WASHINGTON (CIRCA) — Pro-cannabis advocates on Wednesday raised doubts about the credibility of the only voice of opposition at a hearing about the SAFE Banking Act, which would make it easier for banks to offer financial services to businesses within the cannabis industry.
Johnathan Talcott is employed as a lawyer at Nelson Mullins, which was hired to represent WeedMaps from September 2017 through December 2018. In the last quarter of 2018, WeedMaps paid Nelson Mullins $50,000 to lobby for its interests within the cannabis industry, including banking legislation, according to data collected by ProPublica.
At the hearing on Capitol Hill where he testified against the passage of the SAFE Banking Act, Talcott was speaking from his position as chairman of Project SAM, an organization that is pro-decriminalization but is firmly opposed to federal legalization.
“Mr. Talcott is a hypocrite of the worst kind," said NORML policy director Justin Strekal.
"I don't take any money from the pot industry," Talcott said in response to the allegations. "In fact, if I really wanted to make a lot of money I wouldn't be standing here right now."
Circa learned of Talcott's connection to WeedMaps through conversations with at least three pro-cannabis advocates or lobbyists present at Wednesday's hearing, and Talcott confirmed his employment at Nelson Mullins. He also appears on the firm's website. WeedMaps confirmed that they previously retained lobbying services through Nelson Mullins, but that their representative, David Quam, left this week for a different firm.
For the advocates who have been fighting Talcott on this issue, though, for some time, the association got them fired up.
"He believes in his position enough to be here and testify in Congress, but he works for a firm whose clients oppose what he's testifying to," said Don Murphy, Director of Federal Policies at the Marijuana Policy Project. "Anybody with a shred of integrity would just leave, it's that simple."
According to Talcott, none of the money Nelson Mullins received from WeedMaps benefited him.
"We have 800 lawyers and a lot of different conflicts of interest," Talcott said, explaining that the executives an Nelson Mullins will divert money that comes from a conflicting entity away from him if he asks. He did not specify if this was something he requested specifically for the funds coming into Nelson Mullins from WeedMaps, which since 2017 totals $310,000.
Talcott added that Project SAM does not accept money from the tobacco, pharmaceutical or the marijuana industries.
Murphy, who says he has previously appeared opposite Talcott on television to discuss cannabis legislation, disagrees that the dispersion of funds within a firm cannot be that clean.
"I mean, you know, who pays for the HVAC and the rent and all the other things?" asked Murphy.
"But you know," he continued, "if this is the best the opposition can do — to get a guy this conflicted to sit in Congress, to stand before Congress, and oppose our position — they don't have much. They didn't bring a doctor, they didn't bring a scientist, they brought a hack."
The reason? Cash.
Despite being fully legal locally, cannabis businesses in more than 30 states remain federally illegal and face hurdles in opening bank accounts. With no bank accounts, these businesses instead keep large amounts of cash on hand at dispensaries, farms and offices to pay suppliers, employees and taxes.
"There was a point where I regularly drove around with $12,000 in my glove box," said Lee Henderson, co-founder of HiFi Farms in Hillsboro, Oregon.
Now, the federal government is considering a bill, tentatively titled the Secure And Fair Enforcement (SAFE) Banking Act of 2019, to fix the cannabis industry’s banking problems. If passed, it would also become the first standalone cannabis legislation passed by Congress.
"This is going to be one of the first times in quite a while that we actually have a congressional hearing on a standalone cannabis-related bill," said Morgan Fox, media relations director for the National Cannabis Industry Association.
Currently, banks face barriers to providing accounts to the cannabis industry. Those barriers range from onerous fees to prosecution, and discourage banks and many credit unions from continuing to serve cannabis businesses or the people who work for them. The draft legislation of the new bill, acquired and published by Marijuana Movement, would permit banks to open accounts, issue credit cards, and offer loans to businesses within the marijuana industry without fear of negative consequences.
The draft bill states that federal regulators can't "prohibit, penalize or otherwise discourage a depository institution from providing financial services to a cannabis-related legitimate business."
And for some cannabis-related legitimate businesses, this legislation can't come soon enough.
"I've been through … three or four personal bank accounts in 4 1/2 years," Henderson explained. Everyone on his staff, he says, has at one point dealt with the dissolution of their personal bank account because they are employed in the cannabis industry.
"It was troubling," he continued. "If you have your credit card tied to your Chase account, and then suddenly you have to pay that off in 72 hours."
And the ripple effects range from paying taxes to armed theft and burglary.
"There’s literally people robbing delivery trucks because they know they’re bringing the product and coming back out with the money," explained Mitch Davis, a central California grower.
A series of store-to-home marijuana delivery driver robberies last week in the San Francisco Bay Area focused more on the cash they carried than the product they delivered.
"In a few robberies that we have, they've targeted cash and not even touched the marijuana," police Lt. Mike Kindorf of Concord, California, told KRON.
Davis points out that in a typical business, the retailer or the customer receiving product would transfer the money electronically to the producer or manufacturer, rather than hand off cash to the delivery driver.
And the dispensaries themselves are often the biggest target. While the use of credit or debit cards in cannabis dispensaries differs from state to state, and sometimes city to city, the overarching trend is an inability among dispensaries to offer card services to customers, or between dispensary and supplier. Because of that, dispensaries keep a lot more cash on hand, resulting, at times, in increased theft and robberies.
Those large amounts of cash, however, are one of the catalysts for getting this bill into a hearing. The American Bankers Association has stepped into the fray on Capitol Hill, pushing to get banking reforms passed for the cannabis industry.
During his remarks this morning at #ABACCB, @BankersPrez called for “Congress to step in and reconcile the gap between state and federal law when it comes to banking cannabis.” He added that the divide is creating public policy concerns for many communities. pic.twitter.com/IjOmo82afA— American Bankers Association (@ABABankers) February 11, 2019
"They've been involved in some pretty high-level talks with lawmakers and with advocates," Fox said. "To see how we can make this happen this year."
The last time a cannabis banking bill was introduced into Congress, it received more than 100 co-sponsors in the House and Senate, including Republicans like Sens. Rand Paul, Ky., and Cory Gardner, Colo., but it never made it to a hearing.
"I've worked on this for years all over the country," said Rep. Earl Blumenauer, D-Ore. "Nobody thinks it's a good idea to prohibit them from having banking services."
Blumenauer has been pushing for cannabis legislation longer than most other legislators on Capitol Hill. His district includes Portland, Oregon, and its surrounding areas that are home to hundreds of cannabis businesses—like Lee Henderson's farm.
WATCH: Why Rep. Earl Blumenauer thinks President Donald Trump would pass cannabis legislation if it reaches him
Banking is part of Blumenauer's holistic approach to cannabis reform; last fall, he issued a comprehensive plan for Congress with steps that move the federal government down the path toward full federal legalization. According to his plan, full recreational legalization could come as soon as the end of 2019.
Getting banking reform passed is step one, and in the congressman's words, is "as close to a given as you're going to get."
According to Blumenauer, the main reason a change in federal cannabis laws didn't happen sooner was eight years of Republican leadership on key committees. Now, the congressman says, he has Democratic leadership and bipartisan support for many of his initiatives. And he isn't worried about the GOP-helmed executive branch, either.
"Donald Trump I don't think actually cares about this," he said, pointing out that the president has voiced support for states' rights on the issue of legal cannabis in the past. "I think ultimately the administration will approve if not try and run to the front of it. If the train starts moving, somebody might want to get ahead of the party."
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