The sponsor of a bipartisan bill that would resolve banking issues in the marijuana industry is preparing to amend the legislation as a planned House floor vote approaches in order to bolster its appeal among GOP members.
The bill, which currently has 206 cosponsors, including 26 Republicans, was revised to clarify that banking protections apply to hemp and CBD businesses and also shields certain businesses such as firearms dealers from being targeted by financial regulators, as was the case under a 2013 Justice Department initiative that flagged various industries as higher risk for fraud and money laundering.
Other changes include an expansion of the definition of ancillary businesses working with marijuana firms that would be protected, extending and clarifying protections to federal home loan banks and insurers and language specifying that financial regulators wouldn’t be uniquely restricted in their supervisory roles over the cannabis industry.
The text of the updated bill as prepared for floor action next week was obtained by Marijuana Moment.
The provisions are meant to entice conservative members who might have been wary of approving a bill that is narrowly tailored to help the cannabis industry.
A new section of the bill notes that hemp was federally legalized under the 2018 Farm Bill yet “some hemp businesses (including producers, manufacturers, and retailers) continue to have difficulty gaining access to banking products and services” and that “businesses involved in the sale of hemp-derived cannabidiol (‘CBD’) products are particularly affected, due to confusion about their legal status.”
In order to address that problem, the legislation stipulates that financial regulators must issue guidance “confirming the legality of hemp, hemp-derived CBD products, and other hemp-derived cannabinoid products, and the legality of engaging in financial services with businesses selling hemp, hemp-derived CBD products, and other hemp-derived cannabinoid products, after the enactment of the Agriculture Improvement Act of 2018.”
Regulators must also “provide recommended best practices for financial institutions to follow when providing financial services and merchant processing services to businesses involved in the sale of hemp, hemp-derived CBD products, and other hemp-derived cannabinoid products.”
The section that seems to aim to prevent actions such as the controversial Justice Department initiative known as “Operation Choke Point” targeting the gun industry states that federal banking agencies “may not formally or informally request or order a depository institution to terminate a specific customer account or group of customer accounts or to otherwise restrict or discourage a depository institution from entering into or maintaining a banking relationship with a specific customer or group of customers” unless there’s a valid reason.
Getting more Republicans on board will be critical as House leaders plan to advance the Secure and Fair Enforcement (SAFE) Banking Act through an expedited process known as suspension of the rules, which requires two-thirds of the chamber of pass and does not provide opportunities for floor amendments.
The expanded version of the legislation will also likely fare better in the Republican-controlled Senate if it clears the House. Senate Banking Chair Mike Crapo (R-ID) said earlier this month that his panel will also hold a vote on the banking issue, ideally by the year’s end, but he didn’t commit specifically to a vote on the SAFE Banking Act as currently drafted.
Senate Majority Leader Mitch McConnell (R-KY), who’s made clear that he’s no fan of marijuana, could presumably feel better about brining the bill to his chamber’s floor given his long-standing advocacy for hemp and CBD issues.
It’s not just the GOP that the bill’s supporters have to consider, however. While Democrats have capitalized on popular marijuana reform issues, the banking legislation has recently been a topic of contention among progressive advocates and lawmakers.
After House Majority Leader Steny Hoyer (D-MD) informed the Democratic Caucus of his intent to bring the bill to a floor vote by the end of the month, some groups such as the ACLU, Human Rights Watch and Drug Policy Alliance signed a letter urging leadership to delay a vote until comprehensive legalization legislation that addresses social equity is passed.
Rep. Alexandria Ocasio-Cortez (D-NY) is a prominent example of a lawmaker who indicated she might not vote in favor of banking legislation without Congress first tackling the racial injustices of cannabis prohibition, with a staffer telling Marijuana Moment on Thursday that the congresswoman “feels strongly that addressing racial justice should be the first priority.”
Marijuana Moment spoke to a number of lawmakers about the internal Democratic caucus debate on Wednesday. House Financial Services Chair Maxine Waters (D-CA), whose panel passed the bill in March, said that she understands the groups’ perspective but that the issue is that Judiciary Chair Jerrold Nadler (D-NY) has yet to hold a vote on his more wide-ranging legalization bill.
Rep. Ed Perlmutter (D-CO), sponsor of the SAFE Banking Act, made a similar point and stressed the need for action on any cannabis reform legislation regardless of its scale. Revising his bill signals that he’s not letting up on that goal, and it also bodes well for the prospects of getting a vote next week.
A vote has yet to be scheduled but a key signal will be whether the SAFE Banking Act is listed on a weekly floor schedule that Hoyer’s office will release on Friday.
Marijuana Moment’s Patreon supporters can read the full text of the revised banking bill below:
Trade Associations And Civil Rights Groups Send Mixed Messages On Marijuana Banking To Senate
A coalition of trade associations sent a letter to Senate Banking Committee leadership on Thursday, urging a vote on legislation to protect financial institutions that service state-legal marijuana businesses.
But those senators are also feeling pressure from leading civil rights groups like the ACLU and Human Rights Watch, which sent an earlier letter insisting that they not allow cannabis banking to detract from more comprehensive reform that addresses social equity.
The organizations involved in the latest letter—including the American Bankers Association and Credit Union National Association—said that advancing the Secure and Fair Enforcement (SAFE) Banking Act or similar legislation is pivotal to ensuring that stakeholders receive needed clarity and are shielded from being penalized by federal regulators.
The letter, addressed to Banking Chair Mike Crapo (R-ID) and Ranking Member Sherrod Brown (D-OH), emphasized the bipartisan nature of the House passage of the bill in September and the growing movement at the state level to legalize cannabis for medical or recreational purposes.
“Our organizations support an initial legislative step that allows the legal cannabis industry into the banking system,” the groups, which also include the Council of Insurance Agents and Brokers, International Council of Shopping Centers and National Association of REALTORS, wrote. “Ultimately, protecting law-abiding financial institutions and ancillary businesses from their currently untenable position and addressing increasing public safety concerns.”
As more states reform their marijuana laws, however, “distribution, sale, possession, research, transaction, housing, employment, and a broader landscape of cannabis is becoming increasingly problematic” for stakeholders under federal prohibition.
“Ultimately, this creates more legal and security concerns that impact the operations and safety of businesses and consumers,” they said. “Finally, the lack of an available safe harbor for cannabis will continue to challenge the full adoption and deployment of the legal hemp and CBD products market in the U.S. due to the inextricable link between hemp and cannabis.”
“To resolve this, we urge the Committee to vote on the SAFE Banking Act or similar measures. Such measures are meant to create a safe harbor for depository institutions that provide a financial product or service to businesses in a state permitting the use of cannabis. A safe harbor will enable law enforcement and states to effectively monitor and regulate businesses while simultaneously bringing billions into the regulated banking sector.”
12 groups including ABA just wrote @MikeCrapo @SenSherrodBrown @senatemajldr @SenSchumer urging a vote on the #SAFEBanking Act. It's time to end the legal limbo over banking cannabis in the growing number of states where it's legal. Read the letter: https://t.co/1529vIHawq
— American Bankers Association (@ABABankers) December 12, 2019
The letter, also signed by Americans for Prosperity and R Street, recognizes that creating a federal regulatory scheme for marijuana will take time but says that the SAFE Banking Act represents “a critical first step to ensure that legal cannabis marketplaces are safe, legal, and transparent.”
Crapo has said that he’s interested in holding a vote on resolving the cannabis banking issue in his panel before the year’s end, but so far nothing has been scheduled. The chairman told Marijuana Moment in earlier interviews that there are several changes to the House-passed bill that he’d like to see but that he’s worried impeachment proceedings against the president will interfere with plans to hold a vote.
All that said, pressure from civil rights advocacy groups could complicate congressional efforts to get the banking bill approved. In October, several organizations including the ACLU, Drug Policy Alliance, Human Rights Watch and Center for American Progress sent a letter to Senate leadership, as well as Crapo and Brown, demanding that “marijuana legislation considered in the Senate include provisions that will guarantee equity in the industry.”
The letter, which doesn’t appear to have been previously reported and was obtained by Marijuana Moment, states that while the coalition agrees the SAFE Banking Act “is an incremental step toward rolling back the federal prohibition of marijuana, it fails to help communities that have been historically and disproportionately devastated by United States’ punitive drug laws.”
“As the Senate Committee on Banking, Housing, and Urban Affairs considers similar legislation, we insist that the legislation include provisions that ensure equity in the marijuana industry by creating opportunities for individuals who have been prohibited from this growing business either by legal or financial means,” the letter, which was also signed by the Immigrant Legal Resource Center, Leadership Conference on Civil and Human Rights and National Association of Social Workers, states.
“Indeed, this Congress has shown it understands the economic impact of legalization. But while progress on the business side of legalization is promising, it is not sufficient. Federal marijuana legislation must be comprehensive and lead with equity, addressing past and current harms to communities of color and low-income communities who bore the brunt of the failed war on drugs. We demand that any marijuana reform or legalization bill considered by the Senate] include robust provisions addressing equity. More than simply adding equity provisions to bills that address industry concerns, we need comprehensive reform that deschedules marijuana and addresses the inequities and harms continually inflicted by the failed war on drugs.”
In other words, the groups are insisting on broad reform prior to a vote on a bill viewed as largely beneficial to the cannabis industry—similar to a request they made of House members prior to the legislation’s passage in the chamber.
Read the marijuana banking letters from the trade associations and civil rights groups below:
GOP Congressman Knocks His Party For Failing To Pass Marijuana Reform
A Republican congressman says that whichever party is responsible for passing federal marijuana reform will “instantly” shoot up in the polls, while lamenting the fact that the GOP failed to do so when they controlled the House.
Rep. Thomas Massie (R-KY), a vocal advocate for hemp, was asked by Fox Business host Kennedy on Wednesday whether cannabis should be rescheduled under federal law.
“Absolutely,” he said. “The first party that does this—and I don’t understand why either party won’t do it—is going instantly gain 10 points in the general poll on which party versus the other.”
“We should have done it when we were in the majority,” he added. “The liberals should be asking Pelosi why she hasn’t put it on the floor yet.”
The House Judiciary Committee approved legislation last month to end federal marijuana prohibition, but it hasn’t yet been scheduled for floor action.
Massie made similar points during an interview with Marijuana Moment earlier this year, stating that if Republicans had advanced states’ rights-focused marijuana legislation, “I think we might still be in the majority.”
Of course, while Massie has supported legislation to allow states to set their own cannabis policies without federal intervention, as well as other more modest reform measures such as protecting banks that service marijuana businesses, he’s so far declined to cosponsor any bills that seek to deschedule cannabis.
The congressman has also expressed interest in changing federal gun control laws to allow cannabis consumers to purchase firearms.
Though it’s not clear exactly how much of a boost either party would get by passing a marijuana reform bill, a Pew poll released last month does show that there’s majority support for legalization among those who lean Republican (55 percent) as well those who lean Democratic (78 percent).
Photo courtesy of YouTube/Rep. Massie.
State Department Warns Travelers About Flying With Cannabis Oil Internationally
The U.S. State Department is warning international holiday travelers that while hemp-derived CBD might be legal in the U.S., it can land you in trouble if you take it certain places abroad.
“Make sure your gift isn’t a fa la la la la la la la la fail,” the department said in a tweet on Thursday. “Bringing along gifts like drones, CBD oils, and firearms can land you in trouble in foreign countries. Research what is and isn’t allowed before you travel.”
(Marijuana Moment’s editor provides some content to Forbes via a temporary exclusive publishing license arrangement.)
Photo courtesy of Flickr/DHS.