Politics
Former Top State Marijuana Regulator To Testify At U.S. Senate Banking Hearing This Week
A former top state marijuana regulator and current executive at a cannabis consulting firm will participate in a Senate committee hearing on banking issues this week.
While attention within the cannabis community is largely focused on a potentially imminent marijuana rescheduling decision by President Donald Trump, the Senate Banking Subcommittee on Financial Institutions and Consumer Protection will likely be discussing an adjacent issue for the marijuana industry: The lack of banking access for cannabis companies under federal prohibition.
Tyler Klimas—who served as executive director of the Nevada Cannabis Compliance Board (CCB) and was a founding member of the Cannabis Regulators Association (CANNRA) before becoming the founder of Leaf Street Strategies—will testify before the panel as the Democratic minority’s witness.
The hearing, which is scheduled for Tuesday, is titled “Ensuring Fair Access to Banking: Policy Levers and Legislative Solutions.” The description of the meeting doesn’t specifically mention marijuana, but Klimas’s participation signals that, at least on the Democratic side, there’s interest in addressing the industry’s banking issues.
The hearing is set to take place about two weeks after a GOP member of the House Financial Services Committee, Rep. Warren Davidson (R-OH), raised the cannabis banking issue with Comptroller Jonathan Gould at a meeting of that panel.
“Nearly every state, whether you like it or not, has made some form of marijuana lawful in those states, and we haven’t synced up at the federal level,” Davidson said. “So I’d love to catch up on how we’re doing that.”
Many banks continue to resist accepting even state-licensed cannabis businesses as clients because of the potential risk of federal enforcement action given that marijuana remains a Schedule I drug under the Controlled Substances Act (CSA). However, some banks and credit unions have taken that gamble, while following Obama-era reporting guidance to mitigate the risk.
There was a surge in reporting last week about a soon-to-come Trump administration action on a proposal to move marijuana to Schedule III, with varying predictions about the timing of the announcement.
On banking, the increased willingness of certain financial institutions to work with marijuana businesses is partly connected to the perception that Congress could pass bipartisan legislation protecting those banks from being penalized by federal regulators simply for servicing the industry.
That said, the prospects of advancing something like the Secure and Fair Enforcement Regulation (SAFER) Banking Act in the near future seem doubtful. Multiple key House and Senate lawmakers told Marijuana Moment last month that the issue has taken a back seat to other legislative priorities.
Sen. Bernie Moreno (R-OH), who is expected the carry the marijuana banking measure in his chamber this Congress, previously said that he imagined the bill would come up over the fall. Those comments came before a historically long government shutdown, however, and the bill has not yet been filed in either chamber for the current session.
Sen. Jeff Merkley (D-OR), who has sponsored the legislation in prior sessions, told Marijuana Moment that the banking issue is among those Congress has put “on the back burner,” with Democrats focused on other priorities such as preserving health care subsidies under the Affordable Care Act.
On the House side, Rep. Lou Correa (D-CA) said “it feels like I’ve heard nothing” about the path forward for SAFE Banking, and he feels “by now we should’ve had some buzz on it.”
The House has passed versions of the legislation seven times over recent sessions. It advanced out of committee in the Senate last Congress, but it was not taken up on the floor.
One of the most proactive anti-cannabis lawmakers on Capitol Hill, Rep. Andy Harris (R-MD), told Marijuana Moment that he’s not sure about the status of the banking bill but he remains of the mind that, “if it’s illegal at the federal level, it should be kept out of the banking system.”
“But it’s the will of the chamber. My position hasn’t changed,” he said. “I don’t hear that [the bill is moving], but it’s been tried before. It may succeed this year. I don’t know.”
The comments from the bipartisan and bicameral lawmakers came about a month after bipartisan senators said they remain eager to advance the marijuana banking measure—though there was disagreement about whether a possible decision from Trump to reschedule cannabis would open the door to passing additional reforms in Congress.
Sen. Steve Daines (R-MT), who’s been the lead GOP sponsor of that banking measure in past sessions, said he’s “not sure absolutely” whether moving marijuana from Schedule I to Schedule III of the Controlled Substances Act (CSA) would meaningfully affect how his colleagues approach the financial services legislation. He said “many senators hold strong opinions,” and “they keep those opinions separate from SAFE Banking.”
Unlike Daines, Sen. Ron Wyden (D-OR) said rescheduling would send a “huge message” to his colleagues about the need to “finally come up with a modern approach” to marijuana laws.
Moreno, for his part, said he did feel that Trump advancing rescheduling would be an “important domino” to advance the bipartisan cannabis banking legislation.
The upcoming House committee hearing comes months after senators on both sides of the aisle addressed the lack of banking access for the marijuana industry at a separate hearing in February, with one GOP member suggesting that the issue warrants a broader examination of federal cannabis policies.
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Meanwhile, during a House Appropriations Committee markup in September, Rep. Betty McCollum (D-MN) criticized the exclusion of provisions to protect banks that work with state-licensed marijuana and hemp businesses from a key spending bill.
Relatedly, a bipartisan coalition of 32 state and territory attorneys general from across the U.S. recently called on Congress to pass a marijuana banking bill to free up financial services access for licensed cannabis businesses.
In January, the office of Rep. Dave Joyce (R-OH), who is again leading the effort on the House, told Marijuana Moment that he would be filing the cannabis banking legislation this session but that its introduction was “not imminent” as some earlier reports had suggested.
