US House passes measure that includes cannabis banking

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The U.S. House of Representatives passed an American competitiveness bill Friday that includes legislation that would enable banks to serve cannabis businesses without fear of reprisal, but it’s unclear whether the measure will pass the full Congress.

The SAFE Banking Act was similarly attached to a national defense budget bill, only to be stripped out by Senate leadership.

The full House passed the multibillion-dollar America COMPETES (Creating Opportunities to Meaningfully Promote Excellence in Technology) Act of 2022 by a vote of 222-210 along party lines.

America COMPETES, also referred to as the China competition bill, is intended to boost U.S. competitiveness in part by strengthening semiconductor manufacturing.

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

Rep. Ed Perlmutter, a Colorado Democrat who has been the foremost champion of SAFE Banking over the years, told reporters Friday at a media briefing that he’s determined to get SAFE past the finish line.

He said “we’ll see how (this attempt) comes out” when a House-Senate conference committee works to resolve the differences between the House version of COMPETES and a version already passed by the Senate.

More opportunities ahead

If SAFE Banking is stripped out again, he said, there’s other forthcoming bills that it could be attached to.

“I’m dedicated to getting this done,” said Perlmutter, who announced recently that he’s not running for reelection.

U.S. Rep. David Joyce, an Ohio Republican, told reporters at the same briefing that SAFE Banking “was pulled at the last minute (from the defense budget bill) because Schumer and Booker want a bigger piece of legislation.”

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He was referring to a comprehensive marijuana reform bill that Senate Majority Leader Chuck Schumer and fellow Sens. Cory Booker of New Jersey and Ron Wyden of Oregon have been working on but have yet to introduce.

Booker has said before that he supports SAFE Banking, but wants any marijuana legislation to include correcting the wrongs of the war on drugs.

SAFE Banking would give banks and other financial institutions a “safe harbor” for serving state-legal marijuana businesses.

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

As a result, many marijuana companies conduct their business mainly in cash, which make them vulnerable to criminal activity.

“We’ve got to get this under control,” Perlmutter told reporters Friday, citing a recent increase in violent robberies of marijuana businesses in California.

He also referred to recent comments by Treasury Secretary Janet Yellen that indicated her support for SAFE Banking.

‘Pretty frustrated’

Perlmutter acknowledged that he’s “getting pretty frustrated by this.”

He noted that when Republicans were in control of the Senate they believed SAFE Banking was too broad, and now progressive Democrats in the Senate complain that it’s too narrow.

Perlmutter said he is “pretty confident” that enough votes exist in the Senate to pass the measure, but he also said he’s open to adding elements to the bill such as equity provisions.

Joyce has formed an unlikely alliance with New York Democrat Alexandria Ocasio-Cortez to introduce the HOPE Act, a bipartisan measure to direct funds to states for cannabis conviction expungement efforts.

“Expungement with banking – if that’s (Schumer’s and Booker’s) concern – it would be perfect,” Perlmutter said.

“To the degree they want to add things, that’s great as long as we get enough votes to pass.”

The U.S. House passed cannabis banking reform with bipartisan votes both in April and in 2019, but the Senate didn’t follow suit.

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.

The Senate version of SAFE Banking has 40 cosponsors, including nine Republicans.

Jeff Smith can be reached at jeff.smith@mjbizdaily.com.