Former Marijuana Regulator Proposes More Equity Revisions To Banking Bill As Senators Plan Committee Vote

Advocates must continue to push for modest but meaningful changes to a bipartisan marijuana banking bill in order to maximize its social equity impacts, a former top Los Angeles cannabis regulator says in a new research paper that outlines recommended revisions.

The analysis from Cat Packer, who serves as vice chair of the Cannabis Regulators of Color Coalition (CRCC) and director of drug markets and legal regulation at the Drug Policy Alliance (DPA), comes as Senate leaders plan action for the Secure and Fair Enforcement (SAFE) Banking Act within the next several weeks of the current work session.

Packer says the “F” in SAFE can’t be compromised. Fairness should be a central tenet of the reform, and while advocates have helped secure “minor but meaningful changes” to the legislation this session as compared to the version filed last Congress, she argues that more can be done.

“Despite ongoing debate over the implications of passing protections for financial institutions before adopting more comprehensive and impactful cannabis reforms, a growing number of advocates and policymakers are taking the position that if lawmakers are prioritizing cannabis banking, the reform—like every other cannabis policy issue—can and should be equity-centered,” she wrote.

“While many in the broader cannabis industry are working simply to get the SAFE Banking Act passed, others are working to improve the bill,” the paper says. “The goal is to ensure that banking is consistent, systematic, fair, just, and impartial and that SAFE accomplishes more than merely protecting financial institutions from federal enforcement if they choose to provide services to certain marijuana businesses.”

Some of the changes lawmakers have already incorporated into the legislation include extending banking protections to Community Development Financial Institutions (CDFIs) or Minority Depository Institutions (MDIs), providing access to federally backed mortgage loans to cannabis industry workers and mandating reporting requirements on market diversity and inclusiveness.

Packer, whose paper was published by the Ohio State University (OSU) Drug Enforcement and Policy Center where she is a cannabis policy practitioner in residence, highlights five additional recommended changes that she says could further bolster the equity impact of the SAFE Banking Act.

Revise guidance to regulators to prevent banks from marking people with a “red flag” because of prior cannabis convictions if those records have been expunged or if the conviction was for an activity that’s been made legal. Such circumstances “should not be considered an automatic indication that a business may be engaged in illegal activity.”
While the SAFE Banking Act requires regulators to develop best practices for financial institutions serving the hemp industry, the paper says that should also be extended to the marijuana market.
The bill requires regulators and the Government Accountability Office (GAO) to study and and make recommendations concerning small business diversity and inclusion reports, but the language should be amended to define what constitutes a small businesses. The definition should be “in line with state-level definitions of cannabis microbusinesses.”
GAO’s mandate to study barriers to entry in the marijuana industry should be updated to include a “comprehensive review” of “existing strategies in legal jurisdiction.”
Finally, the SAFE Banking Act should be revised to “require that financial institutions demonstrate compliance with existing anti-discrimination in lending laws in order to receive the benefit of safe harbor.”

“Ultimately, Congress will decide what’s politically feasible. My goal is to ensure that Congress passes the best version of the SAFE Banking Act that it can,” Packer told Marijuana Moment on Wednesday.

“As someone who advocates on behalf of underserved communities and federal cannabis policies that are fair, my priority is ensuring that Congress understands the limitations of this bill, its potential impacts if there aren’t amendments focused on fairness and that minor and technical changes to this bill could improve it in significant ways,” she said. “If we’re only focused on what’s politically feasible—and willing to allow the politics of policymaking to be a hurdle to common sense policies that would promote fairness in cannabis banking—I worry about what that means for federal cannabis policy reform broadly.”

Several of the recommendations in this latest paper also appeared in a 2022 paper from CRCC that Packer helped author.

“Advocates and policy makers have already helped nudge the business-focused SAFE Banking Act in a direction that better promotes equity,” the new paper concludes. “Their ongoing efforts to promote fairness in cannabis banking have allowed for minor but meaningful changes. Yet for a bill that contains the word ‘fair’ in its title, more must be done to ensure the SAFE Banking Act lives up to its name.”

For now, supporters of the cannabis banking legislation are eagerly awaiting a Senate Banking Committee markup, which the chairman is aiming to hold during the current work session ending October 6. This comes about four months after the panel held an initial hearing on the legislation, where Packer was among those who testified.

Leadership initially planned to advance the bill during the July session, but action was delayed due to disagreements over a key section of the measure that concerns broader banking regulations.

Since returning from the August recess, however, key players on both sides of the aisle have indicated that they’ve had “productive” conversations and are close to a deal to get the bill to the floor. The markup will not be held next week, however, despite the predictions of industry insiders.

In any case, Senate Banking Committee Chairman Sherrod Brown (D-OH) said on Monday that he hopes to announce the scheduling of a SAFE Banking Act vote in his panel “in the next few days.”

For his part, Senate Majority Leader Chuck Schumer (D-NY) said in a Dear Colleague letter this month that “safeguarding cannabis banking” is one of his top legislative priorities, though he stressed the need for bipartisan buy-in. He also said in a floor speech last week that he’s committed to “making progress on cannabis” during the fall session.

At this point, the SAFE Banking Act has 42 cosponsors—nearly half of the Senate—and that includes eight Republicans and three independents. As a standalone in its current form, insiders say the measure has enough Republican buy-in to reach the 60-vote threshold needed for passage in the Senate.

Sen. Steve Daines (R-MT), the lead GOP sponsor of the cannabis bill, has previously cautioned against attempting to expand the measure with social justice reforms that progressives would like to add, though his office has told Marijuana Moment that the senator is “open” to adding expungements language, as proposed by Schumer.


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As its currently drafted, the SAFE Banking Act would protect banks and credit unions, as well as depository institutions, from being penalized by federal regulators for working with state-licensed cannabis businesses.

Others have also floated other changes that they’d like to see incorporated into the cannabis bill such as expanding protections to free up marijuana industry access to all forms of financial services, including representation on major U.S. stock exchanges.

That request has faced some criticism from other advocates who say that would be an inappropriate move to help businesses while efforts to legalize marijuana stall in Congress.

Sen. Jacky Rosen (D-NV) has also said that she wanted the SAFE Banking Act to pass with an amendment allowing cannabis businesses to access federal Small Business Administration (SBA) services.

Rep. Earl Blumenauer (D-OR), who is a lead Democratic sponsor of the House version of the SAFE Banking Act, said at a press briefing in April that thinks it’s important that advocates and lawmakers align on any incremental proposals to end the drug war, warning against an “all-or-nothing” mentality.

The American Bankers Association (ABA) also recently 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.

July also marked the 10-year anniversary since the introduction of the first version of what is now known as the SAFE Banking Act.

Colorado Gov. Jared Polis (D) separately said in a letter to President Joe Biden last week that he should throw his support behind the congressional push for marijuana banking reform as the Drug Enforcement Administration (DEA) begins its review of cannabis scheduling after receiving a rescheduling recommendation from the top federal health agency.

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