Marijuana Financial Reform Fallen in Congress As Business Interests Seethe!

Big names in the marijuana business have admitted what many on Capitol Hill have known for weeks: Joe Biden’s first term as vice president will finish with no federal marijuana banking reform. The SAFE Banking Act, which has bipartisan backing and prevents federal regulators from punishing banks that give accounts to state-legal Marijuana firms, was left out of a must-pass omnibus budget deal, leading the sector to this conclusion.

Late on Monday, a reliable source and industry players verified to MJBizDaily that the SAFE Act, which has been approved by the House of Representatives seven times (most recently in July), had been left out. Cannabis Moment was the first to report the news. Although many advocates for the cannabis industry and lobbyists on Capitol Hill believed passage of SAFE was near, the bill was never heard in a Senate committee because it lacked the 60 votes necessary to overcome procedural hurdles.

The Majority Leader of the Senate, Chuck Schumer, also failed to bring SAFE Banking to a vote. Montana Senator Steve Daines, one of the bill’s eight Republican co-sponsors, stated, “Our small businesses, law enforcement, and communities deserve better.” To Daines’s comments, “had both parties been able to mark up the bill in committee, the SAFE Banking Act would have been well positioned to pass” the Senate.

However, no compromise language, such as bundling banking reform with criminal-record expungements or even clarifying gun-possession rights for medical cannabis patients, ever appeared in the Senate, despite Democratic Sen. Corey Booker’s summer 2021 threat to withdraw his support of business-first measures such as SAFE Banking that do not have social justice components.

Schumer and other prominent Senate Democrats thought they had struck a compromise earlier this month to include a so-called “SAFE Plus” package in the National Defense Authorization Act, the yearly defense budget bill. But a Republican revolt led by Senator Chuck Grassley and Senate Minority Leader Mitch McConnell tore apart that agreement.

The Justice Department expressed worry about the implementation of SAFE Banking in a memo released by Grassley’s office. In addition, McConnell stated that his party would not support including the amendment in a separate bill. The Senate may theoretically pull off some last-minute acrobatics to approve SAFE in this lame-duck Congress, but the likelihood of this happening is extremely low.

Without an agreement in place, the cannabis sector conceded defeat on Monday. At a time when funding sources have dried up and sales and wholesale prices are rapidly falling in legacy states like Colorado and California — where lax enforcement also allows rampant illicit-market competition to flourish and suffocate legitimate businesses — SAFE appears to have died a natural death.

A Triumph for The Black Market

Even if new markets come online and adult-use legalization spreads to red states like Missouri and maybe Oklahoma as well as presidential bellwethers like Ohio and Pennsylvania, the entire sector will “suffer” because of Congress’ “failure” to implement SAFE Banking.

In a statement released on Monday, Curaleaf Holdings co-founder and executive chair Boris Jordan discussed the company’s plans to expand into multiple states. He predicted that the entire business sector will be negatively impacted by the collapse.

The black market benefits since there are no laws or testing safeguards in place, and there are no taxes collected. For the Cannabis sector, SAFE Banking’s final failure is particularly disheartening because it follows:

  • The House has unanimously approved this bill on multiple occasions.
  • Senate Democrats, led by Schumer, made marijuana reform—and SAFE in particular—a top goal.
  • White House support for marijuana liberalization was signaled by Vice President Biden.

Biden approved the first government review of marijuana’s classification since Richard Nixon in October, and he recently signed a bill into law that will legalize and fund more research into the drug.

‘Missed Opportunity

Although they reiterated the president and Senate Democrats like Schumer’s frequent phrase that “real progress is just around the bend,” industry players sent a signal of unhappiness with the two on Monday. Khadijah Tribble, CEO of the U.S.

Cannabis Council (USCC) and senior vice president at Curaleaf, said in a statement that the Senate had “missed an opportunity to pass one of the rare pieces of legislation that has the support of both Republicans and Democrats, along with the majority of the American people” by failing to enact the SAFE Banking Act.

An understatement would be to say that we are disappointed, she continued. “But to assume the Senate’s lethargy around cannabis banking reform dooms the entire cannabis sector” is “to assume the Senate’s inertia around Cannabis banking reform dooms the entire cannabis industry”

Whether it’s the Biden administration’s announcement of an official regulatory investigation into whether or not cannabis should be criminalized at all or the signing of the first stand-alone cannabis-related measure to support crucial research, 2022 will be a watershed year in the struggle to legalize cannabis. There is no question in my mind that the USCC and our partners will succeed in their efforts to remove cannabis prohibition by 2023.

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