Marijuana banking among reforms on the table in upcoming lame-duck Congress

Did you miss the webinar “Women Leaders in Cannabis: Shattering the Grass Ceiling?” Head to MJBiz YouTube to watch it now!

Image of a U.S. flag waving in front of the U.S. Capitol Building

(Photo by Andrea Izzotti/

The months ahead could be shaping up to be the most wonderful time of the year for the U.S. marijuana industry, although insiders warn legislative movement isn’t a sure bet.

In addition to President Joe Biden’s surprise announcement about a marijuana scheduling review and MJ possession pardons as well as the likelihood of more states voting Nov. 8 to legalize adult-use cannabis, this year’s lame-duck session – the stretch of post-election time before newly elected members of Congress take their seats in the new year – could bring even more positive news for the legal industry.

While Democrats caution there’s a long list of legislation to bring to the floor while they still control both chambers of Congress, marijuana reform is on the agenda.

Democrat lawmakers and stock analysts are optimistic that long-standing issues such as cannabis banking reform and restorative justice will finally be addressed. But that will depend on cooperation from Republicans on the issues, which has thus far proved to be difficult.

“Given the momentum, the comments made, the expectations created, and the heavy lobbying from various advocacy groups, we think Senate Democrats want to get this done,” Pablo Zuanic, managing partner at New York-based investment banking firm Cantor Fitzgerald, wrote in an Oct. 3 note after Biden’s announcement.

“So, in that context, the leverage may be held by Republicans.”

SAFE Banking Plus

U.S. Sen. Cory Booker co-sponsored Senate Majority Leader Chuck Schumer’s Cannabis Administration and Opportunity Act, a sweeping federal legalization bill introduced in July that would remove marijuana from the Controlled Substances Act, instruct the U.S Food and Drug Administration to regulate MJ and allow states to retain or create their own laws around the plant.

In an interview with, Booker acknowledged the bill as it stands will not be voted on.

Instead, SAFE Banking Plus, an updated version of the Secure and Fair Enforcement (SAFE) Banking Act, will be in play.

While details are vague so far, the measure is believed to include:

  • The core components of the SAFE Banking Act – introduced in the House of Representatives by Colorado Democrat Rep. Ed Perlmutter in 2019 – which would protect financial institutions from federal punishment should they work with regulated cannabis companies. The measure has passed the House seven times but hasn’t made it to the Senate floor.
  • Allowing small business loans and assistance for veteran access to medical marijuana (in the form of the Department of Veterans Affairs helping with the process of accessing MMJ).
  • Restorative-justice components, which could include nonviolent-criminal-record expungement as well as reinvesting marijuana tax revenue in economic opportunities for communities disproportionately impacted by the war on drugs.

“I think it has a good chance, because our Republican allies also understand that if one of the houses of Congress shifts to Republican, it will be very hard to do anything on marijuana,” Booker told

“We’ve got a good shot. I wouldn’t say it’s a great shot, but it’s on a good path.”

Last week, Perlmutter – who is retiringtold The Hill that there’s “a lot of activity” surrounding Safe Banking Plus.

“I think this thing’s going to get passed this cycle, so I’ve got my fingers crossed,” he said, adding that Biden’s rescheduling review added momentum to the discussions.

Public support grows for banking reform

Americans and advocacy groups not even focused on cannabis are also joining the chorus for banking reform.

Recent survey results collected by Morning Consult in partnership with the American Bankers Association (ABA) showed that 66% of respondents “support Congress passing legislation that allows cannabis businesses to access banking services such as checking accounts and business loans in states where cannabis is legal.”

Only 16% of respondents opposed passing banking reform legislation.

“Americans firmly believe that now is the time to resolve the ongoing conflict between state and federal law to allow banks to serve legal cannabis and cannabis-related businesses,” ABA President and CEO Rob Nichols said in a statement, noting the safety risks involved with cash-only operations.

“We urge Congress to pass the SAFE Banking Act this year to enhance public safety in the … states where cannabis is legal in some form.”

In a resolution passed Oct. 20, the NAACP called for the “immediate passage” of SAFE Banking on the basis it would create a more equitable marijuana industry.

According to the resolution, “The SAFE Banking Act could enable cannabis businesses with social equity licenses, diverse ownership licenses, or other licenses made available by states with medical- and adult-use cannabis laws that aim to foster a diverse and equitable industry, to better compete in the industry if it was coupled with the federal descheduling of marijuana and explicitly provided for fair terms and rates for Black-owned and social equity licensed cannabis businesses.”

What it means

If passed, SAFE Banking Plus, or some version of SAFE Banking, could transform the industry once it’s implemented.

Notably, retailers and other businesses would be relieved of cash-only operations, which have created safety and accounting challenges.

Traditional bank loans and other financial services such as accounting could eventually be accessed.

According to Zuanic, while it’s a long shot, if language from the Capital Lending and Investment for Marijuana Businesses (CLIMB) Act is included in SAFE Plus, it also means publicly owned cannabis companies could uplist to major stock exchanges.

Zuanic also believes it’s unlikely that Section 280E of the federal tax code, which prevents marijuana operators from taking traditional business-related deductions, will be included in SAFE Plus because of how it would negatively impact tax revenue.

There’s limited time left, but SAFE Plus might contain enough social justice elements to win over Democrats.

The question is, according to Zuanic, whether enough Republicans will support it.

Kate Robertson can be reached at