Schumer Touts Marijuana Banking Bill As Bipartisan Priority, And Republican Sponsor Is Optimistic As Long As Measure Isn’t Expanded

June 28, 2023 ·

Senate Majority Leader Chuck Schumer (D-NY) is highlighting marijuana banking reform is one of several key legislative priorities that he intends to push through using bipartisan cooperation when the Senate reconvenes next month. The Republican sponsor of the cannabis bill, meanwhile, says this is the “best” time to get the job done—but cautioned that passage could be jeopardized if Democrats move to significantly expand the scope of the legislation.

In the first half of this year, the majority leader was focused on getting President Joe Biden’s judicial nominees confirmed and fending off GOP-led regulatory rollback legislation. But in an interview with Politico that was published on Tuesday, Schumer said that he’s preparing for the second act of 2023, which will involve an intensive push to enact bipartisan bills like the Secure and Fair Enforcement (SAFE) Banking Act.

The bill from Sens. Jeff Merkeley (D-OR) and Steve Daines (R-MT) already received an initial hearing in the Senate Banking Committee last month. And the expectation is that it will be scheduled for a markup soon, possibly as soon as next month when senators return from the Independence Day recess.

Schumer recently spoke with a cannabis industry leader who approached him at an unrelated event this month, and according to that entrepreneur, the Senate leader is feeling “confident” about the prospects of passing the marijuana banking bill. Observers say that the question is whether Democratic lawmakers will seek to expand the measure in a way that makes it unpalatable to their Republican colleagues.

Schumer needs to secure at least nine GOP members for passage in his chamber (assuming there are no Democratic defections)—and certain senators have recently indicated that the votes are there to reach the required 60-vote threshold on the standalone. Daines, the Republican sponsor of the SAFE Banking Act, told Politico that this is the “best opportunity that we’ve had” in the current Congress to pass the bill.

“Leader Schumer has been working hard and effectively to assure that we have a SAFE Banking bill and not something beyond that,” he said. However, he cautioned that the bipartisan progress could be undermined if Democratic senators seek to expand the scope of the bill, as some justice reform advocates would like to see.

The compliment to Schumer’s work is especially notable considering that Daines chairs the National Republican Senatorial Committee (NRSC), whose mission is to reclaim the majority for the GOP after next year’s election.

In terms of expanding the banking bill, there is at least one bipartisan measure that Schumer has described as “critical” to attach as an amendment on the floor: the Harnessing Opportunities by Pursuing Expungement (HOPE) Act, which would incentive states to facilitate clemency for people with prior cannabis convictions on their records.

Don Murphy, director of government relations for the Marijuana Leadership Campaign, told Marijuana Moment in a phone interview on Tuesday that the SAFE + HOPE combination is effectively a done deal with bipartisan buy-in.

“I actually believe HOPE is part of the Republican calculus here,” he said. “I think it’s baked into the cake of the negotiations. It’s been left to give Democrats something to support on the floor to help alleviate the problems they may have elsewhere.”

Any problems getting the marijuana banking reform through the Senate would come if Democratic members insist upon a broader package of social equity provisions, which would likely spell doom in the GOP-controlled House. Murphy also said that the bill’s prospects would significantly diminish if senators try to remove a section of the measure that has been flagged by certain Democrats like Sen. Jack Reed (D-RI) who worry it would inadvertently undermine banking regulations.

“The Republicans I’ve spoken with about Section 10—it’s a non starter,” he said. “If that gets stripped out, they’re gone.”

While the SAFE Banking Act has yet to be scheduled for a committee markup, lawmakers from across the aisle are signaling that the votes are there for passage—so long as there are no major contentions or hiccups along the way, as Daines suggested.

Justin Strekal, founder of BOWL PAC, told Marijuana Moment that a bipartisan agreement to attach expungements to SAFE Banking is viable and that “it’s my hope that the full weight of all stakeholders can unify in support of it.”

“Now is the time for the movement to ‘take the W’ and then leverage the momentum into comprehensive legislation that protects consumers, addresses past harms, and creates equitable business opportunities,” he said.

(Disclosure: Strekal supports Marijuana Moment’s work through a monthly pledge on Patreon.)

Sen. Tommy Tuberville (R-AL) said last week that he’s a “yes” on the legislation. He just doubts that Democratic leadership will follow through on their pledge to get the job done this year.

Democrats would likely contest that characterization. Senate Banking Committee Chairman Sherrod Brown (D-OH) said earlier this month that he wants to hold a vote on it “in the next two or three weeks,” for instance.

As its currently drafted, the measure 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.

A major cannabis lobbying firm apologized last month after sending a letter to Senate Banking Committee leadership concerning the banking bill that contained “inappropriate” references to investments from China in a “misguided attempt” to push for amendments expanding the legislation.

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

In April, Schumer said that he was “disappointed” that a so-called SAFE Plus package of cannabis reform legislation didn’t advance last year, saying “we came close,” but “we ran into opposition in the last minute.” He said lawmakers will continue to “work in a bipartisan way” to get the job done.

The majority leader has been holding meetings with Democratic and Republican members in the early months of the new Congress to discuss cannabis reform proposals that might have bipartisan buy-in this year.

Sen. Cory Booker (D-NJ) said recently that lawmakers are working to “resurrect” the cannabis reform package, acknowledging that failure to advance a banking fix for the industry “literally means that hundreds of businesses go out of business.

Rep. Earl Blumenauer (D-OR), who is a lead sponsor of the House version of the SAFE Banking Act, said at a recent press briefing 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. (Full Story)

In categories:Banking Politics
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