June 18, 2021
By Kyle Jaeger / Marijuana Moment
The sponsors of a Senate bill to protect banks that service state-legal marijuana businesses from being penalized by federal regulators are publicly urging a key chairman told put the legislation to a vote.
In a letter sent to Senate Banking Committee Chairman Sherrod Brown (D-OH) on Thursday, Sens. Jeff Merkley (D-OR) and Steve Daines (R-MT) urged a markup of their Secure and Fair Enforcement (SAFE) Banking Act, arguing that it would help address an urgent public safety issue.
“This is not simply a matter of banking. The inability of these state-legal entities to bank their significant cash reserves is an issue of public safety,” they wrote, citing cases of robberies and armed burglaries at dispensaries in both of their home states.
“We owe this to our constituents to hold a markup on this bill and further the legislative process,” the letter, which was also addressed to the panel’s ranking member, Sen. Pat Toomey (R-PA), continues. “To foster success rather than gridlock, we believe this markup on S. 910 is necessary and should focus on policies with robust bipartisan support.”
What’s notable about the letter, which comes three months after the bill’s reintroduction, is that the sponsors feel it’s necessary to communicate their request in such a public manner—perhaps signaling that Brown has been unresponsive to conventional behind-the-scenes requests among colleagues.
The chairman has made clear he’s not eager to advance the legislation, saying in April that “I think we need to look at a number of things,” and that the body is “not ready to move on it.”
One thing that Brown previously said he wanted to do was tie the cannabis banking legislation to sentencing reform, though he’s since indicated that he’s not necessarily married to that approach.
He also disclosed that he’s in talks with Senate leadership on potentially merging the banking reform into a broader marijuana legalization proposal that’s being drafted. Senate Majority Leader Chuck Schumer (D-NY), who is championing that forthcoming bill, says he doesn’t feel the chamber should advance the SAFE Banking Act before passing something comprehensive that addresses social equity.
“I’ve always been of the view that while certainly we have to deal with the banking and financial issues that we should do them together with legalization because the [SAFE Banking Act] brings in some people who might not normally support legalization, and we want to get as broad a coalition as possible,” Schumer told Marijuana Moment in April.
Over in the U.S. House of Representatives, lawmakers already passed their version of the banking bill in April—marking the fourth time that the measure has cleared that chamber in some form.
Also, House Judiciary Committee Chairman Jerrold Nadler (D-NY) has already refiled his marijuana legalization bill, the Marijuana Opportunity, Reinvestment and Expungement (MORE) Act. Advocates are pushing for a vote on that measure this month, and some are hoping for a series of key revisions to enhance its social equity components.
As it stands, the banking legislation has 38 cosponsors in the Senate, in addition to lead sponsor Merkley, which means more than a third of the chamber is already formally signed on.
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 in March 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.”