Why is the VA Denying Home Loans to Veterans Who Work in the Marijuana Industry? (Guest Post)

The VA is denying home loans to applicants working in the marijuana industry.

On May 23, 2019, Democrats in Congress, including U.S. Rep. Katherine Clark from Massachusetts, delivered a letter to Robert Wilkie, the Secretary of the U.S. Department of Veterans Affairs. Representative Clarke and her co-signors wanted to know why, under his leadership, the Veterans Administration (VA) regularly turns down veterans for home loans if they work in the marijuana industry within a legalized state. You can read the letter here:

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Marijuana remains a Schedule I drug at the federal level in the United States. However, the government does not need to harass, as the Trump administration has, or make life more difficult for individuals living and working in states where the marijuana plant is legal. In fact, since 2014, federal law has prohibited the Department of Justice (DOJ) from using taxpayer funds to prevent states from implementing their own state laws that authorize the use, distribution, possession or cultivation of medical marijuana. This law has been interpreted to prohibit DOJ from prosecuting medical marijuana providers or patients who are in compliance with state law.

Veterans who smoke, vape, or work in the cannabis industry, and who already have the deck stacked against them, should not be denied home loans. Let’s look at what’s happening, why it’s a problem, and what needs to change.

Why Is the VA Turning Down Veterans for Loans?

According to Clark, the Department of Veterans Affairs has an unpublished policy stating that the office does not consider employment in industries related to marijuana as either reliable or stable. These are among the two most important criteria for determining creditworthiness and who qualifies to purchase a home. The trouble is, the VA has never issued formal guidance on this issue. (That’s what the word “unpublished” means.) This appears to be an overstep by any measure, which is why Clark and two dozen other members of Congress are beginning to ask questions.

One of those questions is whether words like “unstable” and “unreliable” are the best choices to describe America’s burgeoning marijuana industries, as the VA is doing now.

If anything, the evidence points in the opposite direction. Colorado made so much money from selling marijuana in the early years that it had to pay its citizens an extra dividend to balance the state’s checkbooks. Having the cannabis industry establish a presence in Colorado also coincided with rising tourism. It also helped reduce numbers for some types of crimes and hospitalizations.

Each of these positive signs tell us the VA’s longstanding unpublished doctrine that throws shade on marijuana industry workers is badly out of date and in need of a rewrite.

Importantly, youth rates of marijuana use are dropping in legalized states, and stacks of evidence say it’s mostly harmless for consenting and healthy adults.

So why the stigma? And why give veterans, specifically, a hard time about this?

Why Is This Significant?

The 1944 G.I. Bill has spent the last 75 years providing a framework and a support system that returning veterans could use to purchase their own home, backed by the United States VA. Back then, having entire states with functioning and bustling marijuana industries was very much a pipe dream. However, it’s come true before our eyes.

Now some of our existing rules need to catch up. This will help veterans who work in this quickly growing industry, which employs 200,000 Americans and counting.

In its defense, the VA states it’s chosen to continue enforcing this decision because it is concerned about getting entangled with the Department of Justice and its anti-money-laundering statutes. The VA is worried about the DoJ prosecuting it for being complicit in criminal activity.

Clark and her Congressional cohort expressed their sympathies in a letter: “The ambiguity under which the cannabis industry operates is unique, and we fully understand the VA’s aversion to legal and financial risk … [but] denying veterans the benefits they’ve earned … is contrary to the intent Congress separately demonstrated in its creation of VA benefit programs.

It’s also contrary to the spirit of the marijuana industry itself. Part of its mission involves delivering medical aid to people who haven’t been able to find relief from other sources.

Breaking Down Barriers and Budding Industries

The good marijuana does is getting very difficult to ignore or deny. That’s why it’s encouraging that some presidential hopefuls are introducing legislation ideas to remove several legal barriers from this picture. One House bill from March would make it legal and safe for marijuana growers and other companies to take part in government financial systems.

Compassionate souls and talented lawmakers are pushing the legal boundaries. However, states, patients, and concerned citizens can continue doing their part to raise awareness and bring change too. We encourage you to call and write to members of Congress. You can also contact those in unelected positions, such as VA secretaries, who often help with important policy issues.

August 12, 2019

This is a guest post by Kate Harveston, a freelance health and wellness writer and cannabis advocate. You can read more of Kate’s writing at her personal blog, So Well, So Woman!

Rod Kight is an attorney who represents lawful cannabis businesses. He speaks at cannabis conferences across the country, drafts and presents cannabis legislation to foreign governments, is regularly quoted on cannabis matters in the media, and maintains the Kight on Cannabis legal blog, where he discusses legal issues affecting the cannabis industry. You can contact him here.

2 comments on “Why is the VA Denying Home Loans to Veterans Who Work in the Marijuana Industry? (Guest Post)Add yours →

  1. This is a problem on the private lending industry as well, not just Gov subsidized veteran loans; Cannabis income is not included as income in mortgage applications.

    1. Yes. Unfortunately, this is a big and systemic problem. I am hopeful that Congress will remedy it this coming term.

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