As members of the U.S. House of Representatives continue to advance the SAFE Banking Act despite sustained stalls in the U. S. Senate, will 2022 be the year it finally passes into law?
The SAFE Banking Act, which would provide banking access for cannabis companies and seeks to protect banks and other financial institutions that serve the industry, has had a bumpy ride since the bill was first introduced in 2019.
While the act is bipartisan in nature, it has faced strong opposition from Republicans. As a result, the act has been sitting in the Senate for the past three years without being taken up, despite having passed the House no less than five times.
In September, the bill’s language was added to the National Defense Authorization Act, but was subsequently removed in December 2021 amid opposition from influential Democrats such as Senate Majority Leader Chuck Schumer, Senate Banking Chair Sherrod Brown and Sen. Cory Booker. Notably, Schumer and Booker stand against passing the Act, because they believe it will lessen pressure on Congress to legalize or decriminalize cannabis.
Congress rarely holds more than one vote on the same issue in between elections, so under the one-vote theory, some believe that pushing the SAFE Act forward may thwart efforts to “pass a more comprehensive bill that also provides access to capital markets, fixes the onerous 280E tax treatment, expunges prior minor cannabis possession convictions and bar federal enforcement against states that have legalized,” according to analyst Jaret Seiberg.
Bill originator Rep. Ed Perlmutter, one of the first and most vocal allies of cannabis businesses in Congress, has stated that he will not run for reelection in 2022. Just weeks later, his bill was attached to the America Creating Opportunities to Meaningfully Promote Excellence in Technology (COMPETES) Act of 2022, which passed the House on Feb. 4.
Prior to passing the House for the sixth time, Perlmutter said that he’s been in talks about revising the legislation in a way that could lessen the concerns of Schumer and other colleagues. Perlmutter continues to zealously advocate for the bill, despite his looming end of tenure. Perlmutter intends to spend his remaining months in office pushing to get the bill passed, stating: “I’m gonna get that darn thing passed this year while I still serve out my term.” It remains to be seen what will come of these bicameral negotiations to revise the existing legislation into something that could be sent to the president’s desk.
The cannabis industry – and those connected to it – are in need of standard access to bank accounts and financial services from financial institutions. “Cannabis-related businesses – big and small – and their employees are in desperate need of access to the banking system and access to capital in order to operate in an efficient, safe manner and to compete in the growing global cannabis marketplace.
“The SAFE Banking Act is the best opportunity to enact some type of federal cannabis reform this year and will serve as the first of many steps to help ensure cannabis businesses are treated the same as any other legal, legitimate business,” Perlmutter said in a statement: “I’m glad to see it included in the America COMPETES Act and I will keep pushing to ensure it remains in the final package negotiated with the Senate.”
It remains to be seen if the bill will be able to pass the Senate before Perlmutter leaves office.
Thus far, the states have been leading the way in reforming laws, but as long as there remains a conflict with federal laws, it must be addressed on the national level. The SAFE Banking Act would provide greater clarity and legal certainty for financial institutions that choose to provide financial services to state-authorized cannabis-related businesses, as well as ancillary businesses that may serve cannabis businesses in states where such activity has been legalized.
One thing is certain, though, while he remains in office, Perlmutter is not giving up on the act, nor are the many cosponsors and advocates of the bill.
- Senior Attorney
Jennifer E. Walker is a Co-leader of Plunkett Cooney's Cannabis Law Industry Group and a member of the firm's Banking, Bankruptcy & Creditors' Rights Practice Group.
Ms. Walker focuses her practice primarily in the areas of cannabis ...
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