CFIG Cannabis Clips Week of Friday, July 28

Politico Pro Cannabis: COSPONSOR ALERT — The SAFE Banking Act has another cosponsor. Sen. Susan Collins (R-Maine) has signed on as a cosponsor of the legislation. She was previously a cosponsor of the bill in the last Congress. She helps to fulfill a request from Sen. Sherrod Brown (D-Ohio), who has asked for more Republican cosponsors to sign onto the bill before his committee holds a markup.

COLLINS BECOME EIGHTH GOP CANNABIS BANKING CO-SPONSOR — Sen. Susan Collins has signed on as a co-sponsor of the SAFE Banking Act, becoming the eighth Republican in the chamber to officially back the bill. Altogether there are 41 Senate co-sponsors of the cannabis banking bill, which Majority Leader Chuck Schumer has stated is part of the July work agenda.

Democrats have been imploring more Republicans to sign on as co-sponsors in order to show that there is sufficient support to clear the 60-vote threshold needed for passage. The bill has also run into turbulence recently over concerns from Sen. Jack Reed (D-R.I.) that it could create challenges for banking regulators seeking to crack down on fraud.

Politico Pro Cannabis: Weed banking hits new snags

BY NATALIE FERTIG, ELEANOR MUELLER | 07/13/2023 12:33 PM EDT

Senate Majority Leader Chuck Schumer said this week that cannabis banking legislation is a Senate priority for the July work session.

But behind the scenes, Republicans and Democrats are in a stalemate over details, effectively stalling the bill.

Republicans want Democrats to leave the text of the SAFE Banking Act alone — and avoid last-minute changes drafted by Sen. Jack Reed (D-RI) to narrow the scope of regulatory language in the bill.

Democrats, meanwhile, want Republicans to bring on more cosponsors to prove they can deliver enough supporters to pass the 60-vote threshold. Seven of the 40 cosponsors currently are members of the GOP.

“This is the threading of the needle part of this,” Sen. Kevin Cramer (R-N.D.), a cosponsor of the bill and a member of the Banking Committee, said on Tuesday. “Any little hiccup becomes a major problem.”

Both sides are frustrated by the stalemate, but neither seem ready yet to forge a compromise almost exactly 10 years after the bill was first introduced and four years after it first passed the House with more than 100 Republican votes.

If passed, the SAFE Act would make it easier for financial institutions to offer services like bank accounts and small business loans to companies in the cannabis industry. As the number of break-ins at cash-heavy dispensaries has grown in recent years, the bill has gained more support from Republicans and some law enforcement officials, who argue it is important for public safety.

“Senator Daines and Chairman Brown had an agreement when he reintroduced the bill, and now Democrats are demanding changes” a spokesperson for Sen. Steve Daines (R-Mont.) — the Republican spearheading negotiations on the bill with Schumer, Sen. Jeff Merkley (D-Ore.), Brown and others — told POLITICO this week. “Democrats keep moving the goalposts.”

A major contention point is Section 10, which originally was the text of Rep. Blaine Luetkemeyer (R-Mo.)’s Financial Institution Customer Protection Act. That bill was introduced in response to the Obama-era initiative called Operation Choke Point — which GOP lawmakers said unfairly targeted businesses like gun retailers and payday lenders. It was added to SAFE in 2019 as a sweetener for Republican lawmakers.

“That’s concerning to me,” Luetkemeyer said in an interview Wednesday. “This bill has been out there for a long, long time. … So I don’t know why we need to change it.”

That language has passed the House seven times as part of the SAFE Act, but this is the first time the Senate is giving the bill serious scrutiny. At a May hearing in the Senate Banking, Housing and Urban Development Committee, Reed raised concerns about this section. He told POLITICO this week that the language of Section 10 is too broad and wants it narrowed to only address cannabis. Reed has warned that it would make it harder for regulators to warn banks about risky customers. Consumer groups such as the National Consumer Law Center said it could slow attempts to crack down on fraud because it requires regulators to jump through hoops before they can warn banks.

Reed said he’s shared language with committee leadership in hopes of getting it incorporated into a draft — and lobbied colleagues to get them on board.

“I think some of the issues he’s raised are very legitimate and that we can address those,” said Merkley.

Two aides working on this bill — one Democrat and one Republican — both told POLITICO that Reed’s concerns are the main issue holding it up. The Republican aide, who is closely involved in deliberations about the legislation in the Senate, said that gutting section 10 would be a non-starter for Republicans. Two lobbyists working closely on the bill also told POLITICO they believe Republicans will walk if there are changes to section 10.

The Democrat aide working on this legislation said the concerns extend beyond the upper chamber: Senate Republican support is crucial to convincing the Republican-led House to take the bill up if it does pass the Senate.

Cramer said Tuesday he is willing to consider minor changes.

“I’d be open to that,” said Cramer — who is not a key negotiator on the bill, despite being a longtime supporter. “I’d rather see something than nothing.”

It all comes down to Reed, a lawmaker with a good deal of influence among his Democratic colleagues. When pressed, he did not answer directly whether leaving Section 10 as it is would trigger a no vote from him in committee.

“The cannabis legislation makes a great deal of sense,” said Reed, whose home state launched a recreational marijuana market in December. “Chairman [Sherrod] Brown is working awfully hard to get this thing done. He’s working with Senator [Tim] Scott, and I recognize that effort.”

Reed floated the idea that he could suggest an amendment on the floor if his push for changes in committee did not pan out.

But Reed’s tweaks aren’t the only issue.

Brown told POLITICO on Tuesday that he wants Daines and the other GOP cosponsors to get more of their colleagues to sign on the dotted line.

“We’re not going to take a bill to the floor and have [Minority Leader Mitch] McConnell undercut it with 58 or 59 votes,” Brown said. “If they’re serious, they co-sponsor.”

Sen. Elizabeth Warren (D-Mass.), who also serves on the committee, said in a separate interview that she supports Brown’s effort to bring more Republicans on board publicly. Any bill that can get “through the Senate right now takes extensive bipartisan support,” she said.

Brown’s concerns come on the heels of a different failed cannabis bill: the VA Medicinal Cannabis Research Act, which fell two votes short of passing a key procedural vote in April. The vote surprised supporters of the legislation, which was part of a package of five veterans bills that had bipartisan support. Even one cosponsor of the research bill, Sen. Todd Young (R-Ind.), voted against the cloture vote because he objected to the lack of an amendment process. The failed vote made a lot of Democrats and some Republican supporters of cannabis legislation on the Hill more nervous about weed bills in general.

A spokesperson for Daines said there are enough Republican votes to get SAFE passed.

Sen. Rand Paul (R-Ky.), a long-time cosponsor of the bill and one of the lawmakers involved in negotiations since last year, agrees: “I think we have over 60 votes,” he said on Tuesday but added “Who they are, I’m not sure.”

Merkley, meanwhile, said he is optimistic there’s a path forward for the bill. The possibility of a July markup, however, did not receive as much of his optimism.

“I really want to see it happen in July,” he said Tuesday. “But you’ve been around the Senate.”