Does Congress have time to pass SAFE Banking?

The chance that we’ll see SAFE Banking or a SAFE Plus cannabis bill package passed before the end of the session is becoming less likely as the year comes to a close. Is there no hope for cannabis before the new Congress convenes?

Defense Bill Attempt Shot Down

Last week lawmakers removed cannabis banking reform from the National Defense Authorization Act (NDAA). Democrats had attempted to include the reforms in the defense bill as a last-minute attempt to see language from the SAFE Banking Act passed into law.

Since cannabis is federally illegal, banks are prohibited from knowingly working with marijuana companies by anti-money laundering laws. SAFE Banking would make it legal for financial institutions to work with cannabis companies without fear of being prosecuted by federal officials.

Senate Minority Leader Mitch McConnell (R-KY) took the floor weeks ago to brag about the reforms’ removal from the NDAA.

“Just as Republicans insisted, just as our service members deserve, this NDAA is not getting dragged down by unrelated liberal nonsense,” McConnell said. “Good smart policies were kept in and unrelated nonsense like easier financing for illegal drugs was kept out.”

McConnell also appeared to encourage Republican lawmakers to resist allowing cannabis banking provisions into the government funding bill.

“Just like on this bill, neither party has any standing to demand unrelated goodies in exchange for doing our job and funding defense,” he said.

Inclusion in Spending Bill

Near the same time that McConnell was speaking on the Senate floor, SAFE Banking Act sponsor Rep. Ed Perlmutter (D-CO) told the House Rules Committee that he was ready to attach SAFE Banking provisions to the forthcoming omnibus spending bill.

“I didn’t sleep at all last night, either,” he said in response to the removal of banking reform from the NDAA. “But you all have done everything you can to keep this in and, obviously, it is not a defense piece of legislation. I appreciate that. The Senate—if I really told you what I thought, it would be unrepeatable and we’d all—I’d certainly get into trouble.”

“I’m not giving up on this darn thing yet,” he added. Perlmutter is set to retire at the end of the session.

House Armed Services Committee Chairman Adam Smith (D-WA) said that while the banking language was removed from the NDAA, the campaign did make a difference, claiming that the SAFE Banking Act now has 59 votes in the Senate. It would need 60 votes to pass.

“I will emphasize the SAFE Banking bill as a standalone piece of legislation is in the Senate,” Smith said. “They can go ahead and take it up and pass it, so the effort to push it in this bill forced the question and got to 59. And we’re not done yet.”

The banking bill has already passed seven times in the House, but has been ignored by the Senate.

DOJ Puts Up a Fight

Earlier this month, the Department of Justice (DOJ) was reportedly tasked with analyzing the SAFE Banking Act at the behest of Republican senators. According to the memo produced by the department and reportedly sent to Republican lawmakers, the DOJ said it was concerned with language that might protect “legitimate” cannabis operations from prosecution if they also take part in other illegal activities.

“The bill could therefore be read to immunize a state-legal marijuana business that is also engaged in fraud, for example, or one whose marijuana business includes both state-legal and state-prohibited conduct,” wrote the department.

The DOJ also criticized the bill for exempting some revenue streams from anti-money laundering laws as it would allow cannabis companies to take part in other illegal activities without repercussion.

The department was also concerned that banks weren’t required to ensure that the companies they work with are in compliance with local cannabis laws.

SAFE Plus Flailing

As for the so-called SAFE Plus package, Senate Majority Leader Chuck Schumer (D-NY) has yet to reveal any drafts of the legislation, but insiders say the bill will include reforms from SAFE Banking as well as Reps. Dave Joyce (R-OH) and Alexandria Ocasio-Cortez’s (D-N.Y.) HOPE Act, which would create grants for state-level cannabis crime expungements.

Lawmakers are also considering the inclusion of language from former Alaska representative Don Young’s GRAM Act, which would protect cannabis users’ right to bear arms.

There has been bipartisan support for SAFE Banking, and the GRAM Act addresses Libertarian and Republican concerns. Expungement provisions are expected to carry over on goodwill for either of the other bills.

But between the DOJ’s charge that banking reforms aren’t legally sound and McConnell’s scathing criticism of SAFE Banking as “financing for illegal drugs,” Republican opinion of the bill could drastically change in the crucial coming days if it hasn’t already.

Advocates have warned that if banking reform isn’t passed before the end of the session, a Republican House will halt all progress until Democrats take power again. That could potentially be years from now, and Congress has only days to act.

Small Wins

In the meantime, Congress did manage to pass the nation’s first cannabis reform law this month when President Joe Biden signed the medical cannabis research bill. The new law streamlines the process by which scientific research teams apply for federal approval to study marijuana. Presumably, closer study will provide harder evidence about the benefits and harms of the drug that will better inform policymakers in the future.

The president has also initiated the process by which federal authorities may reschedule cannabis on the list of controlled substances, although it’s unclear if any progress has occurred.