Fate of marijuana banking bill left to jockeying over must-pass defense bill

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FILE – In this Dec. 9, 2013 file photo, marijuana grower Marcelo Vazquez checks the leaves of his plants for fungus, on the outskirts of Montevideo, Uruguay. A marijuana growing club is taking steps to be the first officially recognized in Uruguay, where lawmakers have made their country the world’s first national marketplace for legal pot. The Association of Cannabis Studies of Uruguay began the process by registering with the Education and Culture ministry, Drug Control Chief Julio Calzada said on Tuesday, June 24, 2014. (AP Photo/Matilde Campodonico, File) Matilde Campodonico

Fate of marijuana banking bill left to jockeying over must-pass defense bill

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A bipartisan group of senators is working to attach major marijuana legislation to “must-pass” year-end defense legislation expected on the floor later this week.

Senate Majority Leader Chuck Schumer (D-NY) and Sen. Jeff Merkley (D-OR) have been working with Republican Sens. Steve Daines (R-MT), Rand Paul (R-KY), and Dan Sullivan (R-AK) to implement legislation that would allow cannabis companies access to banking institutions and create grants for state expungement of past marijuana convictions, according to several outside groups familiar with their plans. The legislation would combine two bills: the Secure and Fair Enforcement Banking Act and the Harnessing Opportunities by Pursuing Expungement Act.


The group of senators has received the Department of Justice’s approval, saying it would be able to implement a revised version of the legislation, according to reporting from Axios. Earlier this year, the DOJ sent a memo to the Senate with concerns that the SAFE Banking Act would undermine the agency’s ability to investigate money laundering and other wrongdoing by cannabis businesses that are legal under state law. Most of the changes suggested by the DOJ have to do with language related to “cannabis-related legitimate businesses” that it said “could create an immunity shield around activities of cannabis businesses that involve other illicit drugs or activities.” The recent changes to the bill ensure it is not more difficult for law enforcement to prosecute crimes involving other drugs or money laundering.

The SAFE Banking Act, which has passed in the House in some form six times, allows federally insured banks to work with cannabis businesses in states that have legalized marijuana. A group of bipartisan senators last year argued that enacting the bill via the National Defense Authorization Act “would support a rapidly growing industry that creates jobs, supports small businesses, and raises revenue in states that have chosen to legalize cannabis, while reducing safety risks.” The bill has been stuck in the Senate, where it either has not gone far enough for some progressives or too far for certain Republicans.

The offices of several Republican senators — Pat Toomey (R-PA), Jim Inhofe (R-OK), and Chuck Grassley (R-IA) — met with the DOJ on Monday to discuss their concerns with the cannabis banking legislation. Staff for Grassley, the ranking member of the Senate Judiciary Committee, said the senator still has major concerns with the new version of the bill and expressed his opposition.

“Career DOJ staff raised serious enforcement concerns, but legislative text reportedly marked up by the DOJ failed to correct or even address many of those same concerns,” said spokesman Taylor Foy on Monday evening.

“It’s unclear whether political appointees sought to water down legitimate concerns previously raised by career staff, but what is clear is that the DOJ still has outstanding problems with this bill. When pressed, DOJ wasn’t able to rebut assertions that the SAFE Banking Act would increase the risk of drug cartels exploiting the American banking system to launder their dirty money,” he added.

Several special interest groups are sounding the alarm about the implications of implementing the SAFE Banking Act.

“This is a giveaway to the corporate vested interests who want to get rich off of addiction. This is a giveaway to big tobacco, which is the biggest winner of this because it would allow them to really legally invest in different areas in the marijuana space,” said Kevin Sabet, the president and CEO of Smart Approaches to Marijuana. “This is not about social justice or repairing the rights of past policies and laws.”

Sabet said he’s cautiously optimistic the bill may not be able to garner enough support among Republicans.

“I don’t think this is something Minority Leader McConnell wants. I think this is something that is going to make a few Republicans very irate, and it’s not germane at all to any of the legislation that’s being looked at,” he said.

Some critics also are raising concerns about attaching the legislation to the annual NDAA.

“The National Defense Authorization Act is designed to make sure that the appropriators have the authority to give the Defense Department whatever money they need to protect the safety and security of the nation and its people,” said Paul Larkin, a senior legal research fellow at the conservative Heritage Foundation. “In my view, regardless of what an amendment like this does, it is a cheap political trick. It puts the lives of Americans and others at risk.”

Passing the legislation has become a priority for the Senate majority leader ahead of the next session of Congress, in which Republicans will have the majority in the House next January, according to staffers involved.

Senate Banking Chairman Sherrod Brown (D-OH) recently met with Majority Leader Schumer and Daines and Merkley in an effort to move forward with the SAFE Banking Act in a bipartisan way.

In a statement to the Washington Examiner, a spokesman for Daines said, “The senator is continuing to work to build consensus so we can pass ‘SAFE Banking’ into law this year. When it comes to what avenue that would be used for it to become law, anything can happen.


President Joe Biden recently signed a marijuana research bill into law, enacting the first piece of stand-alone federal cannabis reform legislation in U.S. history.

In October, Biden announced he would pardon all prior federal convictions for simple possession of marijuana. Additionally, he urged governors to follow his lead and launched a review of how marijuana is classified under federal law.

© 2022 Washington Examiner

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