Cannabis banking outlook bright in Senate, but federal shutdown looms

September 26, 2023 · MJ Biz Daily

Long-awaited federal cannabis banking reform is expected to sail through a key U.S. Senate panel hearing Wednesday, which would be the first time the landmark legislation has secured a yes vote in the upper chamber of Congress.

But after that, prospects for the bipartisan and heavily negotiated SAFER Banking Act are much less certain, multiple cannabis industry observers told MJBizDaily.

For once, negative attitudes toward marijuana wouldn’t be to blame.

Instead, the obstacle is the chaos currently enveloping Congress, where a government shutdown looks increasingly likely – although not guaranteed – come Oct. 1.

“If there’s a shutdown, we can reasonably expect that to slow down progress on Capitol Hill across the board,” said David Culver, senior vice president of public affairs at the U.S. Cannabis Council, which represents major cannabis industry interests in Washington DC.

“I’m not going to sugarcoat it: The shutdown is not good for SAFE. It’s not good for anything else moving forward this Congress.”  

On Sept. 20, Democratic Senate Majority Leader Chuck Schumer led a bipartisan group of lawmakers in announcing a new version of what had been called SAFE Banking.

The legislation would permit banks and other financial institutions to serve state-legal marijuana businesses without the threat of a crackdown by federal authorities.

The SAFER (Secure and Fair Enforcement Regulation) Banking Act – as the compromise bill has been dubbed – is scheduled for a markup hearing by the Senate Banking Committee on Wednesday – the first time the measure is expected to clear this hurdle in the chamber’s “regular order” process.

It’s understood that Schumer would go through such a ritual only if the bill’s path forward was clear.

‘We’ll pass it decisively’

Sen. Sherrod Brown, an Ohio Democrat who chairs the banking committee, predicted last Thursday the legislation would garner a strong majority of yes votes from the panel’s members.

“I don’t know what the vote will be, but I know we’ll pass it decisively,” he said in an interview with Matt Laslo of the Ask a Pol podcast.

Brown also said he doesn’t anticipate many amendments to SAFER Banking on the Senate floor, adding, “I think there will be enough agreement that we will keep the bill together and make minor changes.”

However, also last Thursday, a coterie of far-right Republican lawmakers blocked a usually routine defense spending bill, handing Republican House Speaker Kevin McCarthy a stunning defeat and jeopardizing his already weak hold on power.

The next day, federal lawmakers left Washington DC for the weekend without an agreement in place to fund the government beyond Sept. 30.

If Congress can’t hammer out a funding deal by that date, federal payments would stop and federal employees would begin to be furloughed Oct. 1.

Normal operations would be put on hold indefinitely while Congress tries to come to terms on a spending bill to fund the government.

Any funding deal could be a temporary agreement.

Uncertainty rules

How long a potential shutdown might last is anybody’s guess.

That would mean that after SAFER Banking’s markup in the banking committee this week, it’s far from clear when time could be found for a final vote on the full Senate floor – where, multiple sources told MJBizDaily, it’s believed SAFER Banking would enjoy more than the 60 votes necessary to defeat any filibuster.

But all that would need to happen before negotiations can begin in the House of Representatives, where concerns from some key Republicans would need to be addressed, Capitol Hill sources told MJBizDaily.

The longer any shutdown lasts, the less time there would be for Congress to pass SAFER Banking – along with any other pending legislation.

“This isn’t unique to cannabis,” one Capitol Hill source close to negotiations said anonymously, in order to speak freely.

“I think everybody with an agenda right now is looking at this like it might be a long shutdown.

“And if it’s a long shutdown, they’re not going to get the floor time.”

Of course, that prospect might not come to pass if lawmakers are able to nail down a funding agreement that would keep the federal government open – or if any shutdown proves short-lived.

Presidential pickle

Looking farther ahead, the looming 2024 presidential election presents another complication.

“The closer you get to November 2024, the ability to get anything done in a bipartisan manner decreases significantly, then grinds to a halt,” another observer said.

Don Murphy, a longtime pro-marijuana lobbyist on Capitol Hill, gave a more optimistic outlook.

“No one that I’ve talked to – and I’m talking generally all the senators involved, like Merkley, Daines and Brown – none of them see a shutdown as a problem for SAFE Banking,” he said.

“Assuming there is a shutdown, it will be relatively short,” Murphy added.

“This potential shutdown is not going to be but a blip on the radar of the timeline.” (Full Story)

In categories:Banking Politics
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