A bipartisan marijuana banking bill that House and Senate lawmakers refiled this week is getting praise from many of the major marijuana industry stakeholders and financial institutions who’ve backed earlier versions of the reform. And key advocates— including critics of the measure’s limited equity provisions—are giving tepid support for revisions in the latest version, urging further work on the legislation as it advances.
That work could also mean making changes that assuage the concerns of Senate Banking Committee Chairman Sherrod Brown (D-OH), whose panel is expected to be the first to take up the bill. The senator said on Thursday that committee consideration is being delayed because banking industry representatives are trying to use the legislation to “weaken bank rules” and “undermine” regulations—though it’s not immediately clear what he meant by that.
— Don Murphy (@donmurphy12a) April 27, 2023
In any case, the Secure and Fair Enforcement (SAFE) Banking Act is considered one of the more passable pieces of cannabis legislation this session under a divided Congress with Republicans in control of the House. And while earlier versions faced scrutiny from certain equity-focused advocates, they’re encouraged by certain changes, indicating that the bill’s coalition of supporters could strengthen this session.
The legislation—which is being sponsored by Sens. Jeff Merkley (D-OR) and Steve Daines (R-MT), along with Reps. Dave Joyce (R-OH) and Earl Blumenauer (D-OR)—would safeguard banks that work with state-legal cannabis businesses against being penalized by federal regulators.
Last Congress, there was some pushback against the standalone proposal, with equity advocates voicing concern that its passage would primarily benefit large marijuana corporations, while potentially undercutting efforts to enact comprehensive legalization that addresses the harm of the war on drugs.
But there seems to be agreement around a new strategy that lawmakers have described: get a clean SAFE Banking Act through committee and onto the floor where they could attach justice-focused amendments and create a “SAFE Plus” package.
The standalone does contain some changes from the last version that advocates have applauded, including protections for Community Development Financial Institutions (CDFIs) and Minority Depository Institutions (MDIs) that make commercial loans to minority-owned businesses.
Another addition to the bill that wasn’t in prior versions provides marijuana industry workers access to federally backed mortgage loans.
Further, the bill’s data collection and reporting requirements have been revised in a way that advocates say will provide more robust information about barriers to financial services and marijuana industry participation by minorities, women, veterans and small businesses.
The legislation also clarifies that the financial protections apply to the hemp market, as well as marijuana businesses.
Here’s how advocates and stakeholders are reacting to the refiled SAFE Banking Act:
American Bankers Association (ABA)
“This commonsense, bipartisan bill, which has already cleared the House multiple times, would resolve the ongoing conflict between state and federal law so that banks can serve state-authorized cannabis and cannabis-related businesses,” ABA said in a statement.
This commonsense, bipartisan bill would resolve the ongoing conflict between state and federal law so that banks can serve state-authorized cannabis and cannabis-related businesses, and would also enhance public safety.
— American Bankers Association (@ABABankers) April 27, 2023
“The SAFE Banking Act would also enhance public safety, tax collection and financial transparency, and national surveys show a strong majority of Americans support this bill,” the association said. “We urge Congress to consider this legislation without delay.”
Cannabis Regulators of Color Coalition (CRCC)
“We are delighted to see the SAFE Banking Act reintroduced with some of the changes we have been advocating for,” Dasheeda Dawson, chair of CRCC, said in a press release. “However, more needs to be done to establish a fairer playing field—especially for those that have been most harmed by prohibition and continue to face extreme barriers to entry.”
Dawson proposed additional “relatively minor changes” to the standalone bill, including language that would prevent financial institutions from using a person’s prior marijuana conviction record as the basis for automatically flagging their accounts.
“Without this type of change, marijuana criminal records will continue to be a significant barrier towards participation in state-legal marijuana industries, disproportionately impacting Black, Latinx and Indigenous entrepreneurs,” she said. “It could also lead to federal interference against state licensing programs that have attempted to create more diverse ownership opportunities. Incorporating these additional technical changes to the bill could go a long way in ensuring commercial lending access for minority and directly-impacted marijuana businesses.”
CRCC Vice Chair Cat Packer said that “there are several technical amendments that can be made to SAFE to make banking access more FAIR. That’s what the F in SAFE stands for by the way!”
👏🏾👏🏾 there are several technical amendments that can be made to SAFE to make banking access more FAIR. That’s what the F in SAFE stands for by the way! @crc_coalition @DrugPolicyOrg and our allies are seeking simple, common sense changes that would improve access for everyone. https://t.co/2z2tifKVFI
— Cat Packer (@cat_packer) April 27, 2023
Credit Union National Association (CUNA)
“This legislation provides safe, mainstream options for state-legalized businesses to conduct their financial needs,” CUNA President and CEO Jim Nussle said. “We appreciate Senators Merkley and Daines, and Representatives Joyce and Blumenauer, for introducing this bipartisan legislation in both chambers, and will work to advance the bills this Congress.”
Troy Stang, CEO of GoWest Credit Union Association, added that “this is a critical public safety issue for our communities, and this is common sense legislation.”
Drug Policy Alliance (DPA)
“The improvements to the study and data collection provisions in the SAFE Banking Act are a welcome addition to the bill,” Maritza Perez Medina, director of the office of federal affairs at DPA, said. “These minor modifications to the bill will ensure that timely and more comprehensive data collection takes place to measure whether banking services are being provided in a fair way.”
“While there remains much more work to be done and we remain neutral on the legislation, the changes are an encouraging sign that the bill is headed in the right direction,” she said. “As this legislation moves forward, more should be done to lessen the barriers to entry small marijuana businesses face in obtaining commercial lending. Without this, it remains impossible for them to compete with large, multi-state operators.”
“As such, we look forward to continuing working with stakeholders to improve this bill in a way that most benefits the communities that have been disproportionately impacted by prohibition,” Perez Medina said.
Minority Cannabis Business Association (MCBA)
“MCBA has been working diligently to improve this bill over the last few years, and we are grateful that our suggestions have been incorporated into the latest text,” MCBA President Kaliko Castille said. “We believe the final bill can be a crucial first step in ensuring a more equitable cannabis industry and look forward to partnering with Republican and Democratic offices to address the public safety issues at hand by passing this bi-partisan bill that is supported by small businesses around the country.”
National Cannabis Roundtable (NCR)
Saphira Galoob, executive director of NCR, said that the legislation is “critical for public safety, allowing cannabis companies that are currently forced to operate in cash-heavy manners to bank their businesses like any other domestic industry.”
While #SAFEBanking should include access to the full array of financial resources currently denied to domestic cannabis operators, including institutional investments & the senior exchanges, we are hopeful that this critical language will be added during the committee process. pic.twitter.com/UpnvUw5YMD
— National Cannabis Roundtable (@FollowNCR) April 26, 2023
“NCR looks forward to this bill’s consideration through the regular committee process in the Senate, and to working with those on both sides of the Capitol to get this important bill across the finish line,” she said. “By passing SAFE Banking and providing meaningful access to capital, Congress can enhance public safety and crack down on Chinese-backed illicit operations, support jobs in 38 states with legal programs, and create equitable economic opportunities for American businesses.”
“If cannabis businesses are to have any hope of operating safely, transparently, and in a manner that is competitive with the existing underground market, Congress must pass SAFE Banking now,” NORML Political Director Morgan Fox said in a press release. “It is irresponsible to shut this heavily regulated industry out of the US financial system. Every day that Congress fails to act further endangers small businesses and consumers, puts regulators and law enforcement at a disadvantage, and facilitates the activities of unlicensed operators and criminal organizations.”
“The vast majority of Americans across the political spectrum support cannabis banking reform,” Fox said. “Even lawmakers representing the rapidly dwindling number of states without some form of regulated cannabis market should be able to see the necessity of passing this narrowly tailored, commonsense legislation that encourages small business growth, improves accountability, and saves lives.”
Parabola Center for Law and Policy
Shaleen Title, founder and director of the Parabola Center, which is neutral on the bill, told Marijuana Moment that the changes in the latest banking bill “are minor.”
“Even with the changes, the bill might still do more harm than good by widening inequities and leaving the small businesses currently without banking in an even worse position,” she said. “But, minor changes are real and their minor impact is real, and more importantly, the changes demonstrate that the sponsors are listening and willing to adapt. The next step is to rally around more improvements as the bill progresses.”
U.S. Cannabis Council (USCC)
USCC “welcomes today’s introduction of the SAFE Banking Act,” Chair Jessica Billingsley said. “The bill provides vital protections for regulated cannabis businesses–including small businesses and entrepreneurs–to access financial services on a more level playing field with other industries.”
“Federal law has forced the nation’s $30+ billion cannabis industry to conduct business almost entirely in cash,” she said. “As a result, dispensaries have become an attractive target for armed criminals, and lives have been lost. This status quo benefits armed robbers and illicit operators–and no one else.”
“The bill enjoys strong, bipartisan and bicameral support, and we look forward to engaging with leaders in both chambers to secure its passage,” she added. “We are thankful for the ongoing support of the bill’s bipartisan lead sponsors in advancing this critical legislation.”
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Again, the first hurdle for the bill will be clearing the Senate Banking Committee—and while the chairman has previously signaled his interest in advancing it with equity amendments, he said this week that he’s “skeptical” about measures that bankers use to influence broader regulations. He did have an answer for when the legislation might be taken up in his panel.
For his part, Senate Majority Leader Chuck Schumer (D-NY) is reiterating his commitment to advancing the marijuana banking legislation with criminal justice provisions included, calling the broader effort to repair the harms of the drug war a “moral responsibility” for Congress.
“Right now, the norm for the cannabis businesses is to operate on all cash, and that is simply not fair: it exposes them to too many risks and stifles their opportunities to grow,” Schumer said. “Congress should be in the business of promoting entrepreneurs, promoting job growth, not holding these things back.”
With a divided Congress that has Republicans in control of the House, the expectation is that lawmakers will need to focus on incremental marijuana measures like the banking bill, instead of broader justice-centered legalization, to get any amount of reform passed this session.
But a vote in the Senate on Wednesday has raised questions about whether any modest cannabis reform is achievable under the current congressional makeup. Senate Republicans blocked a procedural motion to advance a bipartisan bill to simply require studies into the medical potential of cannabis for military veterans with chronic pain and PTSD.
The standalone SAFE Banking Act has been approved along largely bipartisan lines in the House in some form several times in recent years. But it’s consistently stalled out in the Senate under both Democratic and Republican leadership.
Last week, Schumer said that he was “disappointed” that the so-called SAFE Plus package of marijuana banking and expungements legislation he worked on last year didn’t advance, saying “we came close,” but “we ran into opposition in the last minute.” He said lawmakers will continue to “work in a bipartisan way” to get the job done.
The majority leader has been holding meetings with Democratic and Republican members in the early months of the new Congress to discuss cannabis reform proposals that might have bipartisan buy-in this year.
For his part, Sen. Cory Booker (D-NJ) said recently that lawmakers are working to “resurrect” the cannabis reform package, acknowledging that failure to advance a banking fix for the industry “literally means that hundreds of businesses go out of business.
Blumenauer, who filed a bill to allow marijuana businesses to take federal tax deductions last week, said at a recent press briefing that thinks it’s important that advocates and lawmakers align on any incremental proposals to end the drug war, warning against an “all-or-nothing” mentality.
There have been a number of cannabis reform proposals filed in recent weeks, particularly in the lead-up to the 4/20 holiday last week.
For example, bipartisan lawmakers in both chambers reintroduced legislation on Thursday to provide a safe harbor to insurance companies that work with state-legal cannabis businesses.
Rep. Brian Mast (R-FL) introduced legislation last week to protect the Second Amendment rights of people who use marijuana in legal states, allowing them to purchase and possess firearms that they’re currently prohibited from having under federal law.
Reps. Dave Joyce (R-OH) and Alexandria Ocasio-Cortez (D-NY) have filed a bill to incentive state and local marijuana expungements with a federal grant program.
Earlier this month, Joyce and House Minority Leader Hakeem Jeffries (D-NY) filed a measure designed to prepare the federal government for marijuana legalization, directing the attorney general to form a commission to study and make recommendations about regulating cannabis in a way similar to alcohol.