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Could SAFE Banking Act Pass this Lame-Duck Session?

Updated: Oct 29, 2022

With the November 8th midterms fast approaching, some cannabis banking advocates are seeing an opportunity for passage of the SAFE Banking Act, which would make it easier for cannabis businesses to use banking services and access loans. Historically, lame duck sessions have been a time when bills are pushed through by the majority.

The possibility of passage appeared more likely after October 6th, when President Joe Biden pardoned federal cannabis offenders charged with simple possession and instructed the Secretary of Health and Human Services and the Attorney General to rethink how marijuana is being classified.

Senator Cory Booker (D-NJ) addressed the changing political realities for SAFE on NPR on October 7th[1]. “[T]here are,” he said, “already conversations and dialogue going on about some kind of bipartisan movement because we see problems within the banking industry, and a lot of people who are winning licenses can’t get access to loans and more.” He continued: “So there’s a lot of folks who understand that we have to act on the federal level to do more than the president’s done, and I’m hopeful that this Congress, actually—in the lame duck after the midterms—I’m very hopeful we can get something done.”

Meanwhile, Rep. Ed Perlmutter (D-CO) told The Hill that prospects for the bill, which after ongoing negotiations is sometimes now referred to as “SAFE Banking Plus,” are looking rosier. “I think this thing’s going to get passed this cycle,” Perlmutter said, “so I’ve got my fingers crossed[2].”

On Perlmutter’s website, the problem that SAFE would help resolve is expressed succinctly: “… businesses that legally grow, market or sell cannabis in states that have legalized its sale are generally locked out of the banking system, making it difficult for them to maintain a checking account; access credit; accept credit and debit cards; meet payroll; or pay tax revenue.”

What Biden Signaled

Earlier this month, Biden pardoned all prior federal offenses for simple possession of marijuana, and he asked governors to do the same with regard to state offenses.

Biden also asked federal officials to review how marijuana is scheduled under federal law. Right now, he said, marijuana is classified in Schedule 1 of the Controlled Substances Act, the classification for the most dangerous substances. This means that marijuana shares the same classification as heroin and LSD, and has a higher classification than fentanyl and methamphetamine, which, Biden noted, “are driving our overdose epidemic.”

Biden’s full remarks are available here.

An October 12th news bulletin from law firm Foley & Lardner said that the administrative process of reclassifying marijuana is “perhaps the most significant takeaway” of President Biden’s statement.

“If and when marijuana is declassified,” wrote Foley, “it would remove the fear of federal prosecution and likely make banking more accessible[3].”

That said, industry observers note that the type of administrative review requested by the president could take years[4] to complete.

Another major law firm—Womble Bond Dickinson-- also commented on Biden’s recent statement and the future of cannabis banking.

“At a federal legislation level,” the firm wrote, “White House support may impact stalled marijuana legislation, such as the SAFE Banking Act, which would have significant impact on the cannabis industry by paving the way to greater access to financial institutions and services[5].”

Where SAFE Banking Stands

The SAFE Banking Act bill has already passed the House seven times in recent years before stalling in the Senate. In June 2022, for instance, it passed as an amendment to the FY23 National Defense Authorization Act. As a standalone bill, it passed the House by a vote of 321 to 101 on April 19, 2021; at that time, 106 Republicans supported it.

The SAFE Banking Act has the support of the American Bankers Association, the Independent Community Bankers of America, and the Credit Union National Association (CUNA[6]).

Some advocates for SAFE are attempting to get it included in this year’s defense bill, according to The Hill.

The upcoming lame duck session may appear to be a promising opportunity for this cannabis/banking legislation, and yet there are stumbling blocks. For one, the Senate doesn’t resume voting until November 14th. And at that time, a defense bill and a December deadline to fund the government loom as high priorities.

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