US House passes cannabis banking reform as part of defense legislation

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US marijuana reform

The U.S. House of Representatives passed a defense budget bill Thursday night that includes landmark legislation to make it easier for banks to serve cannabis businesses, but it appears a long shot that the U.S. Senate will follow suit and approve some form of the SAFE Banking Act.

The full House passed the National Defense Authorization Act for Fiscal Year 2022 by a bipartisan vote of 316 to 113.

The House earlier had adopted the SAFE Banking Act as an amendment to the defense legislation.

Tucking the SAFE Banking Act into a larger “must pass” budget bill was a strategy to get the measure across the finish line.

“The Senate should ensure this provision remains in the final version of this funding package and enact it swiftly,” NORML Political Director Justin Strekal said in a news release.

The SAFE Banking Act would open the door to banks and other financial institutions to serve state-legal marijuana businesses without fear of federal reprisal.

State-legal marijuana businesses have struggled for years to gain access to traditional financial services such as checking accounts, payroll services and lines of credit for operating capital.

As a result, many cannabis businesses conduct mainly cash transactions, which make them more vulnerable to criminal activity.

As of June 30, 706 banks and credit unions were actively providing banking services to marijuana-related businesses, up slightly from 689 in March, according to data from the Financial Crimes Enforcement Network (FinCEN), a division of the U.S. Treasury.

David Mangone, director of policy for the Washington DC-based Liaison Group, a marijuana lobbying company, said it’s tough to forecast the cannabis banking measure’s outlook in the Senate, but he noted several potential obstacles.

“The first is that the Senate could adopt the House (bill) but what is more likely they will write their own version of the bill,” Mangone wrote in an email to MJBizDaily.

The second obstacle is that if the SAFE Banking Act is offered as an amendment to the Senate’s defense budget bill, there’s a question of whether it could survive challenges over its relevance to the budget bill, Mangone said.

Schumer plan a factor?

In addition, Mangone noted, Senate Majority Leader Chuck Schumer, who has proposed a sweeping legalization bill called the Cannabis Opportunity and Administration Act, has “made it pretty clear that he wanted to move comprehensive (marijuana) reform before SAFE.”

But, Mangone added, that was in the context of the SAFE Banking Act as a stand-alone bill, so it’s unclear how the inclusion of the legislation in a larger bill would “impact this calculus.”

Schumer’s position hasn’t changed, according to Politico’s Natalie Fertig, who in a Twitter post on Thursday cited a Schumer spokesperson on the issue.

In addition, New Jersey Sen. Cory Booker, one of the sponsors of the Senate marijuana reform bill, told Fertig that cannabis banking shouldn’t be included in the Senate’s defense budget bill.

“It undermines the ability to get comprehensive marijuana reform and the kind of things that are harder to get done like expungement of people’s records,” Booker said, according to a Fertig tweet.

‘A lot of unknowns’

The U.S. House passed cannabis banking reform with bipartisan votes both in April and in 2019, but the Senate has refused to follow suit.

However, prospects in the Senate are considered better these days than in previous years after Democrats won slim control in the 2020 elections and as more conservative senators become better educated on the public-safety risks of marijuana’s cash economy.

While the latest development hasn’t significantly moved the dial in terms of actual reform, it might have some beneficial impact.

“The bottom line is a lot of unknowns with the Senate. But SAFE attached to the House NDAA (National Defense Authorization Act) may help raise the bill’s profile,” Mangone wrote.

Jeff Smith can be reached at