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Marijuana Banking Bill Reintroduced In Senate, With Nearly A Third Of The Chamber Signed On

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A bill to protect banks that service state-legal marijuana businesses from being penalized by federal regulators has been reintroduced in the Senate—with nearly a third of the chamber as cosponsors. It’s a development that takes on a new light now that Democrats are back in control the chamber.

This comes days after the Secure and Fair Enforcement (SAFE) Banking Act was refiled in the House, where it passed with bipartisan support as a standalone bill in 2019 and also as part of two COVID-19 relief bills.

The Senate version is being sponsored by Sens. Jeff Merkley (D-OR) and Steve Daines (R-MT), and it currently has 27 other cosponsors. In the House, the legislation has more than 100 members who’ve signed on as cosponsors.

The SAFE Banking Act 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.

“No one working in a store or behind a register should have to worry about experiencing a traumatic robbery at any moment,” Merkley said in a press release. “That means we can’t keep forcing legal cannabis businesses to operate entirely in cash—a nonsensical rule that is an open invitation to robbery and money laundering. Let’s make 2021 the year that we get this bill signed into law so we can ensure that all legal cannabis businesses have access to the financial services they need to help keep their employees safe.”

Daines added that “Montana businesses shouldn’t have to operate in all cash—they should have a safe way to conduct business.”

“My bipartisan bill will provide needed certainty for legal Montana cannabis businesses and give them the ability to freely use banks, credit unions and other financial institutions without the fear of punishment,” he said. “This in turn will help increase public safety, reduce crime, support Montana small businesses, create jobs and boost local economies. A win-win for all.”

With Democrats now in control of both chambers of Congress and the White House, industry stakeholders are optimistic that the legislation stands a solid chance of becoming law this year.

The Senate represented the bill’s most significant obstacle last session under GOP control.

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 2 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.

Sen. Sherrod Brown (D-OH), who took the top seat in that panel after Democrats secured a majority in the Senate, told reporters in February that he’s “willing” to move the cannabis banking bill, “but with it needs to come sentencing reform.”

“I don’t think we move on legalization the way that Colorado and some other states want us to, unless we really look more seriously at who’s in prison for how long for those kinds of offenses and we don’t do one without the other,” he said.

The committee’s ranking member, Sen. Pat Toomey (R-PA), said in November that “I am open to working with my colleagues on how we could enable businesses that are operating legally in their respective states to be able to have ordinary banking services” and that “I think that’s something we should work on.

Beside the chief sponsors, here’s who’s signed on to this latest version so far: Sens. Kyrsten Sinema (D-AZ), Ed Markey (D-MA), Alex Padilla (D-CA), Patrick Leahy (D-VT), Dick Durbin (D-IL), Ron Wyden (D-OR), Mazie Hirono (D-HI), Tina Smith (D-MN), Angus King (I-ME), Catherine Cortez Masto (D-NV), Michael Bennet (D-CO), Bob Menendez (D-NJ), Jon Tester (D-MT), Jacky Rosen (D-NV), Kevin Cramer (R-ND), Dan Sullivan (R-AK), Kirsten Gillibrand (D-NY), Elizabeth Warren (D-MA), Chris Murphy (D-CT), Gary Peters (D-MI), Bernie Sanders (I-VT), Brian Schatz (D-HI), Patty Murray (D-WA), Amy Klobuchar (D-MN), Rand Paul (R-KY), Bill Cassidy (R-LA) and Cynthia Lummis (R-WY).

At the end of the last Congress, the prior version of the SAFE Banking Act had garnered a total of 35 senators signed on, including now-Vice President Kamala Harris.

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 on Friday 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.”

Meanwhile, congressional lawmakers are simultaneously preparing to introduce legislation to end federal cannabis prohibition.

Senate Majority Leader Chuck Schumer (D-NY), Senate Finance Chairman Ron Wyden (D-OR) and Sen. Cory Booker (D-NJ) are in the process of crafting a legalization bill, and they’ve already met with advocates to get feedback on how best to approach the policy change. Wyden is the only member of the trio to be listed as an original cosponsor of the new SAFE Banking Act.

Schumer has said lawmakers must pursue broad justice-focused cannabis legislation and not stop at the industry-favored financial reform.

“Congress should not enact banking reform alone and think the job is done,” he tweeted in 2019. “We need decriminalization at the federal level, criminal justice reform, and investment in opportunity for minority & women-owned small businesses.”

It’s not clear if those views indicate that he opposes moving the SAFE Banking act ahead of a bill to end prohibition, or if he would allow it to come to the floor with the understanding the broader reform would follow.

House Judiciary Chairman Jerrold Nadler (D-NY) also recently said that he would be reintroducing the Marijuana Opportunity, Reinvestment and Expungement (MORE) Act, which would federally deschedule cannabis and contains a number of social equity provisions. That proposal passed in the House last year.

“With new Senate leadership now firmly in favor of cannabis policy reform, we are optimistic that this narrowly tailored—but absolutely necessary—legislation will be allowed to progress through the hearing process without delay,” Aaron Smith, co-founder and chief executive officer of the National Cannabis Industry Association, said in a press release. “This bill is a meaningful first step that will have immediate benefits in terms of safety, transparency, fairness, and much-needed economic opportunities while Congress continues working toward more comprehensive solutions to end prohibition and sensibly regulate cannabis.”

The American Bankers Association (ABA), for its part, says it’s important to advance marijuana banking reform. While the group doesn’t have a formal position on broader reform, it said in a letter to the House SAFE Banking Act sponsors last week that the cannabis financial services issue “has become a challenge for so many of our nation’s communities and the banks that serve them.”

“The bipartisan SAFE Banking Act would be an important step toward enabling financial services for cannabis-related businesses,” ABA wrote. “The SAFE Banking Act is not a cure all for the cannabis banking challenge, but it is a measure that helps clarify many issues for the banking industry and regulators.”

“Providing a mechanism for the cannabis industry to access the banking system would help those communities reduce cash-motivated crimes, increase the efficiency of tax collections, and improve the financial transparency of the cannabis industry,” the group said.

The office of Rep. Ed Perlmutter, chief sponsor of the House version of the bill, said the legislation is also being supported by the Credit Union National Association, Independent Community Bankers of America, National Association of Realtors, United Food and Commercial Workers and other groups.

As more states have legalized marijuana for recreational or medical use, financial institutions have relied on 2014 guidance from the Financial Crimes Enforcement Network (FinCEN) that requires them to submit suspicious activity reports if they elect to provide financial services to cannabis businesses. In the years since, the number of depositories taking on marijuana clients has gradually increased—until a more recent downward trend that now seems to be stabilizing.

The head of the Internal Revenue Service (IRS) told Congress last month that the federal agency would “prefer” for state-legal cannabis firms to be able to pay taxes electronically, as the current cash-based system under prohibition is onerous and presents risks to workers.

Former Treasury Secretary Steven Mnuchin similarly said in 2019 that he’d like to see Congress approve legislation resolving the cannabis banking issue, and he pointed to the fact that IRS has had to build “cash rooms” to deposit taxes from those businesses as an example of the problem.

Read the full test of the new Senate SAFE Banking Act below:

Senate SAFE Banking Act by Marijuana Moment

Colorado Governor Signs Marijuana Social Equity Bill As Lawmakers Vote To Increase Possession Limit

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Business

New House Bills Would Make Cannabis Businesses Eligible For Federal Small-Business Aid

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Lawmakers in the U.S. House of Representatives have introduced three new bills to make state-legal marijuana businesses eligible for federal small business services, including loans, disaster relief and grant programs.

The package of legislation is aimed at establishing parity for cannabis businesses, which are currently prohibited from receiving federal aid due to marijuana still being classified as a Schedule I controlled substance. The country’s legal cannabis industry nevertheless now supports nearly 320,000 full-time jobs in the U.S., according to industry estimates.

The measures are largely similar to legislation introduced by the lawmakers in 2019, with some small changes.

One bill, sponsored by House Small Business Committee Chairwoman Nydia Velázquez (D-NY), would allow marijuana businesses to access resources from the federal Small Business Administration (SBA). The Ensuring Safe Capital Access for All Small Businesses Act of 2021, which had not been assigned a bill number as of Tuesday afternoon, would expand access to services such as microloans, disaster assistance and the agency’s loan guaranty program.

“With more and more states pursuing legalization, including my home state of New York, there are a growing number of legitimate small businesses that are excluded from critical SBA programs,” Velázquez said in a statement, noting that much of the cannabis industry consists of small businesses.

Compared to Velázquez’s 2019 bill, the new version adds clauses meant to expand the availability of services. While the 2019 bill applied to SBA itself, provisions in the new legislation also prevent SBA intermediaries, private lenders and state and local development companies from declining to work with businesses simply because of their marijuana-related work.

Another new section deals with debentures—certain unsecured loan certificates—and clarifies that SBA may not decline to purchase or guarantee a debenture just because of a business’s involvement in cannabis. Nor can other small business investment companies decline to provide assistance to the cannabis sector.

“This legislation will spark growth by extending affordable capital to small firms in the cannabis space,” she continued. “Simultaneously, the bill acknowledges the structural disadvantages facing entrepreneurs of color and seeks to level the playing field.”

Another newly refiled measure, H.R. 2649, sponsored by Rep. Dwight Evans (D-PA), would establish a U.S. Small Business Administration (SBA) grant program to provide funding to state and local governments to help them navigate the licensing process for cannabis businesses. The bill, which also removes marijuana from the Controlled Substances Act, specifies that the grant money should be used to benefit communities disproportionately impacted by the drug war.

“My bill would act as a poverty-buster and help homegrown small businesses, which are the backbone of our economy and our neighborhoods. We need to make sure that the booming legal cannabis industry does not become consolidated in the hands of a few big companies,” Evans said.


Marijuana Moment is already tracking more than 1,000 cannabis, psychedelics and drug policy bills in state legislatures and Congress this year. Patreon supporters pledging at least $25/month get access to our interactive maps, charts and hearing calendar so they don’t miss any developments.

Learn more about our marijuana bill tracker and become a supporter on Patreon to get access.

A third bill, H.R. 2649, from Rep. Jared Golden (D-ME), would prohibit SBA partners that provide guidance and training services from denying help to businesses solely because of involvement in cannabis. The changes would affect providers such as SBA’s Small Business Development Centers, Women’s Business Centers and the Veterans Business Outreach Centers, among others.

“Our continued economic recovery depends on the health of American small businesses of all kinds. Especially in this environment, no Maine small business owner should be turned away from crucial SBA programs that could help them create jobs and lift up the economy,” said Rep. Golden. “My bill would help address this problem by providing small business owners directly or indirectly associated with the cannabis industry with access to the services and resources they need to get their small businesses off the ground and grow.”

Meanwhile, federal lawmakers have been making headway on other cannabis-related proposals. The House passed a cannabis banking bill on Monday, and broader legislation to legalize cannabis at the federal level is expected to be introduced soon.

The banking legislation would ensure that financial institutions can 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. The full House passed the bill on a 321–101 vote.

“Even if you are opposed to the legalization of cannabis, you should support this bill,” sponsor Rep. Ed Perlmutter (D-CO) said on the House floor. “The fact is that people in states and localities across the country are voting to approve some level of cannabis use, and we need these cannabis businesses and employees to have access to checking accounts, payroll accounts, lines of credit, credit cards and more.

Other Democrats, including Senate Majority Leader Chuck Schumer (D-NY), Senate Finance Committee Chairman Ron Wyden (D-OR) and Sen. Cory Booker (D-NJ) are working on legislation that would end federal cannabis prohibition completely.

Schumer said last week that the long-awaited proposal would be introduced “shortly” and placed on the floor “soon.” Schumer has so far declined to discuss the bill’s specifics, though he’s stressed that it will prioritize small businesses and people most historically impacted by the drug war.

In an interview with Marijuana Moment this week, Schumer worried that passage of the House banking bill could actually undermine broader congressional cannabis reform this year.

On the House side, Judiciary Chairman Jerrold Nadler (D-NY) said recently that he plans to reintroduced his own legalization bill, the Marijuana Opportunity, Reinvestment and Expungement (MORE) Act, which cleared the House in a landmark vote last year but did not advance in GOP-controlled the Senate.

Meanwhile, support for legalization among U.S. voters continues to grow. More than 9 in 10 Americans (91 percent) now support legalizing cannabis for either medical or adult use, according to a Pew Research Center poll released on Friday. Sixty percent of respondents said that cannabis should be legal for both medical and adult use. Thirty-one percent said it should be legalized for therapeutic purposes only, while just eight percent said it should continue to be criminalized across the board.

A majority of those in every age, race and political demographic included in the poll said they feel marijuana should be legal in some form, although many Republicans remain wary of adult-use legalization. Seventy-two percent of Democrats favored both medical and adult-use legalization compared to only 47 percent of Republicans.

Among the minority in opposition to federal legalization: President Joe Biden (D). White House Press Secretary Jen Psaki said last month that the president’s position on the issue “has not changed,” meaning he still opposes the reform. on Tuesday, Psaki refused to say whether Biden would sign or veto a cannabis legalization bill if passed by Congress.

The president instead backs modestly rescheduling the plant, decriminalizing possession, legalizing medical cannabis, expunging prior marijuana records and letting states set their own policies.

Read the full text of the new legislation below:

Ensuring Safe Capital Access for All Small Businesses Act of 2021 by Marijuana Moment on Scribd

Ensuring Access to Counseli… by Marijuana Moment

Homegrown Act by Marijuana Moment on Scribd

Schumer Worries Senate Marijuana Banking Vote Could Undermine Broader Legalization Push

 

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Politics

Biden Won’t Commit To Sign Marijuana Bill If Passed By Congress, Press Secretary Says

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White House Press Secretary Jen Psaki on Tuesday declined to say whether President Joe Biden would sign or veto a bill to federally legalize marijuana if it arrives on his desk, noting that his cannabis policy position is at odds with broader proposals that congressional Democratic leaders are working on.

She was also asked about his stance on marijuana banking reform, the disconnect between public opinion favoring legalization and the president’s opposition and whether Biden plans to revisit clemency applications for those facing federal sentences over cannabis.

The noncommittal response to the legalization question comes on the unofficial cannabis holiday 4/20—a day that has seen a wide range of politicians, including Senate Majority Leader Chuck Schumer (D-NY), voice support for comprehensive marijuana reform.

Psaki was pressed on the Senate leader’s remarks and asked whether Biden would support legislation to end federal cannabis prohibition if Congress approved it.

“The president supports leaving decisions regarding legalization for recreational use up to the states, rescheduling cannabis as a Schedule II drug so researchers can study its positive and negative impacts and, at the federal level, he supports decriminalizing marijuana use and automatically expunging any prior criminal records,” she said. “He also supports legalizing medicinal marijuana so that’s his point of view on the issue.”

Biden’s positions to that end are well known, but an outstanding question has been whether his opposition to adult-use legalization is so strong that he would reject a reform proposal such as those currently being drafted in the House and Senate.

Asked directly what action the president would take if a federal legalization bill was sent to his desk, Psaki signaled that he wouldn’t be inclined to sign it, stating “I just have outlined what his position is, which isn’t the same as what the House and Senate have proposed, but they have not yet passed a bill.”

The reporter followed up to ask about a separate cannabis pledge Biden made as a presidential candidate, when he said people incarcerated in federal prisons over non-violent marijuana offenses should be released.

Psaki said that would be addressed if cannabis was rescheduled to Schedule II—a dubious claim given that there are still serious penalties for offenses involving substances in that category as well. She also didn’t provide any insight into whether the president is proactively pushing for the modest scheduling change.

Later in the briefing, the press secretary was asked where Biden stands on legislation to protect banks that service state-legal marijuana businesses from being penalized by federal regulators. The House approved the Secure and Fair Enforcement (SAFE) Banking Act along bipartisan lines on Monday.

She said it was a “good question,” but she wasn’t sure and told the reporter she would follow up with a response later.

When pushed on Biden’s opposition to the legalization in the face of mounting, majority support among Americans, Psaki said that while he’s in favor of decriminalization and legalizing medical marijuana, he wants more research on the “positive and negative effects” of adult-use legalization.

“He’ll look at the research once that’s concluded,” she said. “Of course we understand the movement that’s happening toward it. I’m speaking for what his position is and what long, consistently has been his position. He wants to decriminalize, but again, he’ll look at the research of the positive and negative impacts.”

The press conference ended with a final question about cannabis policy—specifically whether the Biden administration plans to revisit requests for clemency for federal cannabis convictions. The reporter cited the case of Luke Scarmazzo, who was sentenced to 22 years in federal prison for operating a state-legal medical cannabis business in California, as an example.

“Given, as you’ve noted in the briefing, the president’s support for decriminalization, support for expunging exactly these types of offenses, are there any plans to revisit some of those bids for clemency?” the reporter asked.

“Well, I would just take it as an opportunity to reiterate that the president supports legalizing medicinal marijuana,” Psaki said. “It sounds like this would have been applicable in this case, and of course decriminalizing marijuana use and automatically expunging any prior criminal records. In terms of individual cases, I can’t get ahead of those obviously.”

These question come, of course, on 4/20. But they also come at a time when there’s a concerted push in both chambers of Congress to seize the opportunity they have with Democratic control to pass legalization legislation.

Schumer, Senate Finance Committee Chairman Ron Wyden (D-OR) and Sen. Cory Booker (D-NJ) have been working on a bill on their side. The majority leader told Marijuana Moment on Monday that he’s working to push the president in a pro-legalization direction as they draft the measure.

Schumer said last week that the legislation will be introduced and placed on the floor “soon.”

On the House side, Judiciary Chairman Jerrold Nadler (D-NY) said recently that he plans to reintroduced his legalization 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.

Schumer Worries Senate Marijuana Banking Vote Could Undermine Broader Legalization Push

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Culture

How Politicians Are Celebrating The Marijuana Holiday 4/20 This Year

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The country has come a long way since the days of politicians dismissing or shying away from marijuana issues. And a good example of that shift is the ever-growing number of lawmakers who are leaning into the cannabis holiday 4/20 with calls for reform.

For example, to kick of Tuesday’s Senate session, Majority Leader Chuck Schumer (D-NY) spoke on the floor about the need to end federal marijuana prohibition, saying that “hopefully the next time this unofficial holiday 4/20 rolls around, our country will have made progress.”

Then there are the tweets—so many tweets—from state and congressional lawmakers, office seekers and regulators marking the occasion. It’s become a theme each year, and as more states pursue legalization, it seems more elected officials have grown comfortable embracing the holiday in their own ways.

Here’s what politicians are saying about cannabis this 4/20: 

Members of Congress

Congressional candidates

State officials and parties

Local officials

Former federal officials

International lawmakers

Meanwhile, dozens of brands and organizations are also celebrating 4/20 with a variety of promotions, events and calls to action.

Schumer Worries Senate Marijuana Banking Vote Could Undermine Broader Legalization Push

Photo courtesy of Brian Shamblen.

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