U.S. Senate Committee Approves Bipartisan Marijuana Banking Bill, Sending It To The Floor

The Senate Banking Committee has approved a bipartisan marijuana banking bill with amendments, sending it to the floor.

On Wednesday, members voted to pass the Secure and Fair Enforcement Regulation (SAFER) Banking Act, sponsored by Sens. Jeff Merkley (D-OR) and Steve Daines (R-MT), in a 14-9 vote. This comes one week after it was filed with revisions that were meant to bolster its bipartisan buy-in.

“It’s been quite a journey,” Committee Chairman Sherrod Brown (D-OH) said at the beginning of the meeting. “Regardless about how you feel about states’ efforts to legalize marijuana, this bipartisan bill is necessary. It will make it safer for legal cannabis businesses and service providers to operate, to protect their workers first and foremost and to operate in their communities.”

NEW: the SAFER Banking Act has passed the Committee with a bipartisan majority. Let’s get this bill to the floor to protect small businesses in the cannabis industry.

— Senate Banking and Housing Democrats (@SenateBanking) September 27, 2023

Sen. Steve Daines (R-MT), the lead GOP sponsor of the SAFER Banking Act, emphasized that he does not view the legislation as a step toward legalization, which he opposes. But “the current all cash model of legal cannabis businesses makes him targets for theft, for tax evasion and for organized crime,” he said.

“The key to addressing this risk is by ensuring that all legal businesses have access to the banking system,” Daines said.

The committee adopted an amendment from Brown making technical, clean-up changes that are considered non-controversial.

Watch the Banking Committee markup of the SAFER Banking Act in the video below: 

Sen. Raphael Warnock (D-GA): Sunset the SAFER Banking Act after five years unless the Department of Treasury, in consultation with other agencies, submits a report to Congress certifying that the measure has decreased the racial wealth gap and ameliorated other negative economic impacts of the War on Drugs

Sen. Mike Crapo (R-ID): Remove and replace Section 10 with language stipulating that federal regulators cannot pressure financial entities to “refuse to provide services to a lawful entity” unless that business is engaged in “unsafe and unsound practices.”

Amendments introduced and withdrawn:

Sen. Mike Rounds (R-SD): Sunset the bill if marijuana is federally rescheduled.

Amendments ruled not germane to the committee’s jurisdiction:

Sen. Bill Hagerty (R-TN): Prevent the “laundering of fentanyl and methamphetamine proceeds via marijuana sales.”

Amendments ruled out of order because the filing did not follow committee rules:

Sen. Raphael Warnock (D-GA): Require a Government Accountability Office (GAO) study within two years of enactment on the “racial wealth gap and the percentage of minority-owned cannabis-related businesses before and after the passage of the SAFER Banking Act,” according to a summary.

Members were expected to consider multiple additional amendments on issues such as cannabis industry access to stock exchanges and broad justice-focused marijuana reform and more. However, senators did not formally offer those proposals.

Warnock delivered a speech expressing concerns about the bill as drafted, arguing that it “will make life safer for bankers for businesses and financial institutions, some of whom have been profiting from the cannabis industry illegally for years.”

“I’m not opposed to easing or undoing federal restrictions around cannabis. And I would support all of the provisions and reforms in this legislation if paired with broader cannabis reforms that substantively addressed the issue of restorative justice,” he said. “This bill does not do that.”

Headed to the @SenateBanking hearing on the #SAFEBanking Act.

But it only makes wealthy cannabis investors “safer” to make more profit—it does nothing for the millions of Americans hardest hit by the War on Drugs.

Tune in now to hear my deep concerns: https://t.co/EGSSITZRJA

— Senator Reverend Raphael Warnock (@SenatorWarnock) September 27, 2023

Sen. Elizabeth Warren (D-MA) said she agreed with Warnock’s comments, though she said she’s supporting the underlying bill because it represents “common sense policy” and “a good step in the right direction to make federal cannabis law a little less out of touch with reality on the ground in states across this country.”

“Ultimately, we need to remove marijuana from the Controlled Substances Act altogether,” she said. “It makes no sense that marijuana remains a Schedule I drug while the state legal marijuana industry is booming. The communities that have borne the brunt of marijuana criminalization for decades should not be left behind.”

The road to Wednesday’s vote has been bumpy. While the House has passed earlier versions of the legislation several times, this marks the first time the Senate has taken the lead—and bipartisan negotiations have proved trying.

Leadership aimed to move the bill through committee in July, but disagreements over provisions related to broad banking regulations shot that timeline down. Then, over the August recess, lawmakers drafted a revised version, with a slightly updated title and new language that earned some praise from both sides of the aisle.

But the amended SAFER Banking Act that was finally released last week is likely not in its final form. Beside amendments adopted during Wednesday’s markup, there are additionally plans to amend it on the floor. Senate Majority Leader Chuck Schumer (D-NY) wants to use that opportunity to incorporate legislation on incentivizing state-level cannabis expungements, as well as protecting gun rights for marijuana consumers.

Senate Banking Committee Chairman Sherrod Brown (D-OH) predicted last week that the SAFER Banking Act will pass “decisively” out of his panel. In light of reporting on heightened tensions over certain provisions, that remains to be seen.

In a statement last week, Daines, the lead GOP sponsor, touted provisions of the legislation that he said would protect firearm and energy companies in Montana “from the Left’s woke agenda.” His office has also said that the senator is open to attaching the expungements provisions Schumer is proposing.

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Meanwhile, a group that represents state lawmakers across the U.S. urged Senate leaders this week to pass the SAFER Banking Act to provide a “much-needed solution” to the “unsafe and untenable” challenges that the cannabis industry faces under prohibition.

Last week, a coalition of 35 cannabis trade associations, drug policy reform groups and a top national labor union called on Congress to help address the “humanitarian toll” of robberies targeting cash-intensive marijuana businesses by passing the SAFE Banking Act “this year.”

The American Trade Association for Cannabis and Hemp (ATACH)—along with trade groups representing marijuana businesses in 16 states plus Washington, D.C.—also sent a letter to Brown and Banking Committee Ranking Member Tim Scott (R-SC) in July, imploring them to pass the cannabis banking bill “without further delay.”

Also, the American Bankers Association (ABA) also renewed its call for the passage of the legislation. And all 50 of its state chapters did the same, as did insurance and union organizations, in recent letters to congressional leadership.

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