The SAFE Banking Act has languished in Congress since early 2017, a victim of political gridlock and division, as well as political wrangling over broad approaches to cannabis legalization. We last covered the SAFE Banking Act in February, when it looked as though 2022 would be the sixth year in which this bill would die.
Since then, the bill has been showing new signs of life, though for the most unfortunate reasons. As we’ve covered, cannabis dispensaries are facing an epidemic of robbery from coast-to-coast. The lack of access to the traditional financial sector, and the need to do business in cash, makes dispensaries a prime target. The continued and mounting safety concerns have put pressure on industry officials and policymakers at all level to come up with a solution.
A bipartisan group of Senators in Washington, DC now supports passage of the Safe Banking Act, including in particular Senators from the Pacific Northwest, including Patty Murray (D-Wash.), Jeff Merkley (D-Ore.), and both of Montana’s Senators, Steve Daines (R-Mont.) and Jon Tester (D-Mont.). Nine Republican Senators now co-sponsor the Act, approaching the ten Republican votes needed to overcome a potential filibuster in a 50-50 Senate. The sudden shift in Republican support has followed the wave of recreational and medical legalization or decriminalization in over a dozen states since 2020, including a number of Republican strongholds, as well as the support of the American Bankers Association and state banking associations, representing the financial industry.
Ironically, the sudden increase in support for the SAFE Banking Act has reversed the longstanding political lines on federal cannabis legalization. Long-time advocates for legalization and restorative efforts to address the impact of the War on Drugs— such as expungement of past criminal convictions for cannabis offenses–are now concerned that the Act may represent a giveaway to the financial industry that not only fails to address equity issues, but undermines future efforts at broader reform. For example, Sen. Cory Booker (D-NJ), previously a co-sponsor of the Act in 2018, pledged last year to “lay myself down” in the Senate chamber to prevent passage of the Act without equity or criminal justice provisions.
The Safe Banking Act also faces headwinds from a cramped legislative calendar in an election year, in which legislation that fails to pass by the August recess is generally considered dead as DC’s focus shifts to the upcoming November midterm elections. Proposals to include the Act in broader legislation, such as the bipartisan-supported COMPETES Act focused on trade, would also face traditional Republican aversion to unrelated add-ons in large legislative packages.
Nevertheless, the shift in fortunes for the SAFE Banking Act, which after five years may have enough support to have a realistic chance of passage either in this or a future Congress, demonstrates the slow but steady progress of cannabis reform nationwide. Hopefully, access to mainstream financial institutions will come for the industry soon, both for the sake of business development as well as public safety.
For our previous coverage of this bill, check out the following: