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2022-12-20
The nation’s biggest marijuana industry voices begrudgingly acknowledged on Monday what Capitol Hill insiders believed for weeks was inevitable: Joe Biden’s first two years in office will end without federal marijuana banking reform.
The industry reached that conclusion after learning a must-pass omnibus spending package would not include the SAFE Banking Act – the bipartisan-supported measure banning federal regulators from punishing financial institutions that provide accounts to state-legal marijuana firms.
A well-placed source and stakeholders confirmed late Monday the omission of the SAFE legislation, which passed the House of Representatives seven times, most recently in July.
Many Capitol Hill lobbyists and cannabis-industry boosters insisted the passage of SAFE was imminent, but without guaranteed support from at least 60 senators – the threshold to overcome Senate rules – the measure never went through the typical committee hearing process in the Senate.
Also, Senate Majority Leader Chuck Schumer didn’t call SAFE Banking to a vote.
Earlier this month, Schumer and other top Senate Democrats believed they’d hatched a deal to include such a so-called “SAFE Plus” package into the National Defense Authorization Act, the annual defense spending bill.
But that deal unraveled after a Republican revolt led by Sen. Chuck Grassley and Senate Minority Leader Mitch McConnell.
Grassley’s office released a memo in which the Justice Department reported enforcement concerns if SAFE Banking passed.
And McConnell said that his caucus was opposed to tucking the measure into an unrelated bill.
The Senate could still technically perform some unprecedented, unexpected and unclear last-minute acrobatics to get SAFE passed in this lame-duck Congress.
But with time running out and no deal in place, the cannabis industry admitted defeat Monday.
The apparent death of SAFE comes at a time when capital markets have dried up and both sales and wholesale prices are dropping fast in legacy states including Colorado and California – where lax enforcement also allows rampant illicit-market competition to flourish, choking out legitimate businesses.
‘Win for the illegal market’
Congress’ “failure” to pass SAFE Banking will cause the entire industry to “suffer,” even as new markets come online and adult-use legalization spreads to red states including Missouri and possibly Oklahoma as well as presidential bellwethers such as Ohio and Pennsylvania, Boris Jordan, co-founder and executive chair of multistate operator Curaleaf Holdings said in a statement Monday.
“The entire industry will suffer as a result of this failure,” he said.
“This is, sadly, a win for the illegal market, which pays no taxes and has no regulations or testing safeties in place.”
SAFE Banking’s ultimate failure is a bitter disappointment for the cannabis industry, coming after:
SAFE Banking’s ultimate failure is a bitter disappointment for the cannabis industry, coming after:
‘Missed opportunity’
But industry players on Monday signaled their dissatisfaction with the president and Senate Democrats such as Schumer even as they repeated a familiar line: Real progress is just around the corner.
“In failing to enact the SAFE Banking Act, the Senate 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,” Khadijah Tribble, the CEO of the U.S. Cannabis Council (USCC) and a senior vice president at Curaleaf, said in a statement.
“To say that we are disappointed is an understatement,” she added.
“But to assume the Senate’s inertia around cannabis banking reform dooms the entire cannabis industry discounts all of the headway we made this year.
“From the Biden administration announcing that it will conduct an official regulatory review of whether cannabis should be criminalized at all to the first standalone cannabis-related bill being signed into law to fund important research – 2022 will still mark the turning point in our fight to legalize cannabis.
“The USCC and our partners have built a movement to end cannabis prohibition that will continue in 2023, and I have no doubt we will eventually win.”
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