Policies surrounding the failed War On Some Drugs are coming to the forefront of voter attention this campaign season and congressional leaders are catching cannabis fever. Senate Majority Leader Sen. Chuck Schumer (D-NY) is looking to fold SAFER Banking into cryptocurrency legislation, while once again calling for cannabis reform amid the fanfare of 420. But are either of these things really going to happen, or are we just seeing more political theater?
According to a Politico report earlier this month, Schumer met with House Financial Services Chair Patrick McHenry (R-N.C.) and ranking member Rep. Maxine Waters (D-Calif.) last week to discuss legislation for cryptocurrency regulation that’s being written. The legislation would help stabilize cryptocurrency by attaching it to stable assets, making it easier to trade, while allowing banks to become stablecoin issuers.
While it may seem like an unusual place for cannabis talk to come up, the lawmakers reportedly discussed folding both the cryptocurrency bill and SAFER Banking into the Federal Aviation Administration (FAA) reauthorization bill—the legislation that funds the FAA.
You didn’t read that wrong. The lawmakers reportedly plan to tie a bill for regulating cryptocurrency to one concerning cannabis banking and then slap the whole mess onto an aviation regulatory agency’s funding bill.
Schumer hasn’t hidden his desires to see SAFER Banking passed this year. Last month, he called for voters to sign a petition supporting the bill, which would allow banks to work with cannabis businesses without threat of prosecution from the federal government.
Banks are prohibited under current federal law from doing business with clients involved in illegal activities. Since weed is still federally illegal, a bank that works with state-licensed marijuana companies could be prosecuted for laundering ill-gotten gains. This leaves weed businesses in a very special lurch as they are forced to operate as cash-only businesses, making it difficult to process payrolls, impossible to conduct electronic transactions and even painting them as easy targets for thieves.
The SAFER Banking bill has a checkered past. Various lawmakers have used it as a bargaining chip due to its popularity among every stakeholder sector involved in the issue. Businesses want it to pass. Banks want it to pass. Activists want it to pass. Unlike other cannabis reform bills of the past, a previous version of the bill had support from both sides of the aisle and even passed in the House. So why is it in trouble now?
Before we answer that, we’ll have to take a quick detour to talk about Schumer’s marijuana legalization bill, the Cannabis Administration and Opportunity Act (CAOA).
The bill would completely remove marijuana from the federal list of controlled substances, set up a system for taxing marijuana sales, create a regulatory system, expunge low-level cannabis conviction records, create equity grant programs and legitimize state-licensed cannabis businesses.
Schumer and Sens. Ron Wyden (Ore.) and Cory Booker (N.J.) last week were reportedly trawling for Republican support of the CAOA ahead of 420. Wyden said during a press conference that descheduling weed should be a “Republican dream,” since the party makes such a stink about states’ rights.
The GOP, as a monolith, is still hard-nosed against legalization or decriminalization at the federal level. Any grand, sweeping reform bill like the CAOA will undoubtedly be shot down at this stage.
But as we mentioned earlier, plenty of Republicans supported the SAFE Banking Act. Nevertheless, its latest incarnation still hasn’t been able to limp across the finish line in the Senate.
One of the biggest contributing factors as to why such a no-brainer piece of legislation would have so much trouble in the Senate over the last two years is that Schumer and his crew—the great heroes of weed in the Senate—have been holding it hostage as they float their own broader policy reforms and their significantly lower level of support.
In 2021, Booker swore he would “lay myself down” to block banking legislation from being passed if the CAOA wasn’t passed first. That obviously didn’t happen, so the next year Booker took to calling himself a “compromise guy” before he and Schumer began pushing to include equity provisions from the CAOA in the SAFE Banking bill. The crew last year successfully introduced “SAFER Banking,” a new version of the legislation that incorporated language from the CAOA, making its reforms broader and far less popular. The bill will presumably not be reverting to its original form in the future.
If it weren’t for the Schumer Gang’s influence, we could have already seen the passage of SAFE Banking, which would have been a net win for cannabis businesses. Instead, we’ve now gained even more nebulous “conversation” around the topic of weed prohibition while making very little progress in the area of actual reform.
In other words, Schumer, Booker and Wyden have made it so that they get to appear as great heroes of legalization while failing to actually move the needle in any meaningful way. In fact, they have held back incremental reform by turning SAFE Banking into the less palatable SAFER Banking and involving it in hijinx like the proposed marriage with the cryptocurrency bill.
All of this adds up to a handful of politicians making a big show of running in place, but to what end? Is this a ploy to firmly affix the carrot of weed legalization just out of reach as a way to drum up support from Democratic voters while simultaneously propping the party up as the obstructed avenger of reform?
It’s a mystery. But the pieces should fall into place by November.