Monday, April 17, 2017

How Republicans and Democrats in Congress are joining forces to defeat Sessions’ war on weed

Rep. Carlos Curbelo is a two-term Republican from a South Florida district that was once the epicenter in the country’s war on drugs. But last month Curbelo, one of a new generation of Cuban-Americans in Congress, did something that, not too many years ago, would have been unthinkable. He co-sponsored a bill that is the top priority for the nation’s booming marijuana industry.

Dubbed the Small Business Tax Equity Act, Curbelo’s bill would let legal pot dealers take advantage of the same tax deductions and credits as any other business, a move that industry experts say would slash the effective tax rates for weed dispensaries in half.

“One of my goals in Congress is to ensure the law treats all enterprises with fairness and equity,” he said in a statement explaining his decision to join a liberal Oregon Democrat, Earl Blumenauer, in co-sponsoring the measure.

It didn’t hurt Curbelo that his move won instant plaudits from influential GOP tax reform guru Grover Norquist — a longtime champion of legalized pot — who decries the “arbitrary and punitive” treatment of legal marijuana dealers in the tax code. Nor is it likely to hurt Curbelo back home: Last November, 71 percent of Florida voters approved a medical marijuana measure on the ballot, making the Sunshine State one of the latest in a long line of states that have either legalized pot altogether or allow it to be sold for medicinal purposes.

“Look — it’s increasingly clear people in our country are accepting of marijuana,” Curbelo said in an interview with Yahoo News. “Millions and millions of voters have decided they want marijuana use to be legal for medical purposes or, in some cases, for recreational purposes. For those of us who are small-“c” conservatives who believe in the Tenth Amendment, we should defer to the people of Florida and other states … we shouldn’t get in the way.”

The efforts of Republicans like Curbelo and Norquist are one reason why Attorney General Jeff Sessions’ hopes of reimposing strict enforcement of federal marijuana laws are likely to meet strong bipartisan resistance — and may ultimately go nowhere. Ever since he took over the Justice Department, the 70-year-old Sessions, an unrepentant drug warrior, has made clear his disdain for pot. “I don’t think America is going to be a better place when people of all ages, and particularly young people, are smoking pot,” he told reporters in February shortly after being sworn in.

And now Sessions seems to be doing something about it. He released a memo to the country’s U.S. attorneys unveiling a Task Force on Crime Reduction and Public Safety whose mission is to review department policies on charging, sentencing and the current enforcement of marijuana laws.

“Everything is on the table; we’ll be looking at everything,” said a senior department official when asked what the task force’s goals will be when it comes to marijuana enforcement. The official, however, declined to offer any clues to what Sessions specifically has in mind, saying little more than “we may be able to say something more by June.”

To be sure, the sale and even possession of marijuana remains a federal crime, punishable by prison time and hefty fines — even in states that have repealed their own pot prohibitions. But just how far Sessions will be able to go in implementing his anti-pot agenda is far from clear, given the shifting political winds on the issue. Thanks to changing cultural attitudes and the steady march of legalization initiatives at the state level, the pro-pot cause is only gaining momentum, making it increasingly harder for foes like Sessions to slow it down, much less stop it.

It’s not even clear Sessions will get the cooperation of his fellow cabinet members. Homeland Security Secretary John Kelly, questioned on “Meet the Press” Sunday, said that marijuana is “not a factor” in the country’s drug problems and that “arresting a lot of users” was not the answer.

“It’s absolutely powerful now. This is a political movement,” said Norquist, who is quietly lobbying to get Curbelo’s proposal slipped into the massive tax reform bill that President Trump wants Congress to pass by this summer. “There are now guys in coats and ties making the case — not just guys in tie-dyed T-shirts.”

The strength of that movement was underscored recently after White House press secretary Sean Spicer first suggested that the Trump administration was looking at “greater enforcement” of the marijuana laws. Within days, eight senators — led by Sen. Elizabeth Warren, D-Mass., and Sen. Lisa Murkowski, R-Alaska — fired off a letter to Sessions urging him to stand down and to stick with the Obama Justice Department policy, embodied in the so-called Cole memo (signed by former deputy attorney general James Cole) that, as a matter of prosecutorial discretion, urged U.S. attorneys to lay off legal pot dealers in states that have set up their own regulatory schemes to supervise them. Even as Sessions was about to sign his new memo earlier this month, four state governors (of Alaska, Colorado, Oregon and Washington) launched a preemptive strike, sending their own letter to Sessions and Treasury Secretary Steven Mnuchin making a similar request. “As governors, we have committed to implementing the will of our citizens,” they wrote.

“What we’ve seen is a lot of pushback from both sides of the aisle,” said Taylor West, communications director for the National Cannabis Industry Association, the major trade group for the country’s pot sellers. “A couple of times now, there have been statements coming out of the administration, from Sessions or Sean Spicer, that seemed ominous for legal marijuana programs. But when follow-up is done and questions are asked, there is not a clear statement of policy changes. The clearest thing to come out of these episodes is the opposition to the idea that they might change the policy.”

So far, eight states (Alaska, California, Colorado, Maine, Massachusetts, Nevada, Oregon and Washington) and the District of Columbia have passed laws legalizing the recreational use of marijuana. Twenty-eight states plus the District of Columbia have medical marijuana laws. All this has led to a thriving, and steadily growing, domestic marijuana industry — meaning a new anti-pot crackdown would cost states tax revenue and jobs. A new study by Arcview, a market research firm, estimates there were $6.7 billion in sales of legal cannabis products in 2016, up 34 percent from the year before. Industry sales are projected to more than triple to $21.5 billion by 2021. The Arcview study notes that “there are only two obvious cases in recent decades” in which industries have experienced that kind of supercharged growth: “cable television in the 1980s … and broadband Internet access in the 2000s.”

The marijuana surge has produced an increasingly potent pro-pot lobby in D.C.: West’s National Cannabis Industry Association, which represents 1,200 legal pot sellers, employs high-profile lobbyists (Hillary Clinton super-bundler Heather Podesta was until recently under contract), has its own political action committee and throws fundraisers at a tony Capitol Hill wine bar where a growing number of members of Congress show up to schmooze and collect campaign checks. When the group recently announced it would be holding its annual “lobby day” this year on May 16, more than 300 members signed up to fly in — more than twice as many as last year — to press the industry’s case on Capitol Hill.

Part of this year’s pot industry “lobby day” agenda will be to play defense against any possible moves by Sessions. In the worst-case scenario, says West, the Justice Department could rescind the Cole memo and direct prosecutors to start “cherry-picking” businesses tied to the legalized pot trade — by suing landlords that lease to them, for example — or even raiding dealers themselves for violations of federal law. But she says her group’s members are not “panicking.” An even bigger part of this year’s agenda will be to play offense: pressing for changes in Treasury Department rules that would, for example, permit federally regulated banks to accept the business of marijuana dispensaries. (Right now, most won’t, out of fear of being accused of accepting income that is illicitly gained under federal law, forcing most dispensaries to do all their business in cash.)

The other top-of-the-agenda item is the Curbelo-Blumenauer tax bill — a big-ticket issue for the legal weed industry. As a result of a 1981 court case involving a convicted cocaine trafficker, businesses involved in selling illegal drugs under the Internal Revenue Service code are barred from taking the same standard deductions — for rent, office equipment, depreciation and the like — that any other business does. The pot industry badly wants that changed — and Norquist and Curbelo have a strategy to help them do it: Push the measure as part of a tax overhaul package, arguing that the current rule is a job-killer that amounts to a “35 percent sales tax” on legal weed. “I do think it’s a candidate for inclusion,” said Curbelo, who conveniently sits on the Ways and Means Committee and is positioned to make it happen. “This legislation is without question consistent with the goal of Ways and Means Republicans of simplifying the tax code and making it more coherent and more fair.” (A similar bill has been introduced in the Senate by Sen. Ron Wyden, D-Ore.)

Norquist even allows himself to hope that including the pot measure could bring some Democrats on board for a Trump tax reform bill. It may be far-fetched, but, Jeff Sessions notwithstanding, there are those who believe marijuana might turn out to be one issue on which a divided Washington can come together.


Source

No comments: