DOJ's Concerns Over Marijuana Banking Act Complicating Law Enforcement Operations Seem Resolved

The Department of Justice issued a memo to congressional leaders regarding the Secure and Fair Enforcement Banking Act of 2021 (SAFE Banking Act) indicating its concerns about the bill. According to the department, the language in the initial House bill “could significantly complicate law enforcement investigations and prosecutions,” as first reported Punchbowl News.

The outlet also noted that the memo was actually requested by Senate Republicans.

Marijuana banking legislation aims to permit regulated financial institutions to safely work with marijuana companies with legal cannabis programs. For Senate Majority Leader Chuck Schumer, this cannabis banking reform remains among the highest priorities in the administration's lame-duck session. Many industry experts and analysts believe the bill has a chance at this point.

DOJ’s Concerns

Among the biggest concerns highlighted in the DOJ’s memo include the following:

The lack of precise language when describing “legitimate” cannabis companies, which “could create an immunity shield around activities of cannabis businesses that involve other illicit drugs or activities.” Adding that “the bill could therefore be read to immunize a state-legal marijuana business that is also engaged in fraud, for example, or one whose marijuana business includes both state-legal and state-prohibited conduct.”
The proposal does not address some important questions about the implications of anti-money laundering laws.
The DOJ also noted that the SAFE Banking Act doesn’t highlight financial institutions’ responsibilities to confirm a marijuana company’s compliance with state laws under common anti-money laundering statutes. The bill says “nothing about how states will determine compliance with state law or what happens when state laws conflict,” especially around marijuana transport.

Optimism Present

According to the email obtained by Punchbowl News, a DOJ official said that with some minimal changes, the agency “believes it can effectively implement the legislation.”

In the meantime, Axios reported that a group of bipartisan senators is planning to attach the SAFE Banking Act to a “must-pass” year-end bill, like National Defense Authorization Act.

The outlet also received an email confirmation from the DOJ that it would be able to implement the revised legislation, the one that is the result of the pairing of two bills – SAFE and the Harnessing Opportunities by Pursuing Expungement (HOPE) Act, a bipartisan bill introduced by Reps. Dave Joyce (R-Ohio) and Alexandria Ocasio-Cortez (D-N.Y.) last December would set up a “State Expungement Opportunity Grant Program” through the U.S. Department of Justice to reduce states’ costs for processing expungements.

The idea is that the legislation will garner support from both conservative and progressive Congress members.

Just a couple of weeks ago, Schumer met with Senate Banking Chairman Sen. Sherrod Brown (D-Ohio), Sens. Steve Daines (R-Montana) and Jeff Merkley (D-Oregon), among other legislators, to talk about the SAFE Banking Act.

Lawmakers said they were making an effort to find common ground between Republicans and Democrats.

“We’re serious. We want to do this,” Sen. Brown said. “I’m actually fairly optimistic and hopeful that we will come to an agreement.”

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