Cannabis News of Note for the Week:
Green Market Report: SAFER Banking Act Approved by Senate Committee
Cannabis Wire: More crystal ball observations on SAFER, this time from Sen. Cramer (paywalled, full text below)
Politico Pro Cannabis: Weed banking’s next big hurdle: criminal justice reform (paywalled, full text below)
Punchbowl News AM: The road to weed banking is getting shorter — and bumpier (newsletter, full text below)
American Bankers Association: ABA Statement on SAFER Banking Act
Credit Union National Association: Senate Banking Committee passes cannabis banking bill
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Cannabis Wire: More crystal ball observations on SAFER, this time from Sen. Cramer (9/29/23)
North Dakota Sen. Kevin Cramer said a mouthful on Meet the Press this week when he talked about both the positioning of SAFER for Republicans, and also its prospects in the full Senate and House.
“I’m not a fan of cannabis legalization. I oppose it vehemently, but I think the more you oppose cannabis legalization the more you should want SAFE Banking. If you say ‘I don’t like this industry…but it should be a cash only industry.’ That makes it worse. Having the regulated banking industry doing the financing, handling the checking accounts and credit cards really put parameters around the industry,” Cramer said.
Sen. Steve Daines called SAFE a “public safety bill” earlier this year, and Republicans have really coalesced around that argument.
But what I found particularly interesting was when Cramer alluded to how tenuous all of it is.
“I think we negotiated a pretty fragile balance here that will have momentum to get 60 votes in the Senate. I think it’ll do well, if not better on the floor than it did in the committee,” Cramer said.
Cramer added that the “House probably would want to do something different with it. I’m quite confident they will.”
Then, Cramer mentioned Section 10, the area of the bill that we expect to prompt a decent amount of airtime during the floor discussion, because some Republicans don’t think the proposed language goes far enough.
“Let’s get two bills and put them together and negotiate the details, but I’m confident that we can get it done this Congress. […] I think this bill restricts the government’s oversight, in some respects. It doesn’t restrict their oversight so much as the way they can enforce certain things. For example, while we allow safe banking of cannabis, state by state depending on the legalization in particular states, we also protect other industries such as fossil fuels, firearms, industry, munitions, other out of favor industries from bank over regulation, particularly from the regulators themselves that cannot use reputational risk as a dispositive objection,” Cramer said.
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Politico Pro Cannabis: Weed banking’s next big hurdle: criminal justice reform
BY NATALIE FERTIG | 09/28/2023 05:31 PM EDT
Supporters of a cannabis banking bill that passed a key hurdle on Wednesday are already looking to a floor vote that will bring new challenges to the beleaguered legislation.
The bill, which would expand protections for banks who want to offer services to the cannabis industry, was approved by the Senate Banking Committee on Wednesday by a bipartisan majority. But additional amendments, further changes to regulatory language and an impending battle over criminal justice reform lay in its path to Senate passage.
The bill’s next big hurdle emerged Wednesday: Sen. Raphael Warnock (D-Ga.) voted against the bill in committee — the only Democrat to do so — over concerns that it would only increase the racial wealth gap. During the markup, an amendment he brought up that would add additional criminal justice reform language to the banking bill was rejected by a vote of 3-20.
Criminal justice reform has always been a major debate on this bill, and last week Majority Leader Chuck Schumer promised to bring up a bill to fund cannabis record expungements at the state and local level as an amendment when it goes to the floor. There are already worries that the bill could chase away conservative Republicans in both chambers. But progressives, led now by Warnock, are gearing up to get that language expanded — a step that could further complicate delicate negotiations.
“I worry if we do this without broader reform, it’s a step back,” Warnock said after the markup, calling the expungement funding bill “not nearly enough.”
Sen. Steve Daines (R-Mont.), the lead Republican on the bill, brushed aside Warnock’s ability to derail the deliberations with his new concerns by pointing to the low support his amendment got in committee.
Sen. Mike Rounds (R-S.D.) — who opposes the entire bill — said he doesn’t think the legislation leaves the Senate, especially “if they’re planning on adding additional items in to expunge criminal backgrounds.”
But Sens. Elizabeth Warren (D-Mass.), Cory Booker (D-N.J.), Jon Tester (D-Mont.) and Chris Van Hollen (D-Md.) all told POLITICO they support the issues Warnock raised, and Warren and Van Hollen voted for his amendment in the markup.
After more than a year of serious negotiations in the Senate that have exhausted many a staffer and lawmaker on the issue, it remains to be seen how far that support will stretch. Booker recently signed on as a co-sponsor to the banking legislation after obtaining the promise from Schumer (D-N.Y.) to bring it up with the expungement funding amendment. And over the past few years, Warren consistently stood committed to the banking bill while Booker pushed for more equity language.
The debate may hinge on states with legal cannabis industries: All four Democrats supporting Warnock represent states with legal marijuana industries. Some of those states have awarded equity licenses to people who have been impacted by the war on drugs and who need access to capital to open their cannabis businesses. Warnock’s state of Georgia, however, does not have a legal weed industry.
Work is already underway on the criminal justice reform provisions promised by Schumer. The HOPE Act is a bipartisan House bill led by Reps. Dave Joyce (R-Ohio) and Alexandria Ocasio-Cortez (D-N.Y.). That would create grant funding for states and localities that wish to expunge nonviolent cannabis-related criminal records. Schumer promised in a statement last week to bring it up as an amendment, and Ocasio-Cortez confirmed Wednesday that she and the leader have spoken about the bill.
“We’re just trying to game out what is the fastest approach,” she told POLITICO on Wednesday. AOC said Warnock brought up some good points in the markup but added “that’s where I think the legislative strategy is really the part that we’re in conversation about.”
At the same time, Senate and House Republicans are expected to continue to hash out differences between regulatory language in the two bipartisan versions — with more alterations probable — and an emerging coalition tries to plug holes in the text that could enable international drug cartels.
Even despite last-minute Senate amendments to remove a handful of lines and provisions from the text, House Republicans are still not pleased with the bill. “In its current state, the SAFER Banking Act will not make it through the House,” said Rep. Blaine Luetkemeyer (R-Mo.), who crafted the earliest iteration of the language when the bill first progressed through the House in 2019.
Sen. Kyrsten Sinema (I-Ariz.) confirmed to POLITICO there will “probably” be more changes on these sections to the bill on the floor.
“We have a little more work to do,” she said in an interview. “I’m confident we’ll get there.”
As the Senate gains momentum toward the first floor vote on a non-research cannabis bill in more than 50 years, more amendments and add-ons will be thrown in the mix. Tester on Wednesday told POLITICO he will put forth his veterans marijuana research bill as an amendment. The bill surprised many by not overcoming a procedural vote in April that would have put it up for a floor vote.
Sinema, Sen. Bill Hagerty (R-Tenn.) and Sen. Catherine Cortez Masto (D-Nev.) also agreed during Wednesday’s markup to work on an amendment to close loopholes that could be used to allow the illicit drug industry to launder money.
“More than half the fentanyl that comes into the country comes through the Arizona-Mexico border, so this is a big problem for us,” Sinema said after the markup.
Eleanor Mueller contributed to this report.
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Punchbowl News AM (9/28): The road to weed banking is getting shorter — and bumpier
The Secure and Fair Enforcement Regulation Banking Act cleared the Senate Banking Committee Wednesday on a bipartisan vote.
It’s a significant milestone for the cannabis sector. This was the first time that the Senate has taken any formal vote on cannabis banking reform after more than a decade of advocacy.
But already, the politics surrounding the high-profile issue are starting to get tougher to manage. Progressives and conservatives are pulling hard (and in opposite directions) to expand the bill’s scope. The bigger this bill gets, the harder it will be to meet the Senate’s 60-vote threshold on passing anything of substance.
It was never going to be easy to get SAFER Banking through the Senate, but the challenges are cropping up fast.
Progressives want more: Sen. Raphael Warnock (D-Ga.) was the lone Democratic vote against the package on Wednesday, and his opposition was stark.
But many progressives aren’t exactly comfortable with a bill that, on its face, does more for banks and weed investors than any other bloc. Sen. Chris Van Hollen (D-Md.) all but threatened to vote against the bill on the floor unless there’s also a vote on the HOPE Act, which would help fund nonviolent weed expungements.
And Sen. Elizabeth Warren (D-Mass.) told us in an interview after the markup that “now is the time to push for racial justice.”
Waning Republican support: Three GOP members of the Senate Banking Committee supported cannabis banking Wednesday. That’s not bad, but advocates of the reform were hoping for a better showing.
Sens. Steve Daines (R-Mont.), Cynthia Lummis (R-Wyo.) and Kevin Cramer (R-N.D.) backed the bill. But lobbyists tracking these negotiations had hoped to pick up other committee members, including Sens. Thom Tillis (R-N.C.) or Katie Britt (R-Ala.).
It didn’t happen, and that gives Senate Majority Leader Chuck Schumer a smaller runway to deliver on cannabis reform. That’s making some proponents nervous.
Conservatives (also) want more: A key conflict for lawmakers in the weeks leading up to the markup was over Section 10 of the bill, which would crack down on regulators’ ability to discourage banks from working with certain businesses.
House Republicans have already made clear they’re not jazzed about the Senate’s approach for not going far enough. Rep. Blaine Luetkemeyer (R-Mo.) said in a statement Wednesday night he believed the SAFER Banking Act would still give regulators “broad discretion” to close the accounts of controversial causes.
“In its current state, the SAFER Banking Act will not make it through the House,” Luetkemeyer said.
Republican senators off the Senate Banking Committee will also introduce wrinkles of their own when the bill makes it to the floor.
We’re told that Sen. Ted Cruz (R-Texas) plans to introduce an amendment that would expand the Section 10 language beyond regulators to banks and other financial institutions themselves. That’s part of a broader focus from Republicans on the Senate Commerce Committee on how some banks may have pressured other businesses into terminating relationships with gun manufacturers in Texas.
ICYMI: The second edition of The Vault, our quarterly financial services newsletter, landed Wednesday. It features an exclusive interview with New York Department of Financial Services Superintendent Adrienne Harris, a look at how Wall Street is betting on Washington and more. Follow this link to read the full edition.
— Brendan Pedersen