
deal with 10 years ago, 20 years ago, public policies have
changed because research and thought-based information help us
craft legislation that will address the new discoveries and the
new research.
So let me take this opportunity to thank all the witnesses
for being here and testifying on this very important issue. My
priority is to ensure that small businesses have a seat at the
table and can be involved in this emerging industry. The fact
and the reality is that the trend of legalization at the state
level is not going to slow down, which will lead to more jobs
in many sectors of our economy, and we need to see what role
the federal government can play. We have now heard about the
opportunities and challenges for entrepreneurship and small
business growth the legal cannabis industry presents for small
firms. It is clear that this conversation is just beginning,
and I am hopeful we can take a thoughtful approach to
addressing the many aspects of legalized cannabis, particularly
as it relates to protecting the interests of the small business
owners operating in this space.
As I have done with other topics on this committee, I look
forward to working with my colleagues on both sides of the
aisle to find workable solutions to these problems.
I would ask unanimous consent that members have 5
legislative days to submit statements and supporting materials
for the record.
Without objection, so ordered.
And if there is no further business to come before the
committee, we are adjourned. Thank you.
[Whereupon, at 1:05 p.m., the Committee was adjourned.]
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