Cannabis News of Note for the Week:
Politico Pro Cannabis for 1/10/24: Funding Bill Delay Bodes Ill for SAFE(R) (paywalled newsletter, text below)
Politico Pro Cannabis: Gun groups not sold on cannabis banking bill (paywalled, full text below)
Punchbowl News’ The Vault for 1/7/24: Rough rowing ahead for financial services policy (paywalled newsletter, text below)
National Post: Cannabis advocates say banks still refuse their business, fuelling the illicit market and hurting the industry [Canadian banks/industry, but instructive to U.S. policy]
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Politico Pro Cannabis 1/10/24: FUNDING BILL DELAY BODES ILL FOR SAFE(R)
A funding deal is looking less likely in January, with Senate Majority Whip John Thune on Tuesday suggesting a deal may not come until March. The delay that would cause — time to pass another stopgap bill, and then more time dedicated to negotiations — is not good news for the cannabis banking bill.
The Senate will need at least two weeks of floor time to pass the bill, and Reggie Babin — a former top staffer in Senate Majority Leader Chuck Schumer’s office — pointed out to Natalie in December that the leader would not likely move the weed bill while government funding is still under negotiations.
“Because the Senate wouldn’t be able to conduct other business while considering the bill, the majority leader needs a window of time in which other immediate must-do items like government funding or a defense supplemental aren’t at the top of the agenda,” Babin said.
Optimistic projections in December suggested there may be a window to take up the cannabis banking bill in March or April. But if the government is still sorting out funding at that point, the timeline could move even further back. The worry is that, with immigration, Ukraine funding, and other controversial issues taking up a lot of the oxygen on the Hill, the weed banking bill may run out of runway in 2024.
The currently proposed funding bill has not reached a deal on Washington, D.C.’s weed industry. Lisa Desjardins of PBS reports that there is no deal on the policy riders that are included in funding bill negotiations. One of those is the Harris Rider, which prohibits D.C. from taxing and regulating the recreational marijuana industry that District voters approved in 2014.
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Politico Pro Cannabis: Gun groups not sold on cannabis banking bill
BY NATALIE FERTIG | 01/12/2024 05:00 AM EST
Congress has been trying to rope the gun lobby in to support a cannabis banking bill for years.
Lawmakers added language to the bill that would protect controversial businesses like gun shops from discrimination by the banking industry. And they tacked on a bill that gives marijuana users in legal marijuana states the right to possess firearms.
But so far, efforts to persuade the powerful gun lobby to back the bill with sweeteners haven’t worked. Neither the National Rifle Association or Gun Owners of America are supporting the bill in its current form and are pushing for improvements to the text.
“While the NRA has not taken a position on the SAFER Banking Act, we would strongly prefer Congress focus on providing robust protections for lawful firearm-related commerce against financial sector discrimination,” an NRA Spokesperson told POLITICO.
GOA, meanwhile, is opposed to the bill as it stands.
“The bill that was rushed out of committee, as written, not only is unproductive but … its protections actually can work against the firearm industry in some ways,” GOA’s Director of Federal Affairs Aidan Johnson said in an interview.
Right now the cannabis banking bill enjoys bipartisan support, has passed the House in some form seven times, and passed out of the Senate Banking Committee with votes for it on both sides of the aisle in October. But getting even more Senate Republicans on board with the bill has always been a goal of supporters, in hopes that it will create pressure to finally get a Senate floor vote and push the Republican-led House to act on it.
Some Republicans say the gun lobby’s lack of support could pose a problem for lawmakers currently on the fence or looking for a reason to vote against the bill.
“[Their position] makes it easier to say no,” Sen. Kevin Cramer (R-N.D.), a supporter of the cannabis banking bill, said on Wednesday. “If NRA came out in support of it … it’d be helpful,” Cramer added.
The operation choke point language — which would protect controversial businesses like gun sellers and other industries that Republicans say are discriminated against during Democratic administrations — was introduced to the cannabis banking bill by Rep. Blaine Luetkemeyer (R-Mo.) back in 2019 as a sweetener for conservatives.
In 2021, the late Rep. Don Young (R-Alaska) introduced the Gun Rights and Marijuana Act, to allow people who use marijuana in legal states to also possess a firearm — something currently illegal under federal law. In 2022, the GRAM Act was looped into a bipartisan deal around the cannabis banking bill that also included a bill to fund state-level expungements.
Right now, however, both of the major gun groups still want to see improvements made to the text of both bills. The NRA registered to lobby on the cannabis banking bill but has not taken a position on it.
While Republican backers of the cannabis banking bill would love the support of gun groups, however, lawmakers involved in the negotiations said the gun rights groups haven’t been a key stakeholder in the talks.
Luetkemeyer told POLITICO in November that he did not know if they’ve been in discussion with the gun lobby, and that there are “a number of different industries that are interested in the bill.”
Rep. Dave Joyce (R-Ohio), the lead Republican sponsor on the bill in the House, said Wednesday he has not recently spoken with gun groups regarding the SAFER Banking Act.
Gun groups have noticed. GOA said the fact that the bill progressed out of committee in the Senate reflects how lightly Republican lawmakers are taking his group’s concerns.
“They had not listened up until that point, enough, clearly,” said Johnson.
Johnson also pointed out that Luetkemeyer’s original language in the House did not do enough for GOA to get behind the bill.
“Some of the flaws that are present in the SAFER banking and SAFE Banking Acts are also present in the Luetkemeyer [bill],” Johnson explained.
This leaves Republicans in the position of deciding how hard they want to fight for gun lobby support. Negotiations over the bill have been ongoing for more than a year — and in 2023 pulled in conservative freshman Cynthia Lummis (R-Wyo) and Democrat-turned-independent Kyrsten Sinema (Ariz.).
Lummis who has referenced gun manufacturers repeatedly when discussing who the operation choke point language would assist, said Wednesday it would be useful if the groups got on board. Her office has been working to address some of the problems raised by GOA, but ultimately she believes the bill can stand on its own.
“I think that bill’s got a lot of momentum,” Lummis said. “I think that sometimes the perfect can be the enemy of the good. And the goal here is to make sure that the gun industry can continue to be banked.”
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Punchbowl News The Vault for 1/7/24: Rough rowing ahead for financial services policy
Buckle up, folks: It’s going to be a rocky few months for financial policy in Congress.
The twin government funding deadlines of Jan. 19 and Feb. 2, will keep appropriators plenty busy, even with the topline funding deal just reached. But senior banking lawmakers like House Financial Services Committee Chair Patrick McHenry (R-N.C.) are already warning their priorities will take center stage too. And McHenry won’t be alone.
News: Rep. Josh Gottheimer (D-N.J.) is leading a push for the House to take up anti-fraud language from the Senate’s Financial Services and General Government funding package.
In a draft letter we obtained to congressional leadership, lawmakers will back a provision that “directs the Treasury Department to lead a multisectoral whole-of-society effort” to counter financial fraud. This should give you a sense of just how much policy is still in the air as these bicameral negotiations loom.
Elsewhere on the Hill, top tax lawmakers are converging on a significant and bipartisan agreement to expand the child tax credit and revive certain business deductions. We have the latest on those talks down below.
What to watch in the funding talks:
Crypto market structure reform: The Financial Innovation and Technology for the 21st Century Act is the House Financial Services Committee’s marquee legislation this Congress. Sponsored by Rep. French Hill(R-Ark.), it’s bipartisan too, securing multiple Democratic votes in the committee.
But the changes proposed amount to the most serious rewrite of U.S. investment law since Dodd-Frank. Some crypto products could be exempted from federal securities regulations if they meet certain criteria. SEC Chair Gary Gensler believes nearly all crypto should be regulated like a security today.
Expect McHenry to continue going to the mat for market structure reform in the weeks ahead. We wrote quite a bit about how McHenry played hardball during the NDAA negotiations late last year in support of that bill. He’s made clear he intends to keep that up.
“I’ve shown that I can be a dealmaker,” McHenry told us. “But I’m not going to fold under pressure like they attempted to approach me on NDAA. My hope is that they learn from that.”
Fentanyl sanctions: The FEND Off Fentanyl Act was one of the NDAA’s highest-profile casualties. The bipartisan package cleared the Senate Banking Committee back in June, and by July, it had been added to the Senate NDAA on an 86-11 vote.
Advocates think the bill, aimed at a drug that’s ravaging American communities with an anti-China angle to boot, is a political no-brainer. That didn’t stop McHenry from scrapping it. But that also doesn’t mean there won’t be blowback if it doesn’t eventually pass.
“Republicans in the House talk about how opposed to all things China they are,” Senate Banking Committee Chair Sherrod Brown (D-Ohio) told us. “They had a chance to do FEND Off Fentanyl, and they’ve done nothing, saying, ‘Well, we’ve got to pass this industry crypto bill.’ It gets tiresome.”
For now, the fentanyl bill is attached to the emergency foreign aid package for Ukraine and Israel. That deal still hasn’t fully come together and is on shaky ground at best.
Outbound investment reform: Lawmakers want a new system for tracking where and how U.S. businesses are investing in “countries of concern,” including China. The idea is mostly organized around national security, focusing on emerging technologies like AI and quantum sciences.
But the effort, led by Sens. Bob Casey (D-Pa.) and John Cornyn (R-Texas), has hit a familiar roadblock.
McHenry and several other House Republicans are strongly opposed, arguing the Casey-Cornyn approach penalizes American enterprise for no good reason. They’ve got their own bill, an effort led by Rep. Andy Barr (R-Ky.).
This may get settled outside the government funding fights, like in a series of floor votes between the two competing bills.
Our take: We’re not bullish. The politics of funding the government are extremely messy right now. And that’s before you even get to the dynamics around financial services policy.
The reforms being pushed by the Senate are generally small — some new sanction authorities here, a new reporting requirement there. The House’s crypto package is a far more significant shift in the law.
The political support is also lopsided. While many of the Senate’s financial policy bills have overwhelmingly passed the chamber, the crypto market structure reform package hasn’t gotten a vote on the House floor yet.
The wildcard: McHenry has a lot of leverage here, as long as Speaker Mike Johnson continues to defer heavily to his committee leadership. What’s more, the North Carolinian is retiring after 2024. If this is McHenry’s last dance, we expect him to leave it all on the floor.