Global Ganja Report

Critical legislation that would allow the cannabis industry to access financial services has passed the Democratic-controlled House of Representatives for yet a sixth time—but will likely be killed once again by the Senate, where the Democratic majority is razor-thin.

Under current federal law, financial institutions face stiff penalties for carrying out business with cannabis enterprises. The Secure & Fair Enforcement (SAFE) Banking Act would change that—allowing cannabis businesses operating in conformity with state law to access financial services, including the federal banking system.

Fve times, the SAFE Banking Act had been approved by the House before the current session. It was first introduced in May 2017 under the sponsorship of Sen. Jeff Merkley (D-OR) and Rep. Ed Perlmutter (D-CO), and first passed the House in September 2019 by a vote of 321 to 103. This was after a group of attorneys general from 38 states and territories penned an open letter urging Capitol Hill to pass the bill, saying it would serve the aims of “protecting public safety and bringing grey market financial activities into the regulated banking sector.” Nonetheless, it died in the Senate.

In May 2020, it was folded into the Democrats’ COVID-19 recovery package, with the vocal endorsement of House Speaker Nancy Pelosi. But the package fell victim to the partisan divide, and was effectively dead on arrival in the Senate.

The SAFE Banking Act again passed the House as a stand—alone bill in October 2020—to again die in the Senate.

In September 2021, it was folded into the fiscal 2022 National Defense Authorization Act (NDAA), which was days later approved by the House.

On Nov. 10, passage was urged in another open letter to Congress—this time by 24 state governors. The letter asserted that the “cannabis industry is legal in some form in the majority of US states and [is] too large of a market to be prohibited from banking opportunities.”

And another letter came on Nov. 23, from a bipartisan group of Senators, calling on the chamber’s Republican leadership to keep the SAFE Banking Act in the NDAA. Nonetheless, in early December the measure was stripped out of the Senate version of the NDAA.

And now we have just seen yet a sixth passage of the SAFE Banking Act—this time as a part of the America COMPETES Act. The grandiosely entitled America Creating Opportunities for Manufacturing, Pre-Eminence in Technology Act is intended to counter China's growing influence on the world stage, and is likely to win bipartisan support. It is also likely, alas, that the Republicans will again strip out the SAFE Banking provisions when it gets to the Senate.

Ironically, November 2021 also saw the first Republican-introduced cannabis legalization bill. The States Reform Act, sponsored by Rep. Nancy Mace of South Carolina, would deschedule cannabis and leave regulation up to the states. So while partisan paralysis has heretofore blocked the SAFE Banking Act, there is hope even for Republican enlightenment on the cannabis question—eventually. (National Law Review, Mondaq, Investopedia, CNN, NORML blog)

This story first appeared in the June issue of Cannabis Now magazine

Graphic: DRCNet

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