Senators push for cannabis banking legislation in competition bill

Dive Brief:

A bipartisan group of two dozen senators wrote the majority and minority leaders of both chambers of Congress on Thursday, urging them to include cannabis banking provisions in the final text of the America COMPETES Act.
Nineteen Democrats and five Republicans, led by Sens. Jeff Merkley, D-OR, and Jacky Rosen, D-NV, are asking to keep the Secure and Fair Enforcement (SAFE) Banking Act in the manufacturing and innovation legislation aimed at boosting the U.S.’s competitiveness with China.
Lawmakers have tried to fold SAFE Banking into larger pieces of legislation in the past. After failing to gain support as a stand-alone bill, SAFE Banking proponents thought to use the 2022 National Defense Authorization Act (NDAA) as a vehicle to pass the legislation. Cannabis banking provisions were ultimately left out of the text.

Dive Insight:

SAFE Banking, introduced in 2013 by Rep. Ed Perlmutter, D-CO, has passed the House six times, most recently as an amendment to the bipartisan competitiveness bill. But the legislation, which has garnered wide support from cannabis industry advocates and banking trade groups, has failed to gain similar approval in the Senate.

Additionally, SAFE Banking appears to be losing its chief advocate come January. Perlmutter has said he won't seek re-election this year.

“[T]he cannabis industry has become a powerful job creator and a significant generator of tax revenue,” lawmakers wrote in Thursday's letter. “Enacting the SAFE Banking Act via the jobs and competitiveness legislation before us would support a rapidly growing industry that creates jobs, fosters innovation, supports small businesses, and raises revenue in states that have chosen to legalize cannabis, while reducing safety risks to industry employees and the public alike.”

Both chambers of Congress are set to discuss the final bill over the coming weeks.

With the majority of banks hesitant to open accounts for cannabis businesses, the industry operates largely in cash, causing security and operational challenges for the sector. Allowing legal cannabis-related firms to access bank accounts without federal reprisal would address public safety and compliance challenges and help reduce cash-motivated crimes, the lawmakers wrote.

Thursday’s letter puts significant Senate support behind SAFE Banking, but the chamber has become a roadblock to the bill’s progress on several occasions.

SAFE Banking stalled in the Senate in 2019, when the chamber's former Banking Committee chair, Mike Crapo, R-ID, refused to hold a hearing on the bill.

Democrats, historically, have been more open to cannabis-related bills, but a push for more comprehensive reform stymied efforts to pass SAFE Banking under the current Democratic-controlled Senate.

Before trying to fold SAFE Banking into the 2022 NDAA, House Democrats aimed to include it in two COVID-19 relief bills last year, but the language was not included in the bill President Joe Biden signed in March 2021.