Business
Senators Vote To Block Marijuana Banking Amendment
A powerful U.S. Senate panel has moved to block an amendment to let marijuana businesses store their profits in banks.
In a 21 – 10 vote, the Senate Appropriations Committee tabled an amendment on Thursday that would have shielded financial institutions that open accounts for cannabis businesses that are complying with state laws from being punished by federal regulatory authorities.
Current policy, which forces many marijuana businesses to operate on an all-cash basis, is “a big problem because it’s great for organized crime, it’s great for money laundering, it’s great for theft and larceny, it’s great for cheating on taxes, it’s great for cheating on your payroll,” Sen. Jeff Merkley (D-OR), the sponsor of the measure, said in a brief debate before the vote. “We’re really facilitating crime by not enabling the banking industry to provide basic services.”
Last week, the House Appropriations Committee defeated a similar cannabis banking proposal.
Several Democratic members of the Senate panel who said they otherwise support the ability of marijuana businesses in a growing number of states to access financial services objected on procedural grounds to the measure, which Merkley was seeking to attach to the Fiscal Year 2019 Financial Services and General Government funding bill.
Sen. Patrick Leahy (D-VT), for example, said that he wanted to keep spending legislation “free of new controversial policy riders” and that a more appropriate forum would be an authorizing committee that sets banking laws.
Nonetheless, Leahy himself has sponsored appropriations amendments to prevent the Justice Department from interfering with state medical cannabis laws instead of insisting that those measures go through the authorizing Judiciary Committee.
Also voicing opposition to the move were Sens. Christopher Coons (D-DE) and Jon Tester (D-MT).
“I’ve supported it in the past and I think it’s different today,” Tester said. “It adds a level of confusion to the folks who are out there doing business,” adding that it would give a “false hope” to cannabis providers because it only deals with the Department of the Treasury and not the Justice Department.
“Do I think these businesses ought to be able to bank?” he said. “Absolutely.”
The same committee approved similar amendments in 2015 and 2016 by votes of 16 to 14.
Sen. James Lankford (R-OK), who is a vocal legalization opponent, also spoke up. “This amendment would [make] a confusing situation for banks and pot shops around the country…more confusing,” he said.
Legalization advocates were upset by the committee’s move.
“The Senate Appropriations Committee chose to bury its head in the sand rather than make it easier for licensed and regulated marijuana businesses to operate safely, transparently or effectively,” Justin Strekal, political director for NORML, said in an interview. “It’s absurd.”
Don Murphy of the Marijuana Policy Project added, “Today was a victory for the drug cartels and anyone else who benefits from billions of dollars of unaccountable, untraceable and unbankable cash.”
Ongoing federal marijuana prohibition and related money laundering laws have made many banks reluctant to work with cannabis businesses.
Nonetheless, new Treasury Department data first reported last week shows that a steadily increasing number of financial institutions have been opening accounts for marijuana growers, processors, retailers and related outfits even as Attorney General Jeff Sessions makes anti-cannabis moves and comments.
The House of Representatives passed a cannabis banking amendment in 2014 by a vote of 231 to 192, but the provision was not included in final spending legislation that year. Congressional Republican leadership has since blocked floor votes on cannabis measures.
Several Trump administration officials have indicated they would like to see a resolution to the issue.
Federal Reserve Chairman Jerome Powell said last week that the gap between state and federal cannabis laws “puts federally chartered banks in a very difficult situation.”
“It would great if that could be clarified,” he said.
Treasury Sec. Steven Mnuchin has implied in several appearances before congressional committees that he wants marijuana businesses to be able to access banks.
“I assure you that we don’t want bags of cash,” he testified before a House committee in February. “We do want to find a solution to make sure that businesses that have large access to cash have a way to get them into a depository institution for it to be safe.”
In another hearing he said that fixing cannabis banking issues is at the “top of the list” of his department’s concerns.
And Federal Deposit Insurance Corporation Chairwoman said on Tuesday that she’s asked staff to think about how to address marijuana banking issues, but that for now the agency’s hands are “somewhat tied.”
Despite the defeat of the banking amendments in House and Senate committees this month, there has been a recent string of other developments demonstrating marijuana’s political momentum.
Last week, the Texas Republican Party voted to adopt platform planks endorsing marijuana decriminalization, medical cannabis, industrial hemp and federal reclassification of the drug.
Earlier this month, President Trump voiced support for bipartisan congressional legislation that would allow states to enact marijuana legalization laws without federal interference. U.S. Senate Majority Leader Mitch McConnell (R-KY) is leading the charge for hemp legalization, with the support of Minority Leader Chuck Schumer (D-NY).
See the full text of the marijuana banking amendment as considered by senators below:
“None of the funds made available in this Act may be used, with respect to the States of Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, and Wyoming, or with respect to the District of Columbia, Puerto Rico, or Guam, to penalize a financial institution solely because the institution provides financial services to an entity that is a manufacturer, producer, or a person that participates in any business or organized activity that involves handling marijuana or marijuana products and engages in such activity pursuant to a law established by a State or a unit of local government.”
See the full committee roll call vote on tabling the amendment (an Aye vote is to block the measure from advancing):
Republicans
- Mitch McConnell, Kentucky – Aye by proxy
- Lamar Alexander, Tennessee – Aye
- Susan Collins, Maine – Aye
- Lisa Murkowski, Alaska – Aye
- Lindsey Graham, South Carolina – Aye by proxy
- Roy Blunt, Missouri – Aye
- Jerry Moran, Kansas – Aye by proxy
- John Hoeven, North Dakota – Aye
- John Boozman, Arkansas – Aye
- Shelly Moore Capito, West Virginia – Aye
- James Lankford, Oklahoma – Aye
- Steve Daines, Montana – No
- John Kennedy, Louisiana – Aye
- Marco Rubio, Florida – Aye by proxy
- Cindy Hyde-Smith, Mississippi – Aye
- Richard Shelby, Alabama, Chairman – Aye
Democrats
- Patrick Leahy, Vermont, Ranking Member – Aye
- Patty Murray, Washington – No by proxy
- Dianne Feinstein, California – No by proxy
- Dick Durbin, Illinois – Aye by proxy
- Jack Reed, Rhode Island – Aye by proxy
- Jon Tester, Montana – Aye by proxy
- Tom Udall, New Mexico – No
- Jeanne Shaheen, New Hampshire – No by proxy
- Jeff Merkley, Oregon – No
- Chris Coons, Delaware – Aye
- Brian Schatz, Hawaii – No by proxy
- Tammy Baldwin, Wisconsin – No
- Christopher Murphy, Connecticut – Aye by proxy
- Joe Manchin, West Virginia – No
- Chris Van Hollen, Maryland – No
This piece was first published by Forbes.
