Marijuana Banking Sponsor Lays Out Plan To Advance Reform After Exclusion From Defense Bill, Sharply Rebuking Senate Blockade

The House sponsor of marijuana banking legislation said on Wednesday that following its lack of inclusion in the National Defense Authorization Act (NDAA) he will be immediately getting to work to attach the reform to pending omnibus appropriations legislation—though he added that he’s lost sleep over recent setbacks and has “unrepeatable” things to say about the Senate over their inability to advance the bill.

Rep. Ed Perlmutter (D-CO) made the remarks at a House Rules Committee meeting on Wednesday, where members took up the large-scale defense bill, which advocates and supportive lawmakers hoped would be used as the vehicle to advance the Secure and Fair Enforcement (SAFE) Banking Act but which ultimately omitted any cannabis language when it was posted on Tuesday.

Meanwhile, a key committee chairman said at the meeting that the Senate is just one vote shy of passing marijuana banking reform, though he also signaled that the next step is to pursue it through appropriations legislation.

It seems apparent that a key factor keeping the measure out of the NDAA was Senate Minority Leader Mitch McConnell (R-KY), who talked about opposing the effort to include SAFE Banking in the defense bill on Tuesday.

Emotions are charged over the banking reform issue on Capitol Hill. The bill could still advance this year, but the path forward is unclear, and hopes were high that NDAA would be the vehicle to finally get it done.

“One piece that I really wanted to add to this was the piece that [Perlmutter] has championed, which is the SAFE Banking Act, which I think is a crucially important piece of legislation,” House Armed Services Committee Chairman Adam Smith (D-WA) said at the Rules hearing on Wednesday.

Under the status quo of federal prohibition, the system is currently a “mishmash hodgepodge” in states that have legalized across the U.S., with some financial institutions showing willingness to service state-legal cannabis market while others remain fearful of facing federal penalties, he said. That contributes to the largely cash-only basis that these businesses operate under, making their enterprises and employees targets of crime.

Smith added that he believes “the process that Mr. Perlmutter and others championed made a huge difference because, as I understand it, right now there are 59 votes in the Senate to pass SAFE Banking.” The legislation as a standalone needs to reach a minimum 60-vote threshold to advance to passage.

“I will emphasize the SAFE Banking bill as a standalone piece of legislation is in the Senate,” the chairman said. “They can go ahead and take it up and pass it, so the effort to push it in this bill forced the question and got to 59—and we’re not done yet.”

“That bill can be brought up. The appropriations bills are coming, a [continuing resolution] is no doubt coming,” he said. “What we’ll do—and what I know Mr. Perlmutter would do and others—is go get that 60th vote.”

Perlmutter, who sits on the Rules Committee, gave a solemn statement about the setback at Wednesday’s meeting.

“We have a rule in the Perlmutter family: No bad news after dark unless you can do something about it,” he said. But unfortunately, he said, he received some bad news from Smith on Saturday and House Speaker Nancy Pelosi (D-CA) on Tuesday night. He implied that news was the exclusion of the SAFE Banking Act from NDAA.

“I didn’t sleep at all last night, either. But you all have done everything you can to keep this in and, obviously, it is not a defense piece of legislation. I appreciate that,” Perlmutter said. “The Senate—if I really told you what I thought, it would be unrepeatable and we’d all—I’d certainly get into trouble.”

“I’m not giving up on this darn thing yet,” Perlmutter, who is retiring at the end of this session, said, adding that he will need bicameral and bipartisan support “if we try to attach it to the appropriations bill.”

While the focus for NDAA was the key banking component, Senate Majority Leader Chuck Schumer (D-NY) is also working to finalize a package of modest reforms that’s expected to also contain expungements provisions.

Details of that package that lawmakers are negotiated have started trickling out this past week, including the potential inclusion of language on gun rights for marijuana consumers. It could make it into the appropriations omnibus legislation that Smith and Perlmutter discussed targeting on Wednesday, or it could be introduced and advanced as a standalone itself.

Talks over SAFE Plus have been intensifying in recent weeks, and they were complicated in part by a Justice Department memo to senators outlining concerns about marijuana banking reform that sources told Marijuana Moment have since been resolved. Key GOP senators met with DOJ to discuss the issues on Monday, Politico reported.

Schumer has dedicated significant time to negotiations over SAFE Plus, and the fact that Republicans reclaimed the majority in the House following last month’s elections added urgency to advancing some kind of cannabis reform during the lame duck session.

On Tuesday, Schumer responded to criticism from McConnell, who said on the floor that he was opposed to efforts by Democrats to attach marijuana banking and other “pet priorities” to NDAA.

“This is something, again, that’s had bipartisan support. We’ve been working with Republicans. It’s a priority for me,” Schumer said. “I’d like to get it done. We’ll try to discuss the best way to get it done.”

Sources have been telling Marijuana Moment for the past several months that lawmakers have been discussing adding to SAFE Plus language to protect Second Amendment rights for cannabis consumers by exempting people in legalized states from a federal restriction that bars any “unlawful user” of a controlled substance from owning a firearm. Politico reported on Monday that the current negotiated package does, in fact, include the Gun Rights And Marijuana Act (GRAM) Act.

Meanwhile, at the request of certain Senate offices, the Justice Department wrote a recently disclosed memo earlier this year outlining areas of the SAFE Banking Act that it identified as potentially problematic. While Senate sources said that those issues have been fixed in the latest language, some GOP senators arranged a meeting with DOJ on Monday to go over the concerns.

Those lawmakers who met with department officials were Sens. Pat Toomey (R-PA), Jim Inhofe (R-OK) and Chuck Grassley (R-IA), according to Politico.

Schumer had said in October that Congress was getting “very close” to introducing and passing the marijuana banking and expungements bill, citing progress he’s made in discussions with a “bunch of Republican senators.”

Sen. Cory Booker (D-NJ), meanwhile, said following the election that Democrats who want to enact cannabis reform must either do it “now” during the lame duck session or wait until “many years from now” when his party has a shot at controlling Congress again.

Booker previously opposed moving marijuana banking reform before Congress effectively ended prohibition with an eye toward equity. But he softened his position in recent months, becoming increasingly open to moving the incremental legislation.

For some advocates, support for the so-called “SAFE Plus” package will be largely contingent on the details of changes to the banking language, as they’re discontent with the current provisions that have passed the House in some form seven times now.

Specifically, they’d like to see the bill amended to provide funding for Minority Deposit Institutions (MDIs) and Community Development Financial Institutions (CDFIs) that lend commercial loans to minority-owned businesses.

They’re further called for changes to require banks that work with the cannabis industry to demonstrate non-discrimination in lending, as Supernova Women Executive Director Amber Senter wrote in a recent op-ed for Marijuana Moment.

These amendments align with some of the SAFE Banking Act recommendations that Cannabis Regulators of Color Coalition (CRCC) outlined in a paper sent to legislative leaders in August.

The Independent Community Bankers of America (ICBA), meanwhile, sent a letter to Senate leadership last week, calling for a floor vote on the SAFE Banking Act “without further delay” by the year’s end.

“This legislation enjoys strong, bipartisan support, would resolve a conflict between state and federal law, and addresses a critical public safety concern,” ICBA, which commissioned a poll demonstrating that support earlier this year, said. “We urge its enactment without further delay.”

Another poll released last week found that three in four American voters—including bipartisan majorities—support ending federal marijuana prohibition, expunging prior convictions and allowing banks to work with state-legal cannabis businesses.

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