House Minority Leader Nancy Pelosi talks budget, guns, pot in Denver

Posted:   03/11/2013 07:17:02 PM MDT
Updated:   03/11/2013 09:03:51 PM MDT

By Electa Draper
The Denver Post

House Minority Leader Nancy Pelosi calls the congressional impasse on deficit reduction a values debate that boils down to “big oil v. little children.”

“We all know we have to reduce spending,” Pelosi said in a meeting Monday afternoon with The Denver Post editorial board. “But we also really need more in revenue.”

Closing tax loopholes for wealthy special-interest groups isn’t a tax increase, as some Republicans argue, she said, but a reduction in tax expenditures.

“We’re confronted with sequestration and its aftermath,” she said. “I’m always hopeful. We could close $800 billion in tax loopholes.”

Republican leaders have said President Barack Obama got his tax increase (retirement of Bush tax cuts for wealthier Americans) in the last round of budget negotiations, and it’s time to focus on spending cuts.

Rep. Jared Polis, D-Boulder, who joined Pelosi at the Post, said Congress could make U.S. corporate tax rates more competitive globally, yet end special-interest breaks that are “corporate welfare.”

Pelosi said the biggest oil producers are given $38 billion in tax subsidies as incentives to drill, when the $1 trillion in profit they make should be enough incentive.

Republicans, she said, contend they instead could cut $38 billion from Pell grants (need-based money for undergraduate education).

End tax breaks for businesses that send jobs overseas, Pelosi suggested, or reduce tax subsidies for corporate jets by $3 billion, rather than, as sequestration required, take away 4 million Meals on Wheels for the elderly or cause 78,000 kids to be kicked out of Head Start early education programs.

Sequestration went into effect March 1 — more than $1 trillion in cuts over 10 years in spending on discretionary programs — everything from defense to education. It amounts to $85 billion in spending reductions by Sept. 30, the end of this fiscal year.

Pelosi said every dollar spent must be scrutinized. There are ways to save money in Medicare without cutting benefits, she said, such as examining regional disparities in reimbursements to care providers and rewarding good patient outcomes rather than paying most to those who order the most procedures.

“We want to reduce (return) visits to hospitals. There is a lot of money to be saved there. And it should be done anway because it’s fair,” Pelosi said. “We want value, not volume.”.

Other debates preoccupying Congress — gun violence and immigration reform — show varying degrees of resolution, she said.

Pelosi said she is most optimistic about the chances for comprehensive immigration legislation passing that protects borders, economic interests and charts some path to citizenship.

“It should happen, and it should happen soon,”she said.

In the gun violence debate, she said she believes it would be almost impossible to pass an assault-weapons ban. Even within the Democrats’ Caucus there is disagreement on such a ban, but there is growing consensus on limited magazine capacity.

“Where we can make the most difference is with background checks and information shared,” she said. “Let’s keep guns out of the wrong hands. There’s more of a rally around background checks … and some (Democratic) unity around mental-health issues.”

Pelosi said the federal government should not fund enforcement of its marijuana laws in states that have legalized medical marijuana and in Colorado and Washington, which have also legalized recreational use of pot.

“The state (Colorado) has spoken. The law has been passed,” Pelosi said. “There are issues with taxation and regulation, and we need to get on with it.”

Electa Draper: 303-954-1276, or


03 2013

Top Doctors Association Says “YES” to Medical Marijuana in Historic Endorsement

Medical marijuana

Protest in CA against medical marijuana raids (photo courtesy ASA)

by Phillip Smith, February 20, 2008, 11:00pm, (Issue #524)

In a position paper, a leading American medical association has endorsed the medicinal use of marijuana, called for more studies of its medical uses, and urged the US government to get out of the way. The position paper from the American College of Physicians was released last Friday after being approved by the group’s governing body.

The American College of Physicians (ACP) is the nation’s second largest doctors’ organization, behind only the American Medical Association. It is made up of some 124,000 internal medicine specialists dealing primarily with adults.

The college pointed to strong evidence that marijuana has proven useful in treating AIDS wasting syndrome, glaucoma, and the nausea and vomiting associated with cancer chemotherapy treatments. The college also noted that there is anecdotal evidence for many other medical uses of marijuana, but that research had been stymied by “a complicated federal approval process, limited availability of research grade marijuana, and the debate over legalization.” The science of medical marijuana should not be “hindered or obscured” by the controversy over legalizing the plant for personal, non-medical use, the group said.

“This is a historic statement by one of the world’s most respected physician groups, and shows the growing scientific consensus that marijuana is a safe, effective medicine for some patients, including many battling life-threatening illnesses like cancer and AIDS,” said former US Surgeon General Dr. Joycelyn Elders in a press release from the Marijuana Policy Project. “Large medical associations move cautiously, and for the American College of Physicians to note ‘a clear discord’ between scientific opinion and government policy on medical marijuana is a stinging rebuke to our government. It’s time for politicians and bureaucrats to get out of the way of good medicine and solid research.”

“This statement by the American College of Physicians recognizes what clinicians and researchers have been seeing for years, that for some patients medical marijuana works when conventional drugs fail,” said Dr. Michael Saag, director of the Center for AIDS Research at the University of Alabama-Birmingham. “One of the challenges in HIV/AIDS treatment is helping patients to adhere to drug regimens that may cause nausea and other noxious side effects. The relief of these side effects that marijuana provides can help patients stay on life-extending therapies.”

“This statement by America’s second largest doctors’ group demolishes the myth that the medical community doesn’t support medical marijuana,” said Marijuana Policy Project executive director Rob Kampia. “The ACP’s statement smashes a number of other myths, including the claims that adequate substitutes are available or that marijuana is unsafe for medical use. 124,000 doctors have just said what our government refuses to hear, that it makes no medical or moral sense to arrest the sick and suffering for using medical marijuana.”

While the ACP position paper consists of 13 closely reasoned pages, the group summarizes its medical marijuana positions thusly:

Position 1: ACP supports programs and funding for rigorous scientific evaluation of the potential therapeutic benefits of medical marijuana and the publication of such findings.

Position 1a: ACP supports increased research for conditions where the efficacy of marijuana has been established to determine optimal dosage and route of delivery.

Position 1b: Medical marijuana research should not only focus on determining drug efficacy and safety but also on determining efficacy in comparison with other available treatments.

Position 2: ACP encourages the use of non-smoked forms of THC that have proven therapeutic value.

Position 3: ACP supports the current process for obtaining federal research-grade cannabis.

Position 4: ACP urges review of marijuana’s status as a schedule I controlled substance and its reclassification into a more appropriate schedule, given the scientific evidence regarding marijuana’s safety and efficacy in some clinical conditions.

Position 5: ACP strongly supports exemption from federal criminal prosecution; civil liability; or professional sanctioning, such as loss of licensure or credentialing, for physicians who prescribe or dispense medical marijuana in accordance with state law.

Similarly, ACP strongly urges protection from criminal or civil penalties for patients who use medical marijuana as permitted under state laws.

“The richness of modern medicine is to carefully evaluate new treatments. Marijuana has been in a special category because of, I suppose, its abuses and other concerns,” Dr. David Dale, the group’s president and a University of Washington professor of medicine, told Reuters in a phone interview.

An uncharacteristically terse David Murray, chief scientist for the White House Office of National Drug Control Policy, could only appeal to science in an interview with Reuters. “The science should be kept open. There should be more research. We should continue to investigate,” he said.

Dale Gieringer, executive director of California NORML had a few nits to pick with the ACP’s statement, but approved overall. “This is an important step,” he said. “But when they say they support the existing federal supply system, it suggests they are unaware of all the systematic blockage of independent research caused by the NIDA monopoly and DEA interference.”

Similarly, said Gieringer, while government licensing and regulation of medical marijuana makes sense, that doesn’t mean we have to maintain the existing NIDA monopoly. “It just doesn’t make sense to do that,” he said.

Where Gieringer was pleasantly surprised was with the ACP’s call to end the criminal persecution of medical marijuana patients, providers, and doctors. “They came out really forcefully against criminalization,” he noted. “That’s very impressive. No one else has been willing to address that. All of these apologists for the government run around saying you can’t have unregulated medical marijuana, but that doesn’t mean you need to throw patients and doctors in jail.”

The medical community’s embrace of medical marijuana has been timid and hesitant, with a number of important organizations, including the American Medical Association, lagging behind. This policy statement by the nation’s second largest medical association should give that process an important boost.


02 2013

Holder: Feds to set pot legalization response ‘relatively soon’
By JOSH GERSTEIN | On the Courts, Transparency and More

2/26/13 11:43 AM EST

The federal government is nearly ready to announce how its law enforcement personnel and prosecutors will respond to the decision Colorado and Washington voters made in November to legalize marijuana use in their states, Attorney General Eric Holder said Tuesday.

“We’re still in the process of reviewing both of the initiatives that were passed,” Holder said at a morning appearance, answering a question from Colorado Attorney General John Suthers. “I would say, and I mean this, that you’ll hear soon.”

“We are, I think, in our last stages of that review, and are trying to make a determination as to what the policy ramifications are going to be, what our international obligations are. There are a whole variety of things that go into this determination,” Holder said. “But the people in [Colorado] and Washington deserve that answer and we will have that, as I said, relatively soon.”

Federal law treats marijuana as a Schedule I controlled substance like Heroin and LSD. However, as pot has been legalized for medicinal use in 18 states in recent years, federal prosecutors have had to confront the awkwardness of prosecuting individuals for actions that are legal under state law. That predicament became even more intense after the passage of broad decriminalization measures in Colorado and Washington state last fall.

During the 2008 campaign, President Barack Obama pledged that he was “not going to be using Justice Department resources to try to circumvent state laws.” However, pro-pot forces and defense lawyers claim some prosecutions have reneged on that promise.

Holder made his pot-related comments during a question-and-answer session of the National Association of Attorneys General in Washington, D.C. His prepared remarks discussed the Obama Administration’s policies to address gun violence and his views on the impact of the automatic federal budget cuts scheduled to hit on Friday.

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02 2013

Drug Laws Ease but Bankers Still Say ‘No’ to Dealers

Matt Villano
FEB 1, 2013

As entrepreneurs go, John Davis is pretty much run of the mill. He strives to keep his customers happy. He wants to grow profit. He pays his taxes.

Perhaps the one remarkable aspect of his Seattle business, the Northwest Patient Resource Center, is what it sells: marijuana.

As a medical distributor of the drug, Davis has been in business legally for several years already. But it’s still hard for an outfit like his to embark on a solid banking relationship.

Even with Washington state’s recent vote to legalize marijuana, it doesn’t appear that navigating the banking system will get any easier for Davis or other purveyors of pot. On the contrary—almost inexplicably, to some—the situation looks to be getting increasingly difficult, with banks essentially vowing now not to lend to anyone in this line of work.

Bankers (or at least the few who would even discuss the matter on the record) say their stance on dealing with dealers is a matter of compliance: although 18 states allow medical marijuana and new laws in Washington and Colorado legalize modest quantities of the drug in general, growing, possessing or using the substance is still a violation of federal law—a code no bank wants to violate.

“Pardon the pun here, but the issue is that banks are worried about their reputations going up in smoke,” quips Rob Rowe, a vice president and senior counsel at the American Bankers Association. “All it takes is one U.S. attorney who decides to enforce federal laws, and they can go after any bank that’s banking these businesses as an accomplice.”

One of the main hurdles for would-be bankers to marijuana businesses is Section 841 of Title 21 of the United States Code. Also known as the Controlled Substances Act, the specifics of this law ramble on for pages. But the statute quite clearly outlaws marijuana at the federal level, and enumerates punishments and penalties—including imprisonment and fines—for those who traffic the substance, and for their accomplices.

This is the law Wells Fargo spokesman Jim Seitz has in mind in explaining the San Francisco-based banking giant’s decision to refrain from doing business with pot dealers even in states that have decriminalized the drug.

“While marijuana legalization initiatives were recently approved in Colorado and Washington, and medical marijuana dispensaries are legal in some states, the sale and use of marijuana is still illegal under federal law,” Seitz says. “Our policy is based on applicable federal laws and our own assessment of our responsibility.”

Engaging in business with marijuana sellers could invoke the wrath of not only the Drug Enforcement Administration, but also the Federal Bureau of Investigation and perhaps even the Department of Homeland Security.

“[The] manufacture and distribution of marijuana is a felony,” says Ronald Friedman, a former federal prosecutor who co-chairs the white collar criminal defense, regulatory compliance and special investigations practice group at Lane Powell, a Seattle law firm.

“Anyone who aids, abets, or facilitates this activity, by loaning money or providing financial services, is open to federal prosecution,” he says.

Because marijuana businesses are considered high-risk for money laundering activity, even banks with rigorous anti-money laundering procedures are steering clear so as to avoid additional scrutiny from regulators.

The freeze-out has left pot peddlers in a precarious position. Operating mainly on a cash-only basis, some argue, creates additional paperwork to comply with state tax boards and makes them a target for theft.

Aaron Smith, executive director of the National Cannabis Industry Association in Washington, D.C., says that at a time when the marijuana industry has hailed recent legalization measures as the first steps toward legitimacy, a de facto boycott on the part of banks has forced the industry in many ways to stay in the shadows.

“You have folks who want to be out of the shadows, and they’re now being encouraged or forced into cash-only businesses,” Smith says. “No other legal industry finds itself in that situation today. None.”

Some marijuana entrepreneurs have skirted the status quo with creative strategies. On Dec. 31, a pot-friendly cafe opened in Del Norte, Colo., selling coffee and drug paraphernalia out of one facility leased as a business property, while distributing free marijuana from another, neighboring facility leased as a residential space.

In Denver, meanwhile, an area attorney has opened a members-only establishment, called Club 64, that doesn’t sell marijuana but invites patrons to bring their own, getting around the one-year wait for establishments that want to be among the state’s first legal pot sellers. (The club is named for the new state measure, Amendment 64, that legalized the possession of marijuana in small amounts for recreational use.)


Some other entrepreneurs are trying to directly bridge the gap in financial services available to cannabis businesses.

Guardian Data Systems, a merchant services firm based in Vancouver, Wash., sells a credit-based technology that’s designed specifically for marijuana sellers. Owner Lance Ott describes the product as “PayPal for the cannabis industry,” and says that entrepreneurs like the tool because it gives them a way to transact business without handling as much cash.

“There aren’t many opportunities to do what we do without running a cash business,” says Ott, who signs off his emails with a “High Regards” and says he has taken marijuana for medicinal purposes. “We wanted to give people the option of operating their businesses in a different way.”

Davis, the Seattle grower, says he devised a strategy to get access to banking services and to trick banks into granting accounts. The approach hinges on revealing as little information as possible.

“When the bank asks you what kind of business you’re going to run, you should say, ‘We’re not sure yet, but we know we’re going to make money,’” says Davis, who teaches classes on how to run a cannabis business. “It’s not lying, but it’s not entirely telling the truth, either.”

Davis also suggests that any operation doing business as a pot seller should be set up under a holding company with a name that doesn’t refer to reefer at all.”Banks don’t require that you tell them what the DBA is, so if your parent company is something like, ‘World Corp.,’ you should be safe,” Davis says. “If you go in there with words like ‘cannabis’ or ‘marijuana’ in your business title, the bank is going to dismiss you right away.”

But Davis’ students may want to consider the potential flaws in this strategy.

For starters, even the most rudimentary Know Your Customer policies should allow banks to sniff out half-truths and outright bogus information that a would-be client supplies about its basic operations.

Davis says he understands that if banks were to find out the true nature of these businesses, they could close the accounts immediately. Experts say banks potentially could do much worse-blacklisting certain business owners, filing Suspicious Activity Reports with the Financial Crimes Enforcement Network or pressing fraud charges. After all, banks themselves are at risk of running afoul of regulators if they allow themselves to get duped by a customer.

But at this point in drug-legalization history, Davis sees few alternatives for marijuana sellers who want access to financial services.”Right now, there’s just no way to do this if you’re up front,” he says. “Until the feds do something, until banks follow suit, we’re stuck.”

Davis and other marijuana entrepreneurs could be waiting a while for resolution to the issue. Though the Obama administration says it will not bring federal charges against sellers complying with laws in their own states, the Treasury Department has not yet clarified guidelines for banks as to what they legally can do for businesses in this sector. (Treasury officials declined to comment for this story.)

In November, a Colorado congresswoman introduced new federal legislation that would allow states to pass their own laws on controlled substances. But the bill has been stuck in committee since then, and there have been no indications from the federal government that changes to the Controlled Substances Act are imminent.

So the growing acceptance of marijuana as a legal substance, at least in some states, continues to complicate the compliance picture for businesses attempting to stay on the right side of state and federal laws.

Without some sort of clarification, the ABA’s Rowe says, banks will continue to eschew would-be customers in the marijuana business.

And for marijuana sellers seeking a greater sense of legitimacy, and perhaps also for banks eager to find new sources of growth, that’s just a drag.


Matt Villano is a freelancer. He is based in Healdsburg, Calif.


02 2013

APNewsBreak: Effort building to change US pot laws

Medical Marijuana Washington

FILE – In this Nov. 7, 2012 file photo, Jake Dimmock, co-owner of the Northwest Patient Resource Center medical marijuana dispensary, works with flowering plants in a grow room in Seattle. Congressional lawmakers from both parties are working to change U.S. marijuana laws, including altering tax codes to let marijuana dispensaries deduct business expenses on federal taxes, and changing banking laws to make it easier for marijuana-related businesses to get bank accounts. (AP Photo/Ted S. Warren, File)

— Feb. 4 4:26 PM EST

Home » United States Congress » APNewsBreak: Effort building to change US pot laws

SEATTLE (AP) — An effort is building in Congress to change U.S. marijuana laws, including moves to legalize the industrial production of hemp and establish a hefty federal pot tax.

While passage this year could be a longshot, lawmakers from both parties have been quietly working on several bills, the first of which Democratic Reps. Earl Blumenauer of Oregon and Jared Polis of Colorado plan to introduce Tuesday, Blumenauer told The Associated Press.

Polis’ measure would regulate marijuana the way the federal government handles alcohol: In states that legalize pot, growers would have to obtain a federal permit. Oversight of marijuana would be removed from the Drug Enforcement Administration and given to the newly renamed Bureau of Alcohol, Tobacco, Marijuana and Firearms, and it would remain illegal to bring marijuana from a state where it’s legal to one where it isn’t.

The bill is based on a legalization measure previously pushed by former Reps. Barney Frank of Massachusetts and Ron Paul of Texas.

Blumenauer’s bill would create a federal marijuana excise tax of 50 percent on the “first sale” of marijuana — typically, from a grower to a processor or retailer. It also would tax pot producers or importers $1,000 annually and other marijuana businesses $500.

His office said Monday it doesn’t yet have an estimate of how much the taxes might bring in. But a policy paper Blumenauer and Polis are releasing this week suggests, based on admittedly vague estimates, that a federal tax of $50 per ounce could raise $20 billion a year. They call for directing the money to law enforcement, substance abuse treatment and the national debt.

Last fall’s votes in Colorado and Washington state to legalize recreational marijuana should push Congress to end the 75-year federal pot prohibition, Blumenauer said.

Washington state officials have estimated that its legal marijuana market could bring in about half a billion dollars a year in state taxes.

“You folks in Washington and my friends in Colorado really upset the apple cart,” Blumenauer said. “We’re still arresting two-thirds of a million people for use of a substance that a majority feel should be legal. … It’s past time for us to step in and try to sort this stuff out.”

Advocates who are working with the lawmakers acknowledge it could take years for any changes to get through Congress, but they’re encouraged by recent developments. Senate Minority Leader Mitch McConnell last week came out in support of efforts to legalize hemp in his home state of Kentucky, and U.S. Rep. Dana Rohrabacher, R-Calif., is expected to introduce legislation allowing states to set their own policy on marijuana.

Senate Judiciary Chairman Patrick Leahy, D-Vt., has indicated he plans to hold a hearing on the conflict between state and federal marijuana laws and has urged an end to federal “mandatory minimum” sentences that lead to long prison stints for drug crimes.

“We’re seeing enormous political momentum to undo the drug war failings of the past 40 years,” said Bill Piper, director of national affairs for the Drug Policy Alliance, who has been working with lawmakers on marijuana-related bills. “For the first time, the wind is behind our back.”

The Justice Department hasn’t said how it plans to respond to the votes in Washington and Colorado. It could sue to block the states from issuing licenses to marijuana growers, processors and retail stores, on the grounds that doing so would conflict with federal drug law.

Blumenauer and Polis’ paper urges a number of changes, including altering tax codes to let marijuana dispensaries deduct business expenses on federal taxes, and making it easier for marijuana-related businesses to get bank accounts. Many operate on a cash basis because federally insured banks won’t work with them, they noted.

Blumenauer said he expects to introduce the tax-code legislation as well as a bill that would reschedule marijuana under the Controlled Substances Act, allowing states to enact medical marijuana laws without fear that federal authorities will continue raiding dispensaries or prosecuting providers. It makes no sense that marijuana is a Schedule I drug, in the same category as heroin and a more restrictive category than cocaine, Blumenauer said.

The measures have little chance of passing, said Kevin Sabet, a former White House drug policy adviser. Sabet recently joined former Rhode Island Rep. Patrick Kennedy and former President George W. Bush speechwriter David Frum in forming a group called Project SAM — for “smart approaches to marijuana” — to counter the growing legalization movement. Sabet noted that previous federal legalization measures have always failed.

“These are really extreme solutions to the marijuana problem we have in this country,” Sabet said. “The marijuana problem we have is a problem of addiction among kids, and stigma of people who have a criminal record for marijuana crimes.

“There are a lot more people in Congress who think that marijuana should be illegal but treated as a public health problem, than think it should be legal.”

Project SAM suggests people shouldn’t get criminal records for small-time marijuana offenses, but instead could face probation or treatment.


Johnson can be reached at


02 2013