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Key GOP Congressman Keeps Door Open For Marijuana Banking In 2023, While Law Enforcement Steps Up Push For Passage In Lame Duck



As advocates and stakeholders wait to see whether a large-scale spending bill will contain marijuana banking reform, the incoming Republican chair of a key House committee says that while he still opposes the proposal, he wouldn’t stand in its way.

At the same time, reform friendly law enforcement representatives are sending a clear and coordinated message to Congress to pass the Secure and Fair Enforcement (SAFE) Banking Act now with the limited time that’s left in the lame duck session.

The omnibus appropriations legislation that supporters are hoping will serve as the vehicle for the cannabis banking measure is expected to be released as soon as Monday. There’s been a mix of optimism and pessimism as to the prospects of seeing that language attached, with doubts compounding in recent days as key lawmakers like Senate Minority Leader Mitch McConnell (R-KY) have voiced opposition to enacting the marijuana reform as part of the broader legislation.

An attempt to pass SAFE Banking through the National Defense Authorization Act (NDAA) already failed earlier this month, which McConnell celebrated and later said should inform the congressional approach to the spending package.

House SAFE Banking sponsor Rep. Ed Perlmutter (D-CO) has been “talking to leadership” about moving the reform through the appropriations process, a staffer with his office told Marijuana Moment last week. Senate Banking Committee Chairman (D-OH) has signaled that he sees cannabis banking as a likely 2023 issue, though a staffer said he’d still be open to passing it through appropriations if it contained broader provisions.

Rep. Patrick McHenry (R-NC), who will serve as chairman of the House Financial Services Committee in the next Congress, is now indicating that he similarly feels that the issue will need to be decided after the lame duck. The congressman told Punchbowl News that he remains he remains opposed to SAFE Banking, but he left the door open to advancing it if that’s the will of his Republican colleagues.

“What I’ve pledged is having an open process. I told my members my view of it,” he said. “Members are able to come to their own conclusion about the bill. It’s so variable state by state.”

He said that GOP support for the legislation will be largely contingent on whether lawmakers seek to attach additional provisions like expungements and move it as part of a so-called SAFE Plus package, which Senate Majority Leader Chuck Schumer (D-NY) has been working to finalize and which other members like Brown have insisted upon.

“You had a wide, bipartisan vote in the House” when it passed SAFE Banking as a standalone, McHenry said. “So if the Senate had just taken that, you could see a substantial vote in the Senate as well. I think the mistake they made was trying to expand beyond what [Rep. Ed Perlmutter (D-CO)r] so masterfully negotiated here in the House.”

Punchbowl News reporter Brendan Pedersen spoke about the interview with McHenry during an appearance on MSNBC, repeatedly emphasizing that the marijuana banking proposal “will not be included in the omnibus” and that it will likely be addressed in the next Congress.

“This is something that has a lot of support. It’s a bipartisan support here, but it is not going to be in this,” he said, adding that McConnell and other GOP members have a “bunch of concerns.”

Some of those concerns are based on a Justice Department memo on SAFE Banking that laid out the agency’s own reservations about possible unintended consequences of the reform as it relates to issues like money laundering enforcement.

While sources say those issues have since been resolved since DOJ distributed the memo at the request of certain Republican senators—a few of whom met with Justice Department staff this month to go over the legislation—it’s apparent that McConnell and others are not satisfied.

But supporters haven’t thrown in the towel quite yet, with a senior Democratic Senate staffer telling Marijuana Moment and other outlets on Friday that Schumer has been “making a last ditch effort” to put cannabis banking reform in the omnibus, for example.

Meanwhile, law enforcement representatives and cannabis industry executives are also pitching their case to Congress to pass SAFE Banking during the lame duck session. A campaign called Law Enforcement 4 Safe has proliferated on social media in recent days to deliver that message

The posts from former and current law enforcement officials are targeted at House and Senate leadership.

“SAFE Banking gets cash off the streets and into U.S. banks and credit unions,” New Haven, Missouri Police Chief Chris Hammann said.

Matt Crecelius, business manager for St Louis County Police Association, said that “cannabis cash in banks helps officers keep communities safe & identify money laundering.”

It appears that the messaging campaign is being supported by industry stakeholders who are echoing the statements from the law enforcement community.

That includes Canopy Growth Corporation:

Cresco Labs CEO Charles Bachtell:

Trulieve CEO Kim Rivers:

And Verano:

The office of Sen. Steve Daines (R-MT), a prime SAFE Banking sponsor, separately sent out a press release on Friday that features quotes from nine Montana sheriffs expressing support for the legislation.

For example, Missoula County Sheriff TJ McDermott said that marijuana businesses that are operating on a largely cash-only basis under the status quo of federal prohibition are at “higher risk for theft, robberies, and organized crime.”

“This in turn creates a public safety risk and a risk to our deputies and surrounding law enforcement partners,” he said. “I fully support the SAFE Banking Act and Senator Daines’ efforts to pass this bill. This will lower the risk to those individuals and businesses operating in a cash only environment, which in turn creates a safer environment for our community members and law enforcement officials.”

Perlmutter has consistently made the public safety argument in support of SAFE Banking, and he said at a House Rules Committee meeting last week that the reform is one of two “outstanding matters that I’m still working on.”

With each day that passes in the lame duck, there’s growing frustration and anxiety among advocates and stakeholders, some of whom feel that this may be the last chance in the short-term to get marijuana banking enacted before Republicans reclaim the majority in the House starting on January 3.

For his part, Sen. Cory Booker (D-NJ) has pinned blame on McConnell, telling that his vocal opposition to cannabis reform has had a chilling effect of GOP members who might otherwise be amenable to passing legislation that contains SAFE Banking language.

“They’re dead set on anything in marijuana,” he said, referring to Republican leadership. “That to me is the obstacle.”

“The caucus is clearly divided but the people in power in their caucus are clearly against doing anything on marijuana,” he added.

Earlier this month, SAFE Banking sponsor Sen. Jeff Merkley (D-OR) said that he will “keep fighting” to get the reform “passed this year,” adding that “this is not the end of the road.”

“We need to make sure that legal cannabis businesses have access to the financial services they need—operating in cash is an open door to robbery and money laundering,” he said. That’s also a point highlighted in a recent analysis that looked at the trends and motivations for crimes targeting cannabis businesses in Washington State.

One senator who could make or break the final SAFE deal in appropriations is Sen. Pat Toomey (R-PA), who was among the small group of senators who met with DOJ to seek assurances that issues it raised over SAFE Banking in its earlier memo have been effectively resolved.

Meanwhile, Sen. Patty Murray (D-WA), who will serve as Senate president pro tempore for the 118th Congress, is also pushing for passage of the cannabis banking reform during the lame duck, which she discussed at a leadership briefing with Schumer last week.

Murray said that Democrats have made significant progress on a number of issues, even with the slimmest possible majority in the Senate. She said that “we are not done yet,” and there are areas of bipartisan consensus that can still advance before the end of the session, which includes “making sure our legal cannabis businesses can access credit.”

Whether SAFE or SAFE Plus makes it into the forthcoming appropriations deal is yet to be seen. But it’s far from the only cannabis reform that advocates are hoping to see included in the final package delivered to the president’s desk.

The various appropriations bills that the House and Senate considered or advanced this year contain provisions ranging from protecting state marijuana programs from federal interference to removing the congressional blockade that’s prevented Washington, D.C. to implement a system of regulated cannabis sales for adults.

Read the quotes from law enforcement that Daines circulated late last week below: 

Cascade County Sheriff Jesse Slaughter: “Regardless of how you feel about recreational marijuana, the people of Montana have spoken. Recreational marijuana is legal in our state. It’s our responsibility to make sure we have a safe way for businesses to conduct their business. Every time that I’ve seen a cash-only business exist in any community, there’s a huge element of organized crime that comes with that. Senator Daines is taking a very responsible and logical step to ensure public safety is key. What he’s doing is looking out for the citizens, but also looking out for me and my ability to protect the public as well.”

Yellowstone County Sheriff Mike Linder: “As a law enforcement officer in Montana for over three decades, I am philosophically opposed to the legalization of marijuana. Regardless, marijuana is now legal in our state, and we all need to do what we can to see that legal marijuana businesses can be operated in a safe manner. One of my main concerns when marijuana was legalized, was the fact that operators do not have access to the normal banking system to secure the proceeds from their operations. To me this meant very real increases in burglaries, thefts and robberies from these businesses due to the cash that criminals might believe to be stored on premises. Senator Daines’ Safe Banking Act will provide safe and secure bank access for the deposits of legally obtained proceeds from marijuana sales, potentially lowering the risk of these types of crimes in our communities. This in turn will reduce the amount of risk to our Montana citizens and law enforcement officers as well.”

Missoula County Sheriff TJ McDermott: “As the Sheriff of Missoula County, I value our legislative process and stand ready to uphold the laws and statutes of the State of Montana. The voters of our great state have chosen to legalize the use of Marijuana. As with any legal entity doing business in the county of Missoula, I will ensure their right to operate safely. The Secure and Fair Enforcement Banking Act (SAFE Banking Act) allows those legally operating in the State of Montana to do business safely. Operating in a strictly cash environment invites a higher risk for theft, robberies, and organized crime. This in turn creates a public safety risk and a risk to our deputies and surrounding law enforcement partners…I fully support the Safe Banking Act and Senator Daines’ efforts to pass this bill. This will lower the risk to those individuals and businesses operating in a cash only environment, which in turn creates a safer environment for our community members and law enforcement officials.”

Lincoln County Sheriff Darren Short: “As sheriff it concerns me that businesses have such a large amount of cash on hand, which is clearly a liability and a public safety issue. I also believe that any all-cash business is going to be ripe for fraud, so it’s an accounting problem as I see it too. As far as marijuana legalization goes, the voters of Montana made that decision and now it’s our role to make it safe and make it work. I’m happy to support the SAFE Banking Act.”

Butte-Silver Bow Sheriff Ed Lester: “If we are going to allow the sale and use of Marijuana, it only makes sense to allow the Marijuana businesses to use standard banking practices. If businesses can secure the cash they take in, the motive for robberies, burglaries, and other crime related to these businesses is reduced. The Safe Banking Act should make the business owners, customers, and our communities safer.”

Powell County Sheriff Gavin Roselles: “While I have not read the entire language of the proposed bill, I agree that its passage will increase the safety of the legal businesses who are operating on a cash only basis. In the example of legal marijuana businesses, I am concerned that having large amounts of cash on hand will increase the risk of violent crimes directed toward the businesses and their employees. The passage of the SAFE Banking act would allow legal marijuana businesses to conduct transactions with a federally insured financial institution and reduce the risk of crimes these businesses are currently experiencing. I support Senator Daines efforts to pass the SAFE Banking Act.”

Ravalli County Sheriff Steve Holton: “Thank you for your efforts regarding the Secure and Fair Enforcement (SAFE) Banking Act. With the legalization of marijuana cultivation, sale, and possession in Montana, we have created a dangerous situation involving legal but cash only businesses. The dispensaries in Ravalli County are in the position of holding large amounts of cash which increases the risk of robberies, burglaries, and thefts by sometimes violent criminals. The opportunity to target these legal businesses and their employees threatens public safety. Importantly, the apprehension of the suspects creates a further risk for our law enforcement officers. As Ravalli County Sheriff, I whole heartedly support the SAFE Banking Act and your efforts to pass legislation that will make our Montana communities safer.”

Carbon County Sheriff Josh McQuillan: “While I am opposed to the legalization of recreational marijuana use, it is now here and we need to deal with it the best we can. Senator Daines’ SAFE Banking Act would help reduce the inevitable criminal activity that comes with these cash-only businesses.”

Rosebud County Sheriff Allen Fulton: “Like most law enforcement officers throughout Montana, I am against the legalization of recreational marijuana use. However, it is now here in Rosebud County after Montanans voted overwhelmingly in its favor, and we’ve got to address the public safety concerns that these all-cash businesses present. By allowing these legally operating businesses to access the banking system, we expect to see less burglaries and violent crime within these facilities.”

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