Lawmakers opted not to put cannabis reform in the National Defense Authorization Act (NDAA) defense bill.
This means that under the existing federal law, financial institutions are still not allowed to provide their services to marijuana businesses even in states with legal cannabis programs.
Whether Secure and Fair Enforcement Banking Act of 2021 (SAFE Banking Act), which supports expungements and other reform legislation, can pass in 2022 remains to be seen as some observers remain optimistic.
See Also: High Tide CEO On M&A, New Products And 3 Factors Holding The Cannabis Stock Back
Pot companies must rely on cash to operate, which makes them ideal robbery targets. Also, the lack of financial services (i.e., loans) makes it difficult for smaller operators to enter the burgeoning industry.
"While it’s disappointing the Senate failed to include cannabis banking and restorative justice reforms in the NDAA, we are confident that the majority of Senators are committed to enacting a bipartisan version of SAFE Plus by the end of this year,” U.S. Cannabis Council CEO Khadijah Tribble stated. “Thus, we remain optimistic that we’ll see cannabis reforms appear in another legislative vehicle in the coming weeks. USCC will continue fighting for federal cannabis banking laws that reflect the reality on the ground and will make our industry more competitive, diverse, and secure for the communities we operate in.”
In the meantime, updates on the SAFE Plus package have been reported, such as one that could possibly include language on gun rights for cannabis consumers. Over the last couple of months, Marijuana Moment reported that lawmakers are negotiating the inclusion of provisions that would protect Second Amendment rights for marijuana users, by exempting people in the legalized states from a federal restriction.
According to Politico, the current package contains the Gun Rights and Marijuana Act (GRAM Act).
The Department of Justice (DOJ) recently issued a memo to congressional leaders explaining that the language in the SAFE Banking Act “could significantly complicate law enforcement investigations and prosecutions,” per Punchbowl News.
The outlet also noted that the memo was actually requested by Senate Republicans.
Nevertheless, these issues seem to have been resolved. 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.”
The negotiations on the bill culminated on Tuesday when Senator Mitch McConnel blasted Democrats over a proposal to include cannabis reform in the defense bill.
McConnell called on Senate Majority Leader Charles Schumer and House Speaker Nancy Pelosi to strip the pot-related language from the defense bill.
“House and Senate Democrats are still obstructing efforts to close out the NDAA by trying to jam in unrelated items with no relationship whatsoever to defense,” McConnell said on the Senate floor. “My colleagues across the aisle need to cut their unrelated hostage-taking and put a bipartisan NDAA on the floor.”
Schumer responded, “This is something, again, that’s had bipartisan support. We’ve been working with Republicans. It’s a priority for me. I’d like to get it done. We’ll try to discuss the best way to get it done.”
McConnell is not the only senator who thought that adding marijuana banking reform to the NDAA is not a good idea. Republican Senators Jim Inhofe and Kevin Cramer seem to be on the same page when it comes to this debate. For example, Inhofe said he would “vote against my own bill” if it included unrelated items like marijuana banking, and Cramer, who is a co-sponsor of the SAFE Act said he doesn’t support passing the reform this way.
Is All Hope Gone?
The bill still has a chance of advancing as part of a different omnibus appropriations bill, or perhaps as a standalone in a lame-duck session. In fact, many industry experts have been hopeful about seeing the SAFE Act pass including financial analyst Pablo Zuanic of Cantor Fitzgerald, but also politicians such as Democratic Representative Ed Perlmutter of Colorado, who recently shared his optimism on the issue.
If this is going to be the case, we’ll see very soon, considering that lame-duck is nearing its end.
Photo: Courtesy of Mikhail Nilov
© 2023 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
BENZINGA CANNABIS CONFERENCE
Meet the biggest cannabis industry players and make deals that will push the industry forward.
Featuring live company presentations, insider panels, and unmatched access to networking, the Benzinga Cannabis Capital Conference is where cannabis executives and entrepreneurs meet.
Join us April 11-12, 2023 at Fontainebleau Miami Beach in sunny Florida.