When it comes to the fate of marijuana banking legislation in the Senate, there are more questions than answers at this stage, with the chairman of a key committee walking back his insistence that the bill to be tied to sentencing reform. Nonetheless, the senator is saying he’s still in talks with leadership about incorporating it into a broader cannabis decriminalization proposal.
On Tuesday, Senate Banking Committee Chairman Sherrod Brown (D-OH) was pressed on next steps for the Secure And Fair Enforcement (SAFE) Banking Act, which cleared the House on a bipartisan vote last week. Specifically, he was asked about the possibility of attaching language to provide protections for banks that work with state-legal cannabis businesses to a more comprehensive piece of marijuana legislation.
Brown told MarketWatch that he’s talking to Senate Majority Leader Chuck Schumer (D-NY) about the issue, but it’s “not clear what we’re going to do there.”
“There is interest certainly from both parties. There is interest in sentencing reform as part of it,” he said. “There is some interest in decriminalization generally, not legalization.”
Schumer, who said he will put a bill to end federal prohibition on the floor “soon,” recently told Marijuana Moment that he’s not interested in passing the banking legislation as a standalone bill before the chamber advances his proposal. Doing so could undermine support for his bill, he suggested.
“We will hope to include things that deal with banking and finance” in the legalization measure, Schumer said.
Brown, for his part, has made clear that he’s not eager to move on the SAFE Banking Act, citing reservations about certain provisions. “I think we need to look at a number of things,” he said in an earlier interview, adding that “I will look at this seriously. We’re not ready to move on it.”
One thing the chairman previously said he wanted to do was tie the cannabis banking legislation to sentencing reform. That’s fine by Rep. Ed Perlmutter (D-CO), sponsor of the House version of the SAFE Banking Act who said he’s fine with making it a “bigger bill,” but now it seems Brown is being open to dropping that condition.
“I’m pretty open on it. It’s not something I’ve done a lot of work on yet,” he said last week. “I know there’s committee interest in both sides.”
As it stands, the banking legislation has 34 cosponsors in the Senate, plus its sponsor Sen. Jeff Merkley (D-OR), which means more than a third of the chamber is already formally signed on.
The vote in the House last week marked the fourth time the chamber has approved the SAFE Banking Act. Lawmakers passed it as a standalone bill in 2019 and then twice more as part of coronavirus relief legislation. At no point did the measure move forward in the Senate under Republican control last session, however.
The legislation would ensure that financial institutions could take on cannabis business clients without facing federal penalties. Fear of sanctions has kept many banks and credit unions from working with the industry, forcing marijuana firms to operate on a cash basis that makes them targets of crime and creates complications for financial regulators.
After it passed the House last Congress, advocates and stakeholders closely watched for any action to come out of the Senate Banking Committee, where it was referred after being transmitted to the chamber. But then-Chairman Mike Crapo (R-ID) did not hold a hearing on the proposal, despite talk of negotiations taking place regarding certain provisions.
Crapo said he opposed the reform proposal, but he signaled that he might be more amenable if it included certain provisions viewed as untenable to the industry, including a two percent THC potency limit on products in order for cannabis businesses to qualify to access financial services as well as blocking banking services for operators that sell high-potency vaping devices or edibles that could appeal to children.
When legislative leaders announced that the SAFE Banking Act was getting a House vote in 2019, there was pushback from some advocates who felt that Congress should have prioritized comprehensive reform to legalize marijuana and promote social equity, rather than start with a measure viewed as primarily friendly to industry interests.
Rep. Earl Blumenauer (D-OR), co-chair of the Congressional Cannabis Caucus and an original cosponsor of the bill, said last month that the plan is to pass the banking reform first this session because it “is a public safety crisis now,” and it’s “distinct—as we’ve heard from some of my colleagues—distinct from how they feel about comprehensive reform.”
As Schumer works with Senate Finance Committee Chairman Ron Wyden (D-OR) and Sen. Cory Booker (D-NJ) on legislation to federally legalize cannabis, House Judiciary Chairman Jerrold Nadler (D-NY) said recently that he plans to reintroduce his reform bill, the Marijuana Opportunity, Reinvestment and Expungement (MORE) Act, which cleared the chamber last year but did not advance in the Senate under GOP control.