Congressional Sources Confirm That The Federal Spending Bill Doesn’t Include Marijuana Banking!

Senate and House employees familiar with negotiations informed Marijuana Moment that marijuana banking reform would not be included in a massive budget measure likely to be issued as soon as Monday. Later, the news was confirmed by a Republican senator who had been lobbying for the cannabis change to be included.

At this time, it is unclear whether the omnibus appropriations legislation includes a number of other Marijuana and drug policy reforms that the House included in its versions of various spending bills earlier this year or whether it maintains a rider that has prevented Washington, D.C. from implementing a system of regulated, adult-use cannabis commerce.

For advocates of the Secure and Fair Enforcement (SAFE) Banking Act, this omnibus development is the second major defeat of the lame-duck session. After being left out of the NDAA earlier this month, appropriations were seen as a potential way to shield financial institutions that do business with state-legal marijuana enterprises. As Politico predicted, it didn’t work out that way.

One senior Democratic Senate staffer described Senate Majority Leader Chuck Schumer‘s (D-NY”last )’s ditch effort” to include cannabis banking reform in the omnibus as “a failure,” as negotiations ended last week without the measure’s inclusion. Advocates for SAFE Banking reform have few legislative alternatives in the remaining lame-duck session due to the absence of SAFE Banking language.

There is still a chance that the bill, or Schumer’s bigger SAFE Plus package, could be offered as a standalone; however, with only days left before Congress adjourned for the year, this appears like a remote probability at best. Marijuana banking, as well as ideas relating to expungements and gun rights for cannabis consumers, are all likely to be included in the SAFE Plus legislation.

Senate Republican leader Steve Daines of Montana, who has been a driving force behind the SAFE Banking Act, expressed disappointment that it was left out of the funding bill. He issued a statement saying that communities in Montana and around the country would remain susceptible to criminality in areas where lawful businesses were forced to operate in all-cash if his bipartisan “SAFE Banking Act” did not pass.

More than a year ago, I argued that if a bill I drafted to improve public safety had gone through the standard committee process, it would have had a much better chance of becoming law. We owe it to our local merchants, police, and citizens to do better. The next best chance for reform in a partisan Congress is in 2023, so most supporters will wait until then.

While the absence is disheartening to those who hoped for it, it is not shocking considering the previous statements made by both Democratic and Republican members. Although Schumer and House SAFE Banking sponsor Rep. Ed Perlmutter (D-CO) fought to keep the language in the bill, many other lawmakers made it clear that they expected the issue to be taken up by the incoming 118th Congress, which will see Democrats take over the Senate and Republicans take over the House.

Senate Minority Leader Mitch McConnell (R-KY) praised the removal of cannabis banking provisions from the NDAA earlier this month and urged lawmakers to apply the same standard to future spending bills. Sen. Sherrod Brown (D-OH), who chairs the Senate Banking Committee, said he didn’t expect cannabis banking to be an issue until 2023, but a staffer suggested last week that Brown would be willing to push for it as part of a funding bill if it included broader protections.

Representative Patrick McHenry (R-NC), who will lead the House Financial Services Committee in the 116th Congress, recently signaled that he shares the view that this is an issue that must be resolved after the lame duck. Despite his continued opposition to SAFE Banking, the congressman did not close the door on supporting the legislation if his Republican colleagues so desired.

What I’ve promised is an open procedure. I shared my thoughts with my group,” he stated. Every member of Congress has the right to form their own opinion on the law. It varies greatly from one state to the next. Sen. Cory Booker (D-NJ) has placed the blame on McConnell, arguing that the majority leader’s outspoken opposition to cannabis legalization has discouraged Republican senators who might otherwise vote for a bill containing SAFE Banking language from doing so.

Using marijuana as an example, he added that the Republican leadership was “dead set” against any policy change. To paraphrase, “That is the roadblock for me.” Those in authority inside his party’s caucus, he said, are “obviously against doing anything on Marijuana.” The Oregon Democrat who is leading the charge to bring the SAFE Banking Act into law this year, Senator Jeff Merkley, stated earlier this month that he will “keep pushing” to see the reform become law, adding, “this is not the end of the journey.”

Operating in cash “is an open door to robbery and money laundering,” so “we need to make sure that legal cannabis firms have access to the financial services they need,” he said. This was also emphasized in a recent study that investigated the causes and patterns of criminality against Washington State’s cannabis industry.

A Justice Department memorandum outlining potential unintended implications of the marijuana banking reform with regards to concerns like money laundering enforcement surfaced this month, creating tension in the midst of deliberations over military and spending legislation.

Last week, a group of Republican senators met with the Department of Justice to get their answers to questions they had about SAFE Banking. Although it had been reported by Marijuana Moment’s sources that the issues had been resolved, it is now apparent that McConnell and the other politicians were still unsatisfied.

In a statement released on Monday, Minority Cannabis Business Association (MCBA) Board President Kaliko Castille said, “While we are disappointed that the Senate was unable to pass this critical piece of legislation before the end of this Congress, we remain hopeful that the work we have been doing with our allies on the Hill to improve the final package will pay off when Congress reconvenes in 2023.”

To paraphrase from MCBA’s statement: “During our conversations with Senate staffers, it has been clear that we have support for amendments that MCBA has been advocating for, including adding safe harbor language to include Community Development Financial Institutions (CDFIs) and Minority Depository Institutions (MDIs), ending discrimination against cannabis entrepreneurs in Small Business Administration (SBA) programs, and adding language from the H.O.P.E.

Act to help state and local governments move forward.” We will continue to advocate for these reforms and welcome the opportunity to collaborate with legislators on all sides of the aisle to see them through to fruition. “Democrats have consistently promised action on cannabis over the last two years,” NORML Executive Director Erik Altieri said, “yet leadership consistently failed to prioritize and advance Marijuana reform legislation, including legislation to provide clarity to banks and to provide grant funding for state-level expungements efforts.”

“The failure of the Democrats and the persistent hostility of the GOP to make progress is out of line with voters’ opinion, is bad politics, and most significantly, is awful public policy,” he said. Because of the cash-heavy nature of the industry, which is the result of outmoded federal laws, state-licensed marijuana businesses,

the hundreds of thousands of people they employ, and the millions of Americans who patronize them will continue to be at a higher risk of the robbery until action is taken by Congress. Additionally, small businesses trying to get into this sector will continue to face intense competition from larger, more established firms.

The House and the Senate have reviewed and advanced a number of spending legislation this year, of which SAFE Banking is just one part. Other features of the preceding Act included shielding state marijuana programs from federal intrusion and lifting the congressional roadblock that had stopped Washington, DC from implementing a system of controlled cannabis sales for adults.

It is anticipated that the Senate would first review the omnibus appropriations measure before sending it to the House, where it will first be referred to the Rules Committee. A continuing resolution is slated to expire at the end of the week, so it’s possible that SAFE Banking might be submitted as an amendment, though it’s doubtful given the high-level negotiations that have taken place to get to this stage.

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