Senate Majority Leader Chuck Schumer (D-NY) is “making a last ditch effort” to put marijuana banking reform in forthcoming omnibus appropriations legislation, a senior Senate Democratic aide told Marijuana Moment on Friday.
With time running short in the lame duck session, there’s been a concerted push to use the spending package as the vehicle for the Secure and Fair Enforcement (SAFE) Banking Act. Lawmakers failed to secure a deal to attach the reform to a must-pass defense bill last week, leaving them with limited legislative options.
There are some GOP senators who’ve expressed support for moving the cannabis banking proposal, either as part of large-scale legislation or as a standalone, but other key players like Senate Minority Leader Mitch McConnell (R-KY) and Sen. John Cornyn (R-TX) represent major obstacles.
Negotiations were partly complicated after a Justice Department memo from earlier this year surfaced in a report, revealing that DOJ had some concerns about possible unintended consequences of enacting SAFE Banking. That prompted several Republican senators to hold a meeting with the department last week.
On Thursday, Democrats shared revised SAFE Banking text with Republicans that “addresses DOJ implementation and money laundering concerns,” the top staffer told Marijuana Moment and other news outlets on Friday. “Democrats have also presented language aimed at addressing the issue of legacy cash.”
After Politico reported on Schumer’s renewed efforts to put the banking legislation in omnibus appropriations, Cornyn shared the article and said that it’s “irresponsible to do this without a federal regulatory framework to address public health and law enforcement issues.” He added that senators “take an oath to uphold the law, not ignore it.”
It is irresponsible to do this without a federal regulatory framework to address public health and law enforcement issues. Senators take an oath to uphold the law, not ignore it.
— Senator John Cornyn (@JohnCornyn) December 16, 2022
The comment almost makes it sound as if he’s suggesting that marijuana should be federally legalized before Congress passes the more modest banking reform for the industry, but that would represent a significant policy shift for the Republican senator who’s strongly opposed ending prohibition.
The majority leader, meanwhile, is “expected to push for including the revised bill at the leaders level in omni negotiations,” the senior aide said. However, it’s “unclear” if McConnell will move to block the reform despite Democrats’ work to resolve various GOP concerns, they added.
McConnell applauded the exclusion of SAFE Banking from the National Defense Authorization Act (NDAA) bill last week, has repeatedly signaled that he’d fight against attempts to advance it through appropriations as well.
Meanwhile, Sen. Dan Sullivan (R-AK), a co-sponsor of the Senate SAFE Banking Act, told The Hill that the issue has “got to be addressed,” and he’s been “trying to make the case to my conference that this is not some kind of crazy bill. It’s a bill about safety and small businesses.”
“My support for SAFE Banking relates to the first word in the bill. It’s called ‘SAFE.’ This is a public safety issue,” Sen. Steve Daines (R-MT), a prime sponsor of the bill, told the outlet. “For states that have legalized cannabis, this is a way you can make a community safe—by taking the cash off the street and put it in the bank.”
Sen. Thom Tillis (R-NC), meanwhile, seemed to align himself more closely with the position of Cornyn.
“It seems odd that we would create a legal construct for something that’s federally prohibited,” he said. “If you want me to be sympathetic to states that have legalized it, contrary to federal law, that have a banking problem, let’s look at the broader issues that would have to be part of federal policy.”
Separately, Senate Banking Committee Chairman Sherrod Brown (D-OH) signaled on Thursday that marijuana banking reform might be on hold until the next Congress in 2023, rather than passed during the lame duck session as advocates and stakeholders had hoped.
However, Brown’s office told Marijuana Moment that the senator still would like to see the reform included in omnibus appropriations legislation this year so long as it contains additional provisions that he supports.
Asked about the Secure and Fair Enforcement (SAFE) Banking Act, the senator told Punchbowl News’s Brendan Pederson on Thursday that he expects to “take it up and get it through” in 2023, adding that “there’s interest in the Republican House.”
Brown also expressed interest in the expanded SAFE Plus bill that Senate leadership has been finalizing because it’s expected to go beyond simple banking reform and also contain other provisions dealing with expungements and more.
The new 2023 comments seemed to depart from what Brown said in an interview that aired on Monday, with the senator insisting that a deal with banking included “absolutely could still happen,” and lawmakers were “this close to a deal,” placing his thumb and index fingers about an inch apart.
With Republicans set to reclaim a House majority in the next Congress, the idea that SAFE Banking has a clearer pathway in 2023 versus 2022 with Democrats currently in control of both chambers is questionable. The reform does enjoy strong bipartisan support, but it’s not clear that GOP leadership in the House will prioritize it, much less go along with an expanded version that contains the expungements components that Brown and others have pushed to include.
SAFE Banking sponsor Rep. Ed Perlmutter (D-CO), meanwhile, has made abundantly clear that he’s unwilling to give up the push and will continue to seek the bill’s passage before his retirement at the end of the 117th Congress.
A staffer in Perlmutter’s office told Marijuana Moment on Wednesday that while there’s uncertainty about advancing cannabis banking reform through the omnibus spending bill, the congressman “is still pushing as hard as he can and talking to leadership.”
Perlmutter said at a House Rules Committee meeting on Tuesday that SAFE Banking is one of two “outstanding matters that I’m still working on.” After the reform was left out of NDAA last week, he said he was looking at appropriations as an alternative vehicle, but at this point he said he’s just intent on adding it to “something.”
With each day that passes in the lame duck, there’s growing frustration and anxiety among advocates and stakeholders, some of whom feel that this may be the last chance in the short-term to get marijuana banking enacted before Republicans reclaim the majority in the House starting on January 3.
For his part, Sen. Cory Booker (D-NJ) has pinned blame on McConnell, telling NJ.com that his vocal opposition to cannabis reform has had a chilling effect of GOP members who might otherwise be amenable to passing legislation that contains SAFE Banking language.
“They’re dead set on anything in marijuana,” he said, referring to Republican leadership. “That to me is the obstacle.”
“The caucus is clearly divided but the people in power in their caucus are clearly against doing anything on marijuana,” he added.
Last week, SAFE Banking sponsor Sen. Jeff Merkley (D-OR) said that he will “keep fighting” to get the reform “passed this year,” adding that “this is not the end of the road.”
“We need to make sure that legal cannabis businesses have access to the financial services they need—operating in cash is an open door to robbery and money laundering,” he said. That’s also a point highlighted in a recent analysis that looked at the trends and motivations for crimes targeting cannabis businesses in Washington State.
One senator who could make or break the final SAFE deal in appropriations is Sen. Pat Toomey (R-PA), who was among the small group of senators who met with DOJ to seek assurances that issues it raised over SAFE Banking in its earlier memo have been effectively resolved.
Meanwhile, Sen. Patty Murray (D-WA), who will serve as Senate president pro tempore for the 118th Congress, is also pushing for passage of the cannabis banking reform during the lame duck, which she discussed at a leadership briefing with Schumer last week.
Murray said that Democrats have made significant progress on a number of issues, even with the slimmest possible majority in the Senate. She said that “we are not done yet,” and there are areas of bipartisan consensus that can still advance before the end of the session, which includes “making sure our legal cannabis businesses can access credit.”
Whether SAFE or SAFE Plus makes it into the forthcoming appropriations deal is yet to be seen. But it’s far from the only cannabis reform that advocates are hoping to see included in the final package delivered to the president’s desk.
The various appropriations bills that the House and Senate considered or advanced this year contain provisions ranging from protecting state marijuana programs from federal interference to removing the congressional blockade that’s prevented Washington, D.C. to implement a system of regulated cannabis sales for adults.