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Will Missouri’s Legalization of Weed Pressure Congress?

The state recently voted to legalize marijuana for recreational use, joining 20 other states across the nation. Some hope growing support for the drug will encourage members of Congress to drop their resistance.

Nate Ruby, who runs Illicit Gardens
Nate Ruby, who runs Illicit Gardens, a large cultivator of medical marijuana in the Kansas City area.
(Rich Sugg/The Kansas City Star/TNS)
(TNS) — If you sell marijuana in Missouri, even legally, there’s always the worry of getting robbed.

Because of the drug’s illegal status at the federal level, most cannabis businesses can’t accept credit card payments from customers, resulting in a lot of cash payments.

“Without credit cards, dispensaries operate, very cash heavy,” said Nate Ruby, the president of Illicit Gardens, a Kansas City area cannabis business. “Which forces them to have a lot of cash on hand, which can result in higher potential for robberies.”

That means heightened security at dispensaries, including cameras to make sure the businesses are safe.

It’s one of the many realities of the cannabis businesses operating amid uncertainty in a relatively young industry where they’re constitutionally protected in their home state while still considered illegal by the federal government. But while Missouri marijuana businesses straddle the line between locally legal and federally illicit, it hasn’t won them the support of the state’s mostly Republican congressional delegation.

Ruby’s cannabis company’s name is Illicit for a reason — it’s intended to draw attention to his product’s legal status and people who have been imprisoned for nonviolent cannabis crimes.

Nearly 30 years ago, states began the process of legalizing marijuana. It started with medicinal marijuana in California and then, 10 years ago, states began legalizing the drug for recreational purposes. Now, 37 states allow cannabis for medical use, including 21 states that have legalized the drug for recreational purposes, according to the National Conference of State Legislatures.

The federal government has been slow to follow their lead.

President Joe Biden last year pardoned all people charged with simple possession of marijuana — a relatively small number of those serving prison sentences for drug crimes — and asked his administration to launch an administrative review into rescheduling the drug.

But while rescheduling the drug would alleviate some of the tension between federal laws and state laws, there has been little action since Biden’s announcement in October. The drug is still listed in the federal government’s most illicit category — alongside heroin and ecstasy — and listed as more dangerous than methamphetamine.

Missourians’ recent vote to legalize recreational cannabis for adults over 21 could increase pressure on its lawmakers to represent the will of voters — even as many of them aren’t personally or politically inclined to support marijuana legalization.

Two of the state’s newest Republican lawmakers illustrate the divide. One is putting himself firmly behind the federal government’s definition of the drug while another is cautiously weighing where to land on the issue.

“It was passed by majority and it’s obviously what Missouri wants,” Ruby said. “There needs to be some policy changes to protect both businesses, consumers, patients, and the government, state governments as well.”

Josh Mitchem, the CEO of the Kansas City-based CLOVR, said a bill called the SAFE Banking Act is at the top of his list for ways the federal government can help the cannabis industry. The bill has not been introduced yet in this Congress, but under previous versions it would create legal protections for banks that provide services to cannabis-related businesses, potentially allowing for cannabis businesses to take credit cards and take out loans to start and grow their businesses.

“We’ve been fortunate in Missouri to have several local banks willing to work with cannabis companies, but from a federal level, US Bank, Bank of America, PNC, Chase, none of them will touch cannabis businesses,” Mitchem said. “Credit card processors won’t touch cannabis businesses because because of the federal classification of it.”
Josh Mitchem, the CEO of Clovr
Josh Mitchem, the CEO of Clovr, a Kansas City manufacturer of marijuana infused products.
(Rich Sugg/The Kansas City Star/TNS)
Jeremiah Mosteller, a senior policy analyst for Americans for Prosperity who specializes in criminal justice issues, said under federal law, cannabis companies are seen at the same level as drug cartels.

“Technically, they’re violating federal law in a similar way that cartels do,” Mosteller said, referring to cannabis companies. “So themselves, and then every financial institution that touches them, would be subject to money laundering penalties, (racketeering) penalties, and a slew of other penalties.”

Missouri’s federal delegation hasn’t necessarily been clamoring to get on board with the 53% of Missouri voters who elected to make recreational cannabis legal in their home state.

Newly elected Rep. Mark Alford, a Republican from Lake Winnebago, rejected the idea of making banking easier for cannabis businesses, taking the federal government’s stance that the drug is illegal.

“This legislation would allow financial institutions to facilitate a money laundering scheme for marijuana sellers by holding proceeds from the sale of a schedule 1 narcotic and I am adamantly opposed to this,” Alford said.

Republican Sen. Eric Schmitt, the former Missouri Attorney General who was elected to the Senate last year, hasn’t been as quick to come down against the fledgling industry, recognizing both the public safety concerns of businesses moving large amounts of cash and concerns by the Department of Justice that some of the bill’s definitions were too broad when originally written.

“Senator Schmitt is currently evaluating the SAFE Banking Act and its potential application in Missouri and across the country,” said Will O’Grady, Schmitt’s press secretary.

Like Schmitt and Alford, voters cast a ballot legalizing a form of cannabis the same year they chose Republican Sen. Josh Hawley — only in his case, they voted to allow medicinal cannabis.

Yet, that vote has not made Hawley, who has tried to build a “tough on crime” persona in the Senate, more willing to engage in cannabis policy. He’s never signed on to iterations of the SAFE Banking Act during the various attempts to pass it through Congress, even though it earned the support of some Republican lawmakers whose states have legalized the drug in some form.

Hawley demurred when asked whether he would pay more attention to cannabis policy now that Missouri had fully legalized the drug, saying he believed it was up to the Department of Justice.

“It’s always been a weird kind of conflict sort of here with federal law,” Hawley said. “But that’s the kind of DOJ’s own making over the years so I don’t know how that will get resolved or if the Controlled Substances Act will just basically become a dead letter.”

One Missouri congressman who appears fully in support of cannabis is Democratic Rep Emanuel Cleaver — though he made a point to say he has never imbibed.

“I agree with the majority of Missourians who believe Congress should take constructive steps to end the federal prohibition of marijuana and, at minimum, allow small businesses in the cannabis industry to safely access banking services,” said Cleaver, who represents Kansas City. “A continuation of the federal prohibition of cannabis will only stifle lawfully-operating small businesses and endanger workers who are forced to conduct business with cash, rather than through other legitimate and regulated financial services.”

The Democratic-controlled House passed both a version of the SAFE Banking Act and a bill called the MORE Act, which would decriminalize cannabis. Both failed to make it through the Senate, where they would need bipartisan support.

Now, with divided government, it may be even more difficult for the legislation to pass, even though members of the Senate are once again talking about how to approach the bill.

“Personally, I don’t see any changes happening in the near future,” Ruby said. “But it would be extremely helpful to say if SAFE Banking passed. I mean, it’d be huge progress for everyone.”

©2023 The Kansas City Star. Distributed by Tribune Content Agency, LLC.
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