After 15 years in the Virginia State legislature, Senator Jennifer McClellan is ready to run for Governor. If elected, McClellan would become the first Black woman to be elected to the position.
McClellan brings 11 years of House of Delegates experience as representative for the 71st district, serving a region most composed of Richmond from 2006 to 2017. For the past four years, she’s represented the 9th district as a Senate member, serving the Richmond area once again.
Along the way, she’s realized that the state level is where legislative action happens—especially as of late in Virginia.
The senator said that the past two years brought about a wave of change previously not discussed in the Senate. The shift in policy is likely due, in part, to Democrats gaining control of the state legislature in 2019.
In March 2021, the state made headlines becoming the first state in the South to abolish the death penalty. Less than two weeks later saw the passage of Virginia’s adult-use cannabis laws, making it the 16th state to pass legislation.
“We’ve made generational progress on a number of issues, including cannabis, in less than two years,” said McClellan, who said the people let their voices be heard on the issues. The senator said a combination of social justice reform and economic market motivations were central to getting cannabis legislation passed.
The state plans to bring legalization about incrementally over the next four years or sooner. Simple possession and home cultivation become legal on July 1. Sales on the regulated open market expect to take effect in 2024. The bill also comes with a re-enactment clause due next year. McClellan said she is spending this year examining how states like New Jersey and New York come online with their regulations so Virginia can strengthen its bill.
Adequate Social Equity Implementation Is A Must
A central motivation for Jennifer McClellan has been the hope to end the fight to stop inequality in America—a battle previous generations of her family and other Black people have fought for as well.
The senator stated that the Commonwealth and the country have “had racial inequity baked into every system.” McClellan added, “That’s something that my parents, my grandparents, my great grandparents saw every day of their lives, and I’ve been fighting my entire adult life, and I’m tired of it.” She now hopes to ensure that fight doesn’t have to be picked up by her children and others in the next generation of Black America.
McClellan emphasized the importance of not only fighting the fights but winning them. Such victories come in the form of equal access to education. The senator stated that a lack of quality education puts children on the pipeline to prison, affecting Black and marginalized communities in America.
A 2016 U.S. A Department of Justice study of prisoners and their schooling revealed that approximately 65% of inmates hadn’t received a high school diploma. Dropout rates hovered slightly above 40%. Only 23% had graduated high school. According to Pew Research Center, despite imprisonment rates dropping by a third for Black men since 2006, they remain the most likely to be imprisoned. By 2018, Black men were imprisoned nearly twice as much as Hispanic men and five times more than white men.
With the bill passed, she now sees the adequate implementation of regulations as a primary focus. Jennifer McClellan is calling for a deliberate focus on social equity components in the bill’s rollout. She considers social equity essential in helping address disproportionate harm done to brown and Black communities through cannabis prohibition.
If legislators fail to factor social equity, then “you’re just carrying forward that inequity in this new legal market,” explained McClellan.
To ensure proper implementation is achieved, Virginia passed resolution SJ 67, which calls for the state Joint Legislative and Review Commission to study the framework of legalization. The commission is tasked with recommending how the state should regulate its program across the supply chain. In November, a study of key market considerations was released, touching on licensing, municipal opt-outs and social equity initiatives.
Senator Jennifer McClellan with Vice President Kamala Harris; Image via Senator Jennifer McClellan’s InstagramJennifer McClellan Gaining Support Through The Ground Game
Jennifer McClellan now has her eyes set on the open Governor position, with the election held later this year. The drive for the governorship comes, in part, from the same force that compelled her into public office in the first place. Her Depression-era parents grew up under Jim Crow laws, with McClellan calling the period tyranny. The injustices they faced and the ongoing fights for equality are joined by what she considers the government’s lack of helping people.
“The depression was the last time we saw the full force of government focusing on helping people, solving their problems and getting them back on their feet in a terrible crisis,” McClellan stated. She added that not everyone felt included in the effort. “It was also a time my parents felt like it wasn’t for everybody.”
Those experiences led her to use the governorship as an opportunity to create further good by solving the problems of Virginians and uniting the public. She believes her goal can be achieved by making a government that is for all its people. Meeting with Virginians across the state showed McClellan that citizens seem to be most concerned about who will address their problems, “because their problems are worse than they have been in a very long time,” she said.
A 2020 Hampton University and Associated Press-NORC Center for Public Affairs Research phone poll of Virginians found that 56% of respondents saw the state headed in the right direction, with 66% thinking the same of their community. However, only 28% saw the same for the country, with 70% believing it is headed in the wrong path.
The COVID-19 pandemic was the final deciding factor for McClellan to run. “We’re at the same critical crossroads right now as this country was in 1968,” she stated, noting that a rebuild of the economy, healthcare and education systems are all on tap. She said the state faces an opportunity to either go back to where it started on inequality or meet the concerns and move forward in a stronger, recovered fashion.
Jennifer McClellan faces an uphill to winning her party’s nomination, with a pool of Democratic contenders vying. In December, McClellan’s camp released poll numbers showing a majority 38% of voters undecided. Former Gov. Terry McAuliffe led actual candidates at 32%, with McClellan at 8% behind Lt. Gov. Justin Fairfax (16%) but ahead of Delegate Jennifer Carroll Foy (5%).
The numbers haven’t deterred confidence so far, with McClellan crediting her ground strategy and team as it shifted to smaller crowds and social distanced meetings with constituents. In late April, McClellan’s campaign received an additional boost as prominent California political backers Susan Sandler and Steve Phillips asked their donor network to support her bid for Governor.
Rhode Island Rakes In $1.6 Million in First Week of Recreational Pot Sales
Rhode Island’s new adult-use cannabis market opened for business earlier this month, and so far, business is good.
Local news station WPRI, citing the state’s Department of Business Regulation, reported this week that “Rhode Island’s six marijuana dispensaries — five of which are currently authorized to sell to recreational customers — collectively sold just over $1.63 million worth of marijuana from Dec. 1 to Dec. 7.”
“Less than half of those sales were for recreational marijuana, at about $786,000. The rest, about $845,400, were sales to medical marijuana patients,” the station reported. “For comparison, during the last week of October — the most recent full week available prior to recreational sales — the dispensaries collectively sold $1 million worth of medical marijuana.”
Rhode Island legalized recreational cannabis use in May, when Gov. Dan McKee signed a bill that was passed by lawmakers in the state General Assembly.
The law made it legal for adults aged 21 and older to cultivate and possess marijuana, while also establishing the regulatory framework for cannabis sales.
“This bill successfully incorporates our priorities of making sure cannabis legalization is equitable, controlled, and safe,” McKee, a Democrat, said in a statement at the time. “In addition, it creates a process for the automatic expungement of past cannabis convictions. My Administration’s original legalization plan also included such a provision and I am thrilled that the Assembly recognized the importance of this particular issue. The end result is a win for our state both socially and economically.”
Additionally, the law “will give courts until July 1, 2024, to automatically expunge past convictions, and those who want their expungement sooner may request it,” the governor’s office explained in a press release at the time.
Late last month, McKee and the state’s Department of Business Regulation’s Office of Cannabis Regulation announced that “five licensed medical marijuana compassion centers have received state approval to begin selling adult use marijuana on or after December 1.”
The five “compassion centers” that were given approval to begin adult-use sales are: Aura of Rhode Island (Central Falls); Thomas C. Slater Center (Providence); Mother Earth Wellness (Pawtucket); Greenleaf Compassionate Care Center (Portsmouth); and RISE Warwick (Warwick).
“This milestone is the result of a carefully executed process to ensure that our state’s entry into this emerging market was done in a safe, controlled and equitable manner,” McKee said last month. “It is also a win for our statewide economy and our strong, locally based cannabis supply chain, which consists of nearly 70 licensed cultivators, processors and manufacturers in addition to our licensed compassion centers. Finally, I thank the leadership of the General Assembly for passing this practical implementation framework in the Rhode Island Cannabis Act and I look forward to continuing our work together on this issue.”
Matt Santacroce, who is serving as interim deputy director of the Rhode Island Department of Business Regulation, said last month that the state was “pleased with the quality and comprehensiveness of the applications we received from the state’s compassion centers, and we are proud to launch adult use sales in Rhode Island just six months after the Cannabis Act was signed into law, marking the Northeast’s fastest implementation period.”
“We look forward to continuing to work with the state’s cannabis business community to ensure this critical economic sector scales in compliance with the rules and regulations put forward by state regulators,” Santacroce said.
The launch of recreational sales on December 1 was only one change to Rhode Island’s existing marijuana policy to arrive this month.
WPRI reported that, on the same day, “the state also stopped charging medical patients to obtain or renew their medical marijuana cards,” adding that “there is an expected revenue loss from the pending plan to expunge marijuana possession charges, which will eliminate court fees from those crimes.”
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D.C. Council Approves Cannabis Bill To Promote Equity, Provide Tax Relief And Eliminate Medical Marijuana License Caps
On Tuesday, lawmakers in Washington, D.C., approved a bill that would significantly alter the city’s medical marijuana program. The bill would, among other things, remove licensing caps on cannabis businesses, reduce taxes for operators, increase efforts to promote social equity, and establish new categories of regulated businesses, such as on-site consumption facilities and cannabis cooking classes.
Additionally, it would allow current “gifting” operators, who sell non-cannabis items in exchange for “free” marijuana products, to transition into the permitted market while granting authorities the ability to crack down on those who continue to operate unlawfully.
The measure, which had been revised by the Committee of the Whole earlier in the day, was passed by the full D.C. Council by a vote of 7 to 4.
A second reading vote by the Council is still required before it can be sent to the mayor’s office.
Pro-reform lawmakers have voiced concerns that the bill’s most recent iteration may have unintended consequences for social fairness by granting preferential treatment to already established medical cannabis outlets.
Legally, adults would be able to selfcertify their medical marijuana use according to the Medical Cannabis Amendment Act.
Council Chairman Phil Mendelson (D) introduced the legislation on behalf of Mayor Muriel Bowser (D).
A note prepared for the hearing by the Committee of the Whole states that the most recent print “retains a majority of the adjustments and additions made by” the Committee on Business and Economic Development (CBED), which passed the measure last week.
It had progressed out of a different panel before.
Dispensaries’ Cashless ATM Transactions Get The Ax
Cannabis dispensaries in several states were left scrambling to find ways to process transactions without cash when a popular workaround to federal banking regulations known as cashless ATMs stopped working for many retailers beginning last week. Cashless ATMs, also known as “point of banking” systems, allow customers to use bank cards instead of cash at cannabis dispensaries, giving retailers and their patrons alike more flexibility when processing transactions for marijuana purchases.
But beginning last week, some of the biggest ATM transaction processors including NCR Corp.’s Columbus Data Services have shut down the ability of cashless ATM transaction processors to use their service, according to unidentified sources cited by Bloomberg. NCR declined to comment on the situation, according to the report.
“This is a pivotal point in cannabis banking,” Ryan Hamlin, chief executive officer of payment technology provider Posabit Systems Corp., told Bloomberg about the cashless ATM shutdowns.
Notice Given Last Year
Late last year, international payment processing giant Visa announced in a memo to retailers that it “was aware of a scheme where POS devices marketed as ‘Cashless ATMs’ are being deployed at merchant outlets.”
The system worked by rounding up purchases, often to multiples of $20, to make the transaction appear to be cash disbursements. Instead, only the change from the transaction would be returned to the customer, and the dispensary would keep the rest to cover the payment for the purchase.
“Cashless ATMs are POS devices driven by payment applications that mimic standalone ATMs. However, no cash disbursements are made to cardholders,” the December 2021 memo continues. “Instead, the devices are used for purchase transactions, which are miscoded as ATM cash disbursements. Purchase amounts are often rounded up to create the appearance of a cash disbursement.
In April, Bloomberg reported that cashless ATM transactions were able to be processed because they were disguised by listing an address of a nearby business such as a fast food restaurant instead of the actual dispensary address. An estimate put the portion of cannabis sales processed through cashless ATM transactions at 25% of the $25 billion in projected annual dispensary sales.
“Those sales could generate more than $500 million in fees for payment processors, based on average purchase sizes,” Bloomberg reported.
Banking Laws Hinder Legitimate Cannabis Businesses
The popularity of cashless ATM transactions is indicative of the difficulty federal regulations pose for cannabis businesses, even those operating legally under state law. Federal banking and money laundering laws put restrictions on the banking industry, making it difficult for financial institutions to provide traditional services such as credit card processing, loans, and deposit and payroll accounts. But cashless ATMs fail to pass muster with the federal regulations.
“The cashless ATM trend is damaging to investors, dispensaries, and consumers, as when it comes down to it, it’s blatant money laundering,” CannaTrac CEO Tom Gavin told High Times. “Instead of creating loopholes and using a cashless ATM, dispensaries should take advantage of other solutions currently on the market that are safe, legal, and transparent. A proper financial solution should be registered with FinCEN and have a money transmitter license, or be the agent of a sponsor or bank with a money transmitter license in their state.”
Hamlin of Posabit said that signs of the cashless ATM shutdown began to appear in November and increased last week. He estimated that by the end of the weekend, only about 20% of the cannabis industry was still able to use cashless ATM payments.
Cannabis dispensaries in Arizona, California, and Massachusetts have reportedly been affected by the shutdown of cashless ATM transactions, with employees at those shops recommending that they pay for their purchases with cash instead. Curaleaf Holdings, one of the largest cannabis retailers in the United States, reported in April that approximately one-third of the company’s dispensary transactions were processed through cashless ATMs.
“It’s left merchants in the lurch because it happened overnight, but the writing has been on the wall for a while now,” said Peter Su, a senior vice president at Green Check Verified, a consulting and software company that specializes in cannabis and banking.
Sahar Ayinehsazian, a partner at Vicente Sederberg LLP and co-chair of the law firm’s Banking and Financial Services Access Group, said that the shutdown of the cashless ATM system illustrates the need for the passage of legislation now pending before Congress that would allow legal cannabis businesses access to banking services.
“This shutdown further underscores the ongoing need for banking and financial reform for cannabis businesses and the passage of the SAFE Act,” Ayinehsazian wrote in an email to High Times. “While there can be no guarantee that the Act will open up payment processing for cannabis operators, the industry is very optimistic that its passage will facilitate access to legal and legitimate cashless payment options for cannabis operators.”
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