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SAFER Banking Act Clears Senate Committee

NCIA (and myself personally!) have been talking about the SAFE Banking Act for years. 

After the Senate Banking Committee’s hearing on the topic of financial services and the cannabis industry in May, it became clear that in order for the bill to continue on in the legislative process and receive a markup that changes to a few sections needed to be made. 

As a result, a slightly new (and improved?) version of the bill was introduced as the SAFER (S. 2860: Secure and Fair Enforcement Regulation) Banking Act last month. Most of the changes in the bill pertained to Section 10, which bars federal banking regulators from taking discriminatory enforcement action against any industry (not just cannabis). 

Once SAFER was formally introduced, the Senate Banking Committee announced that a markup was scheduled for September 27. It’s important to note that this was the first time ever that a Senate committee held a markup on a pro-cannabis bill. 

During the markup session, multiple amendments were offered. The first, offered by Chairman Brown (D-OH) was what’s known as a “manager’s amendment” and primarily made technical changes to the bill. That amendment also made changes so that the Treasury secretary would be given one year (instead of 180 days) to issue updated guidance to financial institutions that work with cannabis businesses that was first released during the Obama administration in 2014. It also stipulated that federal home loan banks are now included under a list of financial institutions that would be protected from being penalized by federal regulators simply for working with state-legal cannabis businesses.

Another amendment, from Sen. Warnock (D-GA) would have created a 5-year sunset for the legislation unless a report from the Treasury Department certified that it had decreased the racial wealth gap and ameliorated other negative economic impacts of the war on drugs. This amendment ultimately failed. 

Additionally, amendments from Senators Hagerty (R-TN), Rounds (R-SD), Crapo (R-ID) were also offered but were ruled out of order, withdrawn, and failed, respectively.

Republican members of the committee voiced concern that the bill allowed for financial institutes to utilize reputational risk to de-bank certain accounts they do not align with ideologically and argued that no financial regulator should be able to pressure any financial entity to refuse to provide service to a lawful entity.

Some Democrat members, particularly Sen. Warnock (D-GA), voiced concern that the bill does not adequately address the disproportionate impacts of marijuana criminalization and its exacerbation of the racial wealth gap in the United States. Other members of the committee encouraged amendments and future legislation intended to improve the quality of life for those most negatively impacted by marijuana criminalization in addition to creating safer conditions for banks and other financial institutions. Sen. Warnock was the lone Democrat who voted “No” on the bill during the markup. 

Ultimately, the bill passed out of the committee markup by a bipartisan vote of 14-9. This sets the stage for a full Senate floor vote, which Majority Leader Schumer (D-NY) has committed to scheduling as soon as possible, with the possibility of adding the HOPE and GRAM Acts to the bill before passage.

I don’t know about you, but I’m not done making history yet! Stay tuned for the latest on the SAFER Banking Act and how you can help get the bill passed! 

Long-Awaited Cannabis Bills Introduced

Photo By CannabisCamera.com

by Michelle Rutter Friberg, NCIA’s Deputy Director of Government Relations

Over the last few weeks, a number of cannabis bills were introduced in Congress: the long-anticipated SAFE Banking Act and the CLAIM Act were reintroduced in both chambers, while over in the House, the HOPE Act and 280E legislation dropped. Keep reading to find out more about these bills and the chances of them moving forward:

Finally… SAFE Banking

After the SAFE Banking Act failed to pass into law last session, advocates have been waiting with bated breath for the legislation’s reintroduction – with a particular interest in what changes may (or may not have) been made. 

In the Senate, the bill is being led again by Sen. Jeff Merkley (D-OR) and Sen. Steve Daines (R-MT), while the House version is being spearheaded by Rep. Earl Blumenauer (D-OR) and Rep. Dave Joyce (R-OH) – both of whom are chairs of the Congressional Cannabis Caucus. 

While the bill does not contain wide-ranging revisions, there were some changes. These changes include adding language to explicitly apply the bill’s protections to community development financial institutions (CDFIs) and minority depository institutions (MDIs), as well as ensuring that workers and operators in the cannabis industry are able to obtain federally backed mortgage loans. In response to concerns raised by some conservatives, this version also includes changes and clarifications intended to ensure that federal law enforcement agencies are able to fully enforce anti-money laundering statutes against unlawful operators.

NCIA is optimistic that the legislation will receive either a hearing or markup in the coming weeks and looks forward to this bill finally passing the Senate someday soon!

HOPE Act

Also recently reintroduced was the Harnessing Opportunity by Pursuing Expungement (HOPE) Act. First introduced last session, the bill was just dropped by Rep. Alexandria Ocasio-Cortez (D-NY) and Rep. Dave Joyce (R-OH). 

This bipartisan bill aims to help states with expunging cannabis offenses by reducing the financial and administrative burden of such efforts through federal grants. The overwhelming majority of cannabis-related charges are handled by state and local law enforcement and despite the fact that expungement programs for cannabis-related offenses have recently advanced in states and cities around the country, many criminal record-keeping systems are not ready for or able to support these efforts. 

The HOPE Act would address these complications by creating a new grant program under the U.S. Department of Justice, which would be authorized to make grants to states and local governments to reduce the financial and administrative burden of expunging convictions for cannabis offenses that are available to individuals who have been convicted of such offenses under the laws of the State.

CLAIM Act

Yet another bicameral, bipartisan piece of legislation was recently reintroduced: the Clarifying Laws Around Insurance of Marijuana (CLAIM) Act. Introduced in the House by Reps. Nydia Velazquez (D-NY) and Warren Davidson (R-OH) and in the Senate by Sens. Bob Menendez (D-NJ) and Rand Paul (R-KY), the legislation would protect insurers, brokers, and agents from being penalized by federal regulators for providing insurance services to state-licensed marijuana companies.

Assuming that the SAFE Banking Act moves through “regular order” as expected, I would predict that many of the protections in the CLAIM Act get attached to SAFE. This is the third Congress that the CLAIM Act has been introduced.

Small Business Tax Equity Act

Everyone involved in the cannabis industry has heard of 280E, but many people were surprised to learn that legislation addressing the punitive measure was not introduced during the last congressional session. 

That changed a few weeks ago when Congressman Earl Blumenauer (D-OR), along with four of his colleagues introduced H.R. 2643: the Small Business Tax Equity Act, which exempts a trade or business that conducts cannabis sales in compliance with state law from IRC Section 280E. 

Abolishing 280E is one of NCIA’s main priorities, but unfortunately, the chances of this legislation passing standalone is little to none. We will continue to explore other vehicles which 280E reform may be attached to and seek to provide any tax relief we can to the legal cannabis industry. 

The last few weeks have been a whirlwind of activity here in D.C. – and we don’t plan on slowing down ahead of NCIA’s 11th Annual Cannabis Industry Lobby Days being held on May 16-18! Register today so that you’re a part of our virtual training sessions and we can begin planning your lobbying experience. 

 

Reform Whiplash in Washington

Photo By CannabisCamera.com

By Michelle Rutter Friberg, NCIA’s Deputy Director of Government Relations

Last week, cannabis advocates were dealt another blow with the exclusion of the SAFE Banking Act (SAFE+) in the National Defense Authorization Act (NDAA). That being said, all hope is not lost—the government runs out of funding this Friday, 12/16, and members of Congress are working hard to craft an omnibus bill that may present another opportunity for SAFE+.

Earlier this year, the House of Representatives passed their version of the NDAA — which did include the language of the SAFE Banking Act. Since then, all eyes have been on the Senate, where negotiations over the inclusion of “SAFE+” to the NDAA have been the focus. There was much discussion over what exactly the “plus” in SAFE+ would include, but there was no doubt that the HOPE Act would be a part of that, and potentially the GRAM Act. As of a few weeks ago, NCIA and other advocates were feeling cautiously optimistic about the possibility of SAFE+ being passed via the NDAA.

That was until Senate Minority Leader Mitch McConnell (R-KY) took to the Senate floor last Tuesday to specifically call out SAFE+. He said:

“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. We’re talking about a grab bag of miscellaneous pet priorities — making our financial system more sympathetic to illegal drugs or the phony, partisan permitting reform and name-only language that’s already failed to pass the Senate earlier this year. If Democrats wanted these controversial items so badly, they had two years to move them across the floor. Heck, they could have scheduled those matters for votes this week. But no, we’re doing more mid-level nominations, while Democrats keep threatening to take our Armed Forces hostage over those extraneous matters.

Leader McConnell even gloated about the exclusion of SAFE+ later in the week, saying, “just as Republicans insisted, just as our service members deserve, this NDAA is not getting dragged down by unrelated liberal nonsense. Good smart policies were kept in and unrelated nonsense like easier financing for illegal drugs was kept out.”

While the NDAA is slated to pass the Senate and be signed into law over the coming days, NCIA is continuing to pursue all options for passing SAFE+, including the omnibus bill that Congress is negotiating (currently) behind closed doors.

In other political news, the runoff election between Sen. Raphael Warnock (D) and Hershel Walker (R) was held in Georgia last week, with Sen. Warnock winning. This meant that Democrats held a 51-49 majority over Republicans; that is until Sen. Kyrsten Sinema decided late last week to change her party affiliation from Democrat to Independent. Like the other two Independent Senators (Angus King [ME] and Bernie Sanders [VT]), she plans to caucus with the Democrats. Regardless, the announcement came as a surprise to many.

While the clock may be running out, NCIA won’t stop advocating for SAFE+ and other cannabis issues to be passed into law.

 

 

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