Secure and Fair Enforcement Banking Act of 2019

Floor Speech

Mr. Speaker, I rise in opposition to H.R. 1595.

Before I go into the contents of my argument against this legislation, I want to start by commending the bill's sponsor, Mr. Perlmutter from Colorado, for his tireless advocacy, his reasonableness in his approach, and his willingness, even in the midst of the toughest negotiations around the subject matter, to keep his cool, to think through the import of the bill, and to seek compromise where he could.

It is quite a legislative endeavor that he has taken upon for himself, for this institution, for his State, and for States around the country. He has been a fantastic advocate.

And I would say that, standing in opposition to this bill, it is not because of his lack of good will. It is not for lack of his willingness to engage, but for a fundamental disagreement in the approach. We have been able to have real discussions around this that I think would make the American people more proud or more confident in this institution and our body politic, more broadly speaking.

I also want to thank my friend and colleague on the committee, Mr. Stivers from Ohio, for his work on the issue. Together, they have conducted themselves with wonderful integrity and respect for their colleagues and their colleagues' views and ideas, especially on an issue like this where it can create an enormous amount of controversy.

Twenty-one States have legalized medicinal marijuana, and 10 States have legalized the recreational use of the drug. However, cannabis remains completely illegal in 19 States. Federal law defines this as a drug that has ``a high potential for abuse; no currently accepted medical use in treatment in the United States; and a lack of accepted safety for use of the drug . . . under medical supervision.'' That is the current Federal law.

This bill does not change the fact that cannabis remains a prohibited schedule I substance under the Controlled Substances Act.

To that end, if we seek to give financial institutions certainty, we should deal with the listing of cannabis as a schedule I substance, not debating a partial solution for financial institutions to what is a much larger problem and a larger societal issue that we must wrestle with.

Should States be allowed to continue to violate Federal law? Does Federal law need to be changed when it comes to the scheduling of cannabis?

We have an FDA that regulates cigarettes and e-cigarettes, which, as we know, there is the recent announcement that they will seek a ban on flavored e-cigarettes. But the FDA has no regulatory authority to regulate cannabis.

The bill we are considering today is one of the biggest changes to U.S. drug policy in my lifetime, yet it was done with little debate. While our committee has jurisdiction over financial institutions--in the nature of our debate, it is usually about the nature of regulation for the capital markets and for banks--we heard little from the committees of jurisdiction over the Controlled Substances Act or the Criminal Code. In fact, the Financial Services Committee is the only one that has held a hearing on the issue of cannabis this Congress.

Now, I would say that is due to the leadership of Mr. Perlmutter and his tireless advocacy for this, but we only had one panel of witnesses. I voiced my concerns in our jurisdiction to Chairwoman Waters and to Congressman Perlmutter about my concerns for this.

In March of this year, I wrote Chairwoman Waters to express my belief that we need to have a better comprehension of the nature of this substance and address the supervisory and regulatory issues that would result from enactment of H.R. 1595. I include in the Record a copy of that letter. House of Representatives, Committee on Financial Services, Washington, DC, March 21, 2019. The Hon. Maxine Waters, Chairwoman, Committee on Financial Services, Washington, DC. The Hon. Gregory W. Meeks, Chairman, Subcommittee on Consumer Protection and Financial Institutions, Washington DC.

Dear Chairwoman Waters and Chairman Meeks: We write today to seek your agreement to delay consideration of H.R. 1595, the SAFE Act, currently scheduled to be marked up on March 26, 2019, until the Committee has a better understanding of the full range of consequences that enacting such legislation may trigger. As you know, marijuana is a schedule I controlled substance as defined in 21 U.S.C. 802. The impact that many state laws, which have legalized marijuana, have on the federal laws governing the manufacturing, use, and sale of marijuana, including proceeds, raise many questions and concerns. Any change to these statutes, or those that impact them, has the potential to divide the Congress and the country. We must ensure that Congress has done its due diligence, including conducting thorough oversight and review, before moving such legislation.

The hearing at the Committee on Financial Services on February 13, 2019, made clear that we need to better comprehend and address the supervisory and regulatory issues that would result from enactment of H.R. 1595. Many outstanding questions remain, which include but are not limited to the following:

1. What changes to our banking laws are necessary to implement the SAFE Banking Act or other legislation creating a safe harbor for cannabis-related businesses?

2. How would individual agencies enforce Bank Secrecy Act (BSA) requirements following enactment of the SAFE Banking Act? What changes would be required of BSA requirements?

3. How would individual agencies enforce anti-money laundering (AML) regulations following enactment of the SAFE Banking Act? Would AML reforms be necessary?

4. How would individual agencies enforce Know Your Customer (KYC) rules following enactment of the SAFE Banking Act? What changes would be required of KYC rules?

5. How would individual agencies enforce Suspicious Activity Report (SAR) filing requirements and guidelines following passage of the SAFE Banking Act? What changes would be required of SAR filing requirements and guidelines to ensure illicit financial activities were not being financed?

6. How would individual agencies enforce Currency Transaction Report (CTR) filing requirements and guidelines following enactment of the SAFE Banking Act? What changes would be required of CTR filing requirements and guidelines?

7. In what ways are agencies working with state counterparts, including state banking and securities supervisors, under the existing regime? How would those cooperative relationships change with enactment of H.R. 1595?

8. Would H.R. 1595 require conforming changes to any of the statues, rules, and requirements previously listed to ensure there are no unintended consequences, such as cartels and other bad actors gaining access to our financial system?

9. Would the safe harbor require any changes to the rules or processes governing federal deposit insurance systems?

10. What are the implications of H.R. 1595 on nonbank financial firms, including insurers and investment companies?

11. What are the implications of H.R 1595 on third parties, including payment processors?

12. What are the implications of H.R. 1595 on individual and institutional investors of cannabis-related businesses?

13. What are the implications of RR.1595 on federal, state, and local law enforcement, including the Department of Justice and the Drug Enforcement Agency?

14. How are proceeds from state licensed growers and distributers taxed under federal law? Relatedly, what conforming changes to our tax code are necessary?

15. What are the implications of H.R. 1595 on other products and services offered by financial institutions, including but not limited to mortgage products, deposit advance products or general commercial lending?

As Members of Congress, and the Committee of primary jurisdiction, we owe it to our constituents and to the public to fully understand the implications of any legislation before supporting or opposing it. We urge you to hold H.R. 1595 and any related legislation until we have a full understanding of the consequences of this bill. Sincerely, Patrick McHenry,

Ranking Member. Blaine Luetkemeyer,

Ranking Member.

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Mr. McHENRY. Mr. Speaker, in that letter, I listed a number of questions that have yet to be answered, including:

What steps will Federal financial regulators have to take to harmonize standards and protect against illicit activity, including institutions' obligations with respect to the Bank Secrecy Act, anti- money laundering requirements, suspicious activity reports, and currency transaction reports?

What are the implications of this bill on nonbank financial firms, including investment companies?

I know there have been additions, since we have come to the floor, to include insurance companies, and I think that is a positive step. But these are some of the basic questions that still need to be resolved.

It is also important that we understand whether this legislation could lead to bad actors, like drug cartels, that could more easily access our banking system in the United States. These concerns have been echoed by several former Directors of the Office of National Drug Control Policy and former Administrators of the Drug Enforcement Administration.

In a July letter from this year, former law enforcement officials serving from 1981 to 2014 have voiced concerns that the SAFE Banking Act could be exploited to provide easier, more cost-effective ways for nefarious groups to launder money. I include in the Record a copy of that letter. Hon. Mike Crapo, Chairman, U.S. Senate Committee on Banking, Housing, & Urban Affairs, Washington, DC. Hon. Sherrod Brown, Ranking Member, U.S. Senate Committee on Banking, Housing, & Urban Affairs, Washington, DC.

Dear Chairman Crapo and Ranking Member Brown: We write as former Directors of the Office of National Drug Control Policy and former Administrators of the Drug Enforcement Administration to warn about the unintended consequences of the SAFE Banking Act to legalize the banking of federally illegal proceeds from the sale of marijuana.

Some Members of your Committee may be familiar with the Black Market Peso Exchange that has been in operation for several decades. This scheme has enabled international drug cartels to launder billions of U.S. dollars through international monetary exchanges and has ensnared many banks and mainstream U.S. companies.

The lesson that the Black Market Peso Exchange teaches us is that cartels will go to enormous lengths and use sophisticated and complex methods to move cash into banks- since laundering money is the life-blood of criminal organizations. It is therefore a virtual certainty that cartels will seek to exploit the SAFE Banking act if it provides them with an easier and more cost-effective means to launder their money.

Because cash made from the sale of marijuana looks the same regardless of what it was used to pay for, it will be extremely difficult for banks to know whether large bundles of cash presented for deposit were made from the sale of marijuana rather than from the sale of heroin, fentanyl, or methamphetamine.

In short, the SAFE Banking Act could inadvertently allow cartels to bring into banks duffel bags of cash made from the sale of those illicit drugs that are killing tens of thousands of Americans every year.

Consider the current landscape of offering banking services to cash-intensive marijuana businesses. Even if customers are offered the opportunity to pay in credit, many customers will choose to pay cash to avoid being tracked within, the state seed-to-sale tracking system.

While banks know how much cash to expect from other cash- intensive businesses like dry cleaners or convenience stores, it will be very difficult to figure out when a marijuana dispensary is participating in a money laundering scheme. The scale of the marijuana industry is already such that there are huge opportunities for these dispensaries to be the destination for cartel cash. Indeed, we have already seen many cases of cartels using the cover of legalization to operate illicit marijuana grows and black market activity. Two recent examples within the past year involved organized efforts to expel Mexican drug cartels growing marijuana in Northern California--including a request to use the California National Guard, and the May 2019 bust of the largest international drug trafficking organization in Colorado law enforcement history, with over 80,000 plants in over 250 locations and 4.5 tons of finished marijuana products.

We urge the Senate Banking Committee to reject the SAFE Banking Act and other legislation that would give these cartels more cover and more access to the U.S. financial system. Sincerely, Mr. R. Gil Kerlikowske, Former Director, May 7, 2009 to March 6, 2014, Office of National Drug Control Policy; Mr. John P. Walters, Former Director, December 7, 2001 to January 20, 2009, Office of National Drug Control Policy; General Barry R. McCaffrey, USA (Ret.), Former Director, February 29, 1996 to January 20, 2001, Office of National Drug Control Policy; Mr. Lee P. Brown, Former Director, July 19, 1993 to January 1996, Office of National Drug Control Policy; Mr. Robert Martinez, Former Director, March 28, 1991 to January 20, 1993, Office of National Drug Control Policy; Mr. William J. Bennett, Former Director, March 13, 1989 to December 13, 1990, Office of National Drug Control Policy; Ms. Michele M. Leonhart, Former Administrator, November 10, 2007 to May 14, 2015, Drug Enforcement Administration; Ms. Karen P. Tandy, Former Administrator, July 31, 2003 to November 9, 2007, Drug Enforcement Administration; Mr. John C. Lawn, Former Administrator, July 26, 1985 and March 23, 1990, Drug Enforcement Administration; Mr. Peter B. Bensinger, Former Administrator, February 23, 1976 to July 10, 1981, Drug Enforcement Administration.

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Mr. McHENRY. Mr. Speaker, drug cartels are a significant problem in cannabis-legal States like California, Washington, and Colorado. As reported in a May article by NBC News, the cartels have found that it is easier to grow and process marijuana in legal States like Colorado and ship it throughout the United States than it is to bring it from Mexico or Cuba.

I include in the Record a copy of this article, as well. [From nbcnews.com, May 29, 2018] Foreign Cartels Embrace Home-Grown Marijuana in Pot-Legal States

Foreign gangs are finding that black-market marijuana is profitable even in states that have legalized cannabis (By Dennis Romero, Gabe Gutierrez, Andrew Blankstein and Robert Powell)

Los Angeles.--Attorney General Jeff Sessions called it ``one of the largest residential forfeiture actions in American History.''

In early April, local and federal authorities descended upon 74 marijuana grow houses in the Sacramento area they say were underwritten by Chinese organized crime. They filed court paperwork to seize the properties, worth millions of dollars.

Federal officials allege that legal recreational marijuana states like California, Colorado and Washington, where enforcement of growing regulations is hit-or-miss, have been providing cover for transnational criminal organizations willing to invest big money to buy or rent property to achieve even bigger returns.

Chinese, Cuban and Mexican drug rings have purchased or rented hundreds of homes and use human trafficking to bring inexperienced growers to the United States to tend them, federal and local officials say.

The suspects are targeting states that have already legalized marijuana ``in an attempt to shroud their operations in our legal environment here and then take the marijuana outside of the state,'' said Mike Hartman, executive director of the Colorado Department of Revenue, which regulates and licenses the cannabis industry. Authorities say they've seen an increase in these ``home grows'' since the launch of recreational pot sales in Colorado.

While California and Washington have mainly seen organized criminals from China buying homes and converting them into grow houses, Colorado has largely been grappling with Cuban and Mexican-led cartels, said Sheriff Bill Elder of the El Paso County Sheriff's Office in Colorado.

``They have found that it's easier to grow and process marijuana in Colorado, ship it throughout the United States, than it is to bring it from Mexico or Cuba,'' Elder said.

In El Paso County, NBC News witnessed firsthand the damage a commercial-scale cannabis grow can do to a home otherwise built for an average American family. Growers pose as legitimate renters, and by the time authorities disrupt their operation, homes have been gutted and trashed.

``We've fallen through floors,'' U.S. Drug Enforcement Agency Special Agent Randy Ladd said. ``The electrical damage, they draw so much current that you'll see, in some places, the wires are fused inside of the electrical box. And--a lot of people--they don't wanna pay the high electric bills. So what they do is they take jackhammers and pickaxes and they cut through the foundation of the house, so that they could steal the power.''

One of the biggest busts so far came last June, when the Colorado attorney general's office announced that ``a massive illegal interstate marijuana distribution and cultivation network stretching from Colorado to Texas'' had been dismantled. It was allegedly Chinese-connected, Ladd said.

Authorities said the network was responsible for securities fraud, millions of dollars of laundered cash, 2,600 ``illegally cultivated'' marijuana plants and 4,000 pounds of harvested cannabis, according to the Colorado attorney general's statement.

The operation took place in 18 warehouses and storage units and 33 homes, mostly in the Denver area, authorities said. ``These seizures are believed to only scratch the surface,'' the office said.

Ladd alleged that some Chinese crews cover immigrants' costs of traveling to America in exchange for work in the grow houses. ``It's like indentured servitude,'' he said. ``It is a form of human trafficking.''

The workers often fly from China to Belgium, and from Belgium to Mexico, before making asylum claims at the border and then disappearing by the time they're scheduled to tell their stories in court, Ladd said. Often when grow houses are raided, immigration fugitives are discovered, he said.

The grow homes are usually purchased by shell property management companies, Ladd said. ``These growers can hide in plain sight,'' he said.

The Sacramento-area raids, which also struck Calaveras, Placer, San Joaquin, El Dorado, Yuba and Amador counties, shed some light on how many of the foreign rings operate.

Northern California-based DEA Special Agent Casey Rettig said suspects send cash to the United States in $9,999 increments, just below the mandated reporting threshold, and receive funds from China that fly under that nation's $50,000 foreign spending limit. They then purchase homes with the help of cash lenders instead of traditional mortgage firms.

Last fall, a scenario fitting that pattern unfolded in Grays Harbor County, Washington, southwest of Seattle, as a drug task force busted an alleged cultivation ring funded by organized crime in China.

More than 40 suspects were arrested and $80 million worth of cannabis was seized, the Grays Harbor County Sheriff's Office said. ``The majority of these homes were purchased with cash, and information was developed that these purchases were conducted by Chinese nationals involved in organized crime,'' according to a statement from the Sheriff's Office.

And just this month, search warrants were served at 19 locations in the Puget Sound area of Washington state, a federal official who did not want her name used said. The ring was allegedly run by three Chinese nationals who produced thousands of pounds of cannabis destined for greater New York, the U.S. attorney's office in Seattle alleges.

The suspects, who face drug conspiracy charges, purchased homes with the help of multiple wire transfers from China that included dollar figures--$2,000 to $5,900--they believed would fly under the radar, according to a federal complaint.

Ultimately it was the houses' exorbitant electricity use-- up to 38,477 kilowatt hours in one day versus the American average of just 30--that made them targets of a federal investigation, according to the filing.

Even a single grow house can contain a large marijuana operation. In April, police in Pomona, California, an exurb in Los Angeles County, announced they discovered a 23-room grow house allegedly run by Chinese nationals. Fifty-five- hundred marijuana products, including 2,900 plants and nearly 21 pounds of cannabis, were seized, police said.

``The grow operation used advanced systems of lighting, air conditioning, fans, exhaust blowers and air-filtering systems to control the climate inside the buildings and the odor of marijuana,'' according to a Pomona police statement.

Pomona police spokeswoman Aly Mejia said a gun and $6,900 in cash were also found.

The DEA's Rettig, speaking from her base in San Francisco, said the Chinese operations are ``illegal under state law.'' In California, marijuana growers, producers and retailers need state and local licenses. Cities can opt out and ban such businesses altogether.

Rettig said even with the Golden State's sky-high housing market--the median price of a home is $535,100, according listings site Zillow--overseas criminals know that ``marijuana can fetch three times as much out of state.''

``There's a great profit motive in it,'' the DEA's Ladd said. ``In Colorado, marijuana legalization has magnified the black market. The standard price per pound here is $2,000, but they can get $3,500 to $4,500 by shipping it back East. The profits are great there.''

BREAK IN TRANSCRIPT

Mr. McHENRY. Mr. Speaker, beyond the regulatory issues, Congress has yet to examine these potential societal harms and implications for human health.

In a January article regarding research on the health effects of marijuana, author Malcolm Gladwell wrote: ``Before any drug gets permitted to go on the market, basic questions have to be answered about its safety and efficacy. We don't know relatively basic questions about marijuana.''

I include this piece from The New Yorker in the Record. [From the New Yorker, Jan. 7, 2019] Is Marijuana as Safe as We Think? (By Malcolm Gladwell)

A few years ago, the National Academy of Medicine convened a panel of sixteen leading medical experts to analyze the scientific literature on cannabis. The report they prepared, which came out in January of 2017, runs to four hundred and sixty-eight pages. It contains no bombshells or surprises, which perhaps explains why it went largely unnoticed. It simply stated, over and over again, that a drug North Americans have become enthusiastic about remains a mystery.

For example, smoking pot is widely supposed to diminish the nausea associated with chemotherapy. But, the panel pointed out, ``there are no good-quality randomized trials investigating this option.''We have evidence for marijuana as a treatment for pain, but ``very little is known about the efficacy, dose, routes of administration, or side effects of commonly used and commercially available cannabis products in the United States.'' The caveats continue. Is it good for epilepsy? ``Insufficient evidence.''Tourette's syndrome? Limited evidence. A.L.S., Huntington's, and Parkinson's? Insufficient evidence. Irritable-bowel syndrome? Insufficient evidence. Dementia and glaucoma? Probably not. Anxiety? Maybe. Depression? Probably not.

Then come Chapters 5 through 13, the heart of the report, which concern marijuana's potential risks. The haze of uncertainty continues. Does the use of cannabis increase the likelihood of fatal car accidents? Yes. By how much? Unclear. Does it affect motivation and cognition? Hard to say, but probably. Does it affect employment prospects? Probably. Will it impair academic achievement? Limited evidence. This goes on for pages.

We need proper studies, the panel concluded, on the health effects of cannabis on children and teen-agers and pregnant women and breast-feeding mothers and ``older populations'' and ``heavy cannabis users''; in other words, on everyone except the college student who smokes a joint once a month. The panel also called for investigation into ``the pharmacokinetic and pharmacodynamic properties of cannabis, modes of delivery, different concentrations, in various populations, including the dose-response relationships of cannabis and THC or other cannabinoids.''

Figuring out the ``dose-response relationship'' of a new compound is something a pharmaceutical company does from the start of trials in human subjects, as it prepares a new drug application for the E.D.A. Too little of a powerful drug means that it won't work. Too much means that it might do more harm than good. The amount of active ingredient in a pill and the metabolic path that the ingredient takes after it enters your body--these are things that drugmakers will have painstakingly mapped out before the product comes on the market, with a tractor-trailer full of supporting documentation.

With marijuana, apparently, we're still waiting for this information. It's hard to study a substance that until very recently has been almost universally illegal. And the few studies we do have were done mostly in the nineteen-eighties and nineties, when cannabis was not nearly as potent as it is now. Because of recent developments in plant breeding and growing techniques, the typical concentration of THC, the psychoactive ingredient in marijuana, has gone from the low single digits to more than twenty per cent--from a swig of near-beer to a tequila shot.

Are users smoking less, to compensate for the drug's new potency? Or simply getting more stoned, more quickly? Is high-potency cannabis more of a problem for younger users or for older ones? For some drugs, the dose-response curve is linear: twice the dose creates twice the effect. For other drugs, it's nonlinear: twice the dose can increase the effect tenfold, or hardly at all. Which is true for cannabis? It also matters, of course, how cannabis is consumed. It can be smoked, vaped, eaten, or applied to the skin. How are absorption patterns affected?

Last May, not long before Canada legalized the recreational use of marijuana, Beau Kilmer, a drug-policy expert with the RAND Corporation, testified before the Canadian Parliament. He warned that the fastest-growing segment of the legal market in Washington State was extracts for inhalation, and that the mean THC concentration for those products was more than sixty-five per cent. ``We know little about the health consequences-risks and benefits-of many of the cannabis products likely to be sold in nonmedical markets,'' he said. Nor did we know how higher-potency products would affect THC consumption.

When it comes to cannabis, the best-case scenario is that we will muddle through, learning more about its true effects as we go along and adapting as needed-the way, say, the once extraordinarily lethal innovation of the automobile has been gradually tamed in the course of its history. For those curious about the worst-case scenario, Alex Berenson has written a short manifesto, ``Tell Your Children: The Truth About Marijuana, Mental Illness, and Violence.''

Berenson begins his book with an account of a conversation he had with his wife, a psychiatrist who specializes in treating mentally ill criminals. They were discussing one of the many grim cases that cross her desk--``the usual horror story, somebody who'd cut up his grandmother or set fire to his apartment.'' Then his wife said something like ``Of course, he was high, been smoking pot his whole life.''

Of course? I said.

Yeah, they all smoke.

Well . . . other things too, right?

Berenson used to be an investigative reporter for the Times, where he covered, among other things, health care and the pharmaceutical industry. Then he left the paper to write a popular series of thrillers. At the time of his conversation with his wife, he had the typical layman's view of cannabis, which is that it is largely benign. His wife's remark alarmed him, and he set out to educate himself. Berenson is constrained by the same problem the National Academy of Medicine faced--that, when it comes to marijuana, we really don't know very much. But he has a reporter's tenacity, a novelist's imagination, and an outsider's knack for asking intemperate questions. The result is disturbing.

The first of Berenson's questions concerns what has long been the most worrisome point about cannabis: its association with mental illness. Many people with serious psychiatric illness smoke lots of pot. The marijuana lobby typically responds to this fact by saying that pot-smoking is a response to mental illness, not the cause of it--that people with psychiatric issues use marijuana to self-medicate. That is only partly true. In some cases, heavy cannabis use does seem to cause mental illness. As the National Academy panel declared, in one of its few unequivocal conclusions, ``Cannabis use is likely to increase the risk of developing schizophrenia and other psychoses; the higher the use, the greater the risk.''

Berenson thinks that we are far too sanguine about this link. He wonders how large the risk is, and what might be behind it. In one of the most fascinating sections of ``Tell Your Children,'' he sits down with Erik Messamore, a psychiatrist who specializes in neuropharmacology and in the treatment of schizophrenia. Messamore reports that, following the recent rise in marijuana use in the U.S. (it has almost doubled in the past two decades, not necessarily as the result of legal reforms), he has begun to see a new kind of patient: older, and not from the marginalized communities that his patients usually come from. These are otherwise stable middle-class professionals. Berenson writes, ``A surprising number of them seemed to have used only cannabis and no other drugs before their breaks. The disease they'd developed looked like schizophrenia, but it had developed later-and their prognosis seemed to be worse. Their delusions and paranoia hardly responded to antipsychotics.''

Messamore theorizes that THC may interfere with the brain's anti-inflammatory mechanisms, resulting in damage to nerve cells and blood vessels. Is this the reason, Berenson wonders, for the rising incidence of schizophrenia in the developed world, where cannabis use has also increased? In the northern parts of Finland, incidence of the disease has nearly doubled since 1993. In Denmark, cases have risen twenty-five per cent since 2000. In the United States, hospital emergency rooms have seen a fifty per-cent increase in schizophrenia admissions since 2006. If you include cases where schizophrenia was a secondary diagnosis, annual admissions in the past decade have increased from 1.26 million to 2.1 million.

Berenson's second question derives from the first. The delusions and paranoia that often accompany psychoses can sometimes trigger violent behavior. If cannabis is implicated in a rise in psychoses, should we expect the increased use of marijuana to be accompanied by a rise in violent crime, as Berenson's wife suggested? Once again, there is no definitive answer, so Berenson has collected bits and pieces of evidence. For example, in a 2013 paper in the Journal of Interpersonal Violence, researchers looked at the results of a survey of more than twelve thousand American high-school students. The authors assumed that alcohol use among students would be a predictor of violent behavior, and that marijuana use would predict the opposite. In fact, those who used only marijuana were three times more likely to be physically aggressive than abstainers were; those who used only alcohol were 2.7 times more likely to be aggressive.

Observational studies like these don't establish causation. But they invite the sort of research that could.

Berenson looks, too, at the early results from the state of Washington, which, in 2014, became the first U.S. jurisdiction to legalize recreational marijuana. Between 2013 and 2017, the state's aggravated-assault rate rose seventeen per cent, which was nearly twice the increase seen nationwide, and the murder rate rose forty-four per cent, which was more than twice the increase nationwide. We don't know that an increase in cannabis use was responsible for that surge in violence. Berenson, though, finds it strange that, at a time when Washington may have exposed its population to higher levels of what is widely assumed to be a calming substance, its citizens began turning on one another with increased aggression.

His third question is whether cannabis serves as a gateway drug. There are two possibilities. The first is that marijuana activates certain behavioral and neurological pathways that ease the onset of more serious addictions. The second possibility is that marijuana offers a safer alternative to other drugs: that if you start smoking pot to deal with chronic pain you never graduate to opioids.

Which is it? This is a very hard question to answer. We're only a decade or so into the widespread recreational use of high-potency marijuana. Maybe cannabis opens the door to other drugs, but only after prolonged use. Or maybe the low- potency marijuana of years past wasn't a gateway, but today's high-potency marijuana is. Methodologically, Berenson points out, the issue is complicated by the fact that the first wave of marijuana legalization took place on the West Coast, while the first serious wave of opioid addiction took place in the middle of the country. So, if all you do is eyeball the numbers, it looks as if opioid overdoses are lowest in cannabis states and highest in non-cannabis states.

Not surprisingly, the data we have are messy. Berenson, in his role as devil's advocate, emphasizes the research that sees cannabis as opening the door to opioid use. For example, two studies of identical twins--in the Netherlands and in Australia--show that, in cases where one twin used cannabis before the age of seventeen and the other didn't, the cannabis user was several times more likely to develop an addiction to opioids. Berenson also enlists a statistician at N.Y.U. to help him sort through state-level overdose data, and what he finds is not encouraging: ``States where more people used cannabis tended to have more overdoses.''

The National Academy panel is more judicious. Its conclusion is that we simply don't know enough, because there haven't been any ``systematic'' studies. But the panel's uncertainty is scarcely more reassuring than Berenson's alarmism. Seventy-two thousand Americans died in 2017 of drug overdoses. Should you embark on a procannabis crusade without knowing whether it will add to or subtract from that number?

Drug policy is always clearest at the fringes. Illegal opioids are at one end. They are dangerous. Manufacturers and distributors belong in prison, and users belong in drug- treatment programs. The cannabis industry would have us believe that its product, like coffee, belongs at the other end of the continuum. ``Flow Kana partners with independent multi-generational farmers who cultivate under full sun, sustainably, and in small batches,'' the promotional literature for one California cannabis brand reads. ``Using only organic methods, these stewards of the land have spent their lives balancing a unique and harmonious relationship between the farm, the genetics and the terroir.'' But cannabis is not coffee. It's somewhere in the middle. The experience of most users is relatively benign and predictable; the experience of a few, at the margins, is not. Products or behaviors that have that kind of muddled risk profile are confusing, because it is very difficult for those in the benign middle to appreciate the experiences of those at the statistical tails. Low-frequency risks also take longer and are far harder to quantify, and the lesson of ``Tell Your Children'' and the National Academy report is that we aren't yet in a position to do so. For the moment, cannabis probably belongs in the category of substances that society permits but simultaneously discourages. Cigarettes are heavily taxed, and smoking is prohibited in most workplaces and public spaces. Alcohol can't be sold without a license and is kept out of the hands of children. Prescription drugs have rules about dosages, labels that describe their risks, and policies that govern their availability. The advice that seasoned potheads sometimes give new users--``start low and go slow''--is probably good advice for society as a whole, at least until we better understand what we are dealing with.

Late last year, the commissioner of the Food and Drug Administration, Scott Gottlieb, announced a federal crackdown on e-cigarettes. He had seen the data on soaring use among teen-agers, and, he said, ``it shocked my conscience.'' He announced that the F.D.A. would ban many kinds of flavored e- cigarettes, which are especially popular with teens, and would restrict the retail outlets where e- cigarettes were available.

In the dozen years since e-cigarettes were introduced into the marketplace, they have attracted an enormous amount of attention. There are scores of studies and papers on the subject in the medical and legal literature, grappling with the questions raised by the new technology. Vaping is clearly popular among kids. Is it a gateway to traditional tobacco use? Some public-health experts worry that we're grooming a younger generation for a lifetime of dangerous addiction. Yet other people see e-cigarettes as a much safer alternative for adult smokers looking to satisfy their nicotine addiction. That's the British perspective. Last year, a Parliamentary committee recommended cutting taxes on e-cigarettes and allowing vaping in areas where it had previously been banned. Since e-cigarettes are as much as ninety-five per cent less harmful than regular cigarettes, the committee argued, why not promote them? Gottlieb said that he was splitting the difference between the two positions--giving adults ``opportunities to transition to non-combustible products,'' while upholding the F.D.A.'s ``solemn mandate to make nicotine products less accessible and less appealing to children.'' He was immediately criticized.``Somehow, we have completely lost all sense of public-health perspective,'' Michael Siegel, a public-health researcher at Boston University, wrote after the F.D.A. announcement:

Every argument that the F.D.A. is making in justifying a ban on the sale of electronic cigarettes in convenience stores and gas stations applies even more strongly for real tobacco cigarettes: you know, the ones that kill hundreds of thousands of Americans each year. Something is terribly wrong with our sense of perspective when we take the e-cigarettes off the shelf but allow the old-fashioned ones to remain.

Among members of the public-health community, it is impossible to spend five minutes on the e-cigarette question without getting into an argument. And this is nicotine they are arguing about, a drug that has been exhaustively studied by generations of scientists. We don't worry that e- cigarettes increase the number of fatal car accidents, diminish motivation and cognition, or impair academic achievement. The drugs through the gateway that we worry about with e-cigarettes are Marlboros, not opioids. There are no enormous scientific question marks over nicotine's dosing and bio-availability. Yet we still proceed cautiously and carefully with nicotine, because it is a powerful drug, and when powerful drugs are consumed by lots of people in new and untested ways we have an obligation to try to figure out what will happen.

A week after Gottlieb announced his crackdown on e- cigarettes, on the ground that they are too enticing to children, Siegel visited the first recreational-marijuana facility in Massachusetts. Here is what he found on the menu, each offering laced with large amounts of a drug, THC, that no one knows much about:

Strawberry-flavored chewy bites

Large, citrus gummy bears

Delectable Belgian dark chocolate bars

Assorted fruit-flavored chews

Assorted fruit-flavored cubes

Raspberry flavored confection

Raspberry flavored lozenges

Chewy, cocoa caramel bite-sized treats

Raspberry & watermelon flavored lozenges

Chocolate-chip brownies. He concludes, ``This is public health in 2018?''

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Mr. McHENRY. Mr. Speaker, I appreciate the gentleman from Colorado's willingness to work with several of my colleagues on this side of the aisle. I want to commend him and the gentleman from Ohio (Mr. Stivers), once again, for their commitment to this effort.

This version of the legislation before us right now is dramatically improved and includes a number of Republican priorities, such as language on Operation Choke Point, and a solution that will help industrial hemp farmers across the country, but most especially in Kentucky.

Yet, Mr. Speaker, there are many questions left to be answered. We do not fully understand the sweeping implications of this legislation. We do not yet know what the resulting regulatory regime will look like, nor do we have any assurance that it will not expose the current financial system to illicit activity. In particular, as it is currently drafted, H.R. 1595 offers insufficient safeguards against drug cartels accessing the banking system.

What this legislation does is provide a half answer to a much larger problem than just banking. We owe it to our constituents and to the public to have a serious debate on the underlying issue, and that is the issue of whether or not cannabis should be considered a schedule I substance under the Controlled Substances Act. I know Mr. Perlmutter and I share that same sentiment that we should have that larger debate.

In the meantime, Congress is working in a bipartisan way to come up with at least a measure of a solution, but I am hopeful that we can get the medical research necessary and the FDA processes necessary for us to have that larger debate as well. I would welcome that debate, as I know the American people would as well.

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Mr. McHENRY. Mr. Speaker, how much time remains?
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Mr. McHENRY. Madam Speaker, I yield 3 minutes to the gentleman from Columbus, Ohio (Mr. Stivers), who is the ranking member of the National Security, International Development and Monetary Policy Subcommittee of the Financial Services Committee. He is a great advocate for the bill.

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Mr. McHENRY. Madam Speaker, I yield 2 minutes to the gentleman from Kentucky (Mr. Barr), chair of the Subcommittee on Oversight and Investigations of the Committee on Financial Services.

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Mr. McHENRY. Madam Speaker, I yield 1 minute to the gentleman from Ohio (Mr. Davidson), a great member of the Committee on Financial Services.

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Mr. McHENRY. Madam Speaker, may I inquire how much time I have remaining.

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Mr. McHENRY. Madam Speaker, I yield 1 minute to the gentleman from Florida (Mr. Gaetz).

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Mr. McHENRY. Madam Speaker, may I inquire how much time I have remaining.

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Mr. McHENRY. Madam Speaker, I am prepared to close, and I yield myself such time as I may consume.

Madam Speaker, let me begin as I did with my opening statement. I commend the gentleman from Colorado (Mr. Perlmutter) for how he has managed this bill and brought it to the floor.

What we have here on the House floor, and we are debating now, is a much broader bill and, therefore, will have a much broader vote than what we had in committee, however limited we were in committee jurisdiction.

Madam Speaker, I know if the gentleman from Colorado (Mr. Perlmutter) were on the Appropriations Committee, he would have worked for medical research funding. I know that if he were on the Energy and Commerce Committee, he would have worked for an FDA process on cannabis. And if he were on the Committee on the Judiciary, he would have worked to deschedule the drug.

However, we find ourselves on the Financial Services Committee, and this is not a normal conversation that we have on the committee. But this is addressing a key issue that many States are facing, and many financial institutions, credit unions, and banks are facing, which is how to bank people with a lot of cash, with a product that is legal at the State level but defined at the Federal level as an illicit substance that is harmful for human consumption.

While Congress is taking this half-measure, it doesn't resolve the issue. It does not resolve the issue of medical research or understanding the brain science and how cannabis affects the adolescent brain. There are enormous questions there. There are enormous questions about the Federal Criminal Code. But these are things that we should be debating rather than this half-measure on banking.

While this is an important step on the question of the overall legalization of this drug, it still doesn't resolve the issue fully.

Madam Speaker, I ask my colleagues for a ``no'' vote, but I expect this vote will pass on the suspension calendar today. I thank my colleague for his handling of this important issue and the wise nature of how he has approached the amendment process to address many different equities across the country. I yield back the balance of my time.

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Mr. McHENRY. Madam Speaker, on that I demand the yeas and nays.

The yeas and nays were ordered.

The vote was taken by electronic device, and there were--yeas 321, nays 103, not voting 9, as follows: [Roll No. 544] YEAS--321 Adams Aguilar Allred Amash Amodei Armstrong Axne Bacon Baird Balderson Banks Barr Barragan Bass Beatty Bera Beyer Bishop (GA) Bishop (UT) Blumenauer Blunt Rochester Bonamici Bost Boyle, Brendan F. Brindisi Brooks (AL) Brown (MD) Brownley (CA) Bustos Butterfield Carbajal Cardenas Carson (IN) Cartwright Case Casten (IL) Castor (FL) Castro (TX) Chu, Judy Cicilline Cisneros Clark (MA) Clarke (NY) Clay Cleaver Cohen Cole Collins (GA) Collins (NY) Comer Connolly Cooper Correa Costa Courtney Cox (CA) Craig Crenshaw Crist Crow Cuellar Cunningham Curtis Davids (KS) Davidson (OH) Davis (CA) Davis, Danny K. Davis, Rodney Dean DeFazio DeGette DeLauro DelBene Delgado Demings DeSaulnier Deutch Dingell Doggett Doyle, Michael F. Emmer Engel Escobar Eshoo Espaillat Estes Evans Ferguson Finkenauer Fitzpatrick Fleischmann Fletcher Flores Foster Frankel Fudge Gabbard Gaetz Gallego Garamendi Garcia (IL) Garcia (TX) Gibbs Golden Gomez Gonzalez (OH) Gonzalez (TX) Gooden Gottheimer Graves (GA) Green (TN) Green, Al (TX) Griffith Grijalva Grothman Haaland Hagedorn Harder (CA) Hastings Hayes Heck Hern, Kevin Herrera Beutler Higgins (NY) Hill (AR) Hill (CA) Himes Hollingsworth Horn, Kendra S. Horsford Houlahan Hoyer Huffman Hunter Jackson Lee Jayapal Jeffries Johnson (GA) Johnson (OH) Johnson (TX) Joyce (OH) Kaptur Katko Keating Keller Kelly (IL) Kelly (PA) Kennedy Khanna Kildee Kilmer Kim Kind King (NY) Kinzinger Kirkpatrick Krishnamoorthi Kuster (NH) Lamb Langevin Larsen (WA) Larson (CT) Lawrence Lawson (FL) Lee (CA) Lee (NV) Levin (CA) Levin (MI) Lewis Lieu, Ted Lipinski Loebsack Lofgren Long Loudermilk Lowenthal Lowey Luetkemeyer Lujan Luria Lynch Malinowski Maloney, Carolyn B. Maloney, Sean Massie Mast Matsui McAdams McBath McCarthy McClintock McCollum McGovern McKinley McNerney Meeks Meng Meuser Miller Mitchell Mooney (WV) Moore Morelle Moulton Mucarsel-Powell Murphy (FL) Nadler Napolitano Neal Neguse Newhouse Norcross Norman Nunes O'Halleran Ocasio-Cortez Olson Omar Pallone Panetta Pappas Pascrell Payne Perlmutter Perry Peters Peterson Phillips Pingree Pocan Porter Pressley Price (NC) Quigley Raskin Reed Reschenthaler Rice (NY) Rice (SC) Richmond Riggleman Rodgers (WA) Roe, David P. Rogers (AL) Rooney (FL) Rose (NY) Rouda Roybal-Allard Ruiz Ruppersberger Rush Ryan Sanchez Sarbanes Scanlon Schakowsky Schiff Schneider Schrader Schrier Schweikert Scott (VA) Scott, David Serrano Shalala Sherman Sherrill Simpson Sires Slotkin Smith (WA) Smucker Soto Spanberger Spano Speier Stanton Stauber Stefanik Steil Steube Stevens Stivers Suozzi Swalwell (CA) Takano Taylor Thompson (CA) Thompson (MS) Thompson (PA) Timmons Tipton Titus Tlaib Tonko Torres Small (NM) Trahan Trone Underwood Upton Van Drew Vargas Veasey Vela Velazquez Visclosky Walden Waltz Wasserman Schultz Waters Watkins Watson Coleman Welch Wexton Wild Wilson (FL) Womack Yarmuth Yoho Young Zeldin NAYS--103 Aderholt Allen Arrington Babin Bergman Biggs Bilirakis Bishop (NC) Brady Brooks (IN) Buchanan Buck Bucshon Budd Burchett Burgess Byrne Calvert Carter (GA) Carter (TX) Chabot Cheney Cline Cloud Conaway Cook DesJarlais Diaz-Balart Duncan Dunn Fortenberry Foxx (NC) Fulcher Gallagher Gianforte Gohmert Gosar Granger Graves (LA) Graves (MO) Guest Guthrie Harris Hartzler Hice (GA) Holding Hudson Huizenga Hurd (TX) Johnson (LA) Johnson (SD) Jordan Joyce (PA) Kelly (MS) King (IA) Kustoff (TN) LaHood LaMalfa Lamborn Latta Lesko Lucas Marchant McCaul McHenry Meadows Moolenaar Mullin Murphy (NC) Palazzo Palmer Pence Posey Ratcliffe Roby Rogers (KY) Rose, John W. Rouzer Roy Rutherford Scalise Scott, Austin Sensenbrenner Sewell (AL) Shimkus Smith (MO) Smith (NE) Smith (NJ) Stewart Thornberry Turner Wagner Walberg Walker Walorski Weber (TX) Webster (FL) Wenstrup Westerman Williams Wilson (SC) Wittman Woodall NOT VOTING--9 Abraham Clyburn Crawford Cummings Higgins (LA) Marshall McEachin Torres (CA) Wright

Messrs. SENSENBRENNER, BUCHANAN, and Ms. SEWELL of Alabama changed their vote from ``yea'' to ``nay.''

Messrs. EMMER, NADLER, Mrs. LURIA, Messrs. HUNTER, WOMACK, LONG, Ms. STEFANIK, Messrs. RESCHENTHALER and TIMMONS changed their vote from ``nay'' to ``yea.''

So (two-thirds being in the affirmative) the rules were suspended and the bill, as amended, was passed.

The result of the vote was announced as above recorded.

A motion to reconsider was laid on the table.

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Source