Chuck Schumer Says Key Senators Have ‘Agreement’ Not To Advance Marijuana Banking Reform Before Legalization

Senate Majority Leader Chuck Schumer (D-NY) says he and colleagues working to advance a federal marijuana legalization bill have an “agreement” that the body will not take up cannabis banking legislation until more comprehensive reform advances.

That said, he’s open to exploring an alternative way of advancing banking reform if lawmakers are able to incorporate social equity provisions of legalization—such as expungements for prior cannabis convictions—into separate defense policy legislation that the chamber will be taking up soon.

Whether either proposal would be embraced by President Joe Biden if they were sent to his desk is yet to be seen, but Schumer said he’s going lobbying him “heavily” on legalization.

The majority leader made the new comments in an interview on Drug Policy Alliance founder Ethan Nadelmann’s podcast Psychoactive that was released on Thursday. Schumer said there is consensus between him, Senate Finance Committee Chairman Ron Wyden (D-OR) and Sen. Cory Booker (D-NJ) on blocking legislation that would simply protect financial institutions that work with state-legal cannabis businesses until a social equity-focused legalization bill moves forward.

The discussion got at the heart of a debate that’s been ongoing among advocates and industry stakeholders.

On the one hand, there’s bipartisan legislation called the Secure and Fair Enforcement (SAFE) Banking Act that stands a strong chance of passage in Congress. It’s been approved by the U.S. House of Representatives five times now, most recently as an amendment to a defense spending bill last week.

On the other hand, there’s a draft proposal to holistically end federal marijuana prohibition that Schumer is sponsoring. And on the House side, the Judiciary Committee on Thursday is expected to approve a separate legalization measure from Chairman Jerrold Nadler (D-NY).

“Why not let [banking reform] move forward while the long-term process of the legalization bill needs to work itself through?” Nadelmann asked.

“Senators Booker, Wyden and I have come to agreement that if we let [the banking bill] out, it’ll make it much harder and take longer to pass comprehensive reform,” Schumer replied. “We certainly want the provisions, similar to the SAFE Banking Act, in our bill. But to get more moderate people—to get some Republicans, to get the financial services industry—behind a comprehensive bill is the way to go. It’s the right thing to do.”

While the senator has previously expressed reluctance to advancing marijuana banking reform first—including in an interview with Marijuana Moment in April—these latest comments about an “agreement” to block the financial services reform put the situation in starkest terms yet.

“All the pain that’s been suffered by so many people for so long will not be alleviated because banks can now do some funding of the growing and processing of marijuana,” he added. “We think that the quickest way to get it all done is to do it together. If you let just the banking provisions pass, it’ll make it much harder to get more Republicans and more conservatives on the bill.”

“We’re trying to create a coalition for comprehensive reform and don’t want to pick one off.”

In other words, if there was any uncertainty about the senators’ legislative priorities for marijuana, the majority leader says a line has been drawn in the sand: Legalization first.

At the same time, however, Schumer did not rule out incorporating some cannabis reform proposals into the Senate’s version of the National Defense Authorization Act (NDAA) if other justice-focused provisions can be added as well. That legislation is where SAFE Banking sponsor Rep. Ed Perlmutter (D-CO) managed to attach his banking amendment in the House, but it lacks many of the social equity provisions that advocates want to see.

Nadelmann asked the majority leader if it would make sense to add things such as expungements on top of banking to sweeten the deal.

“Look, everything should be explored, and if people in the Senate can add some things on, that would make it more of a palliative. But again, I don’t want to bargain against myself here,” Schumer replied. “We need comprehensive reform. That’s what we need.”

Schumer recognized that freeing up banks to work with marijuana businesses without being penalized by federal regulators would have some equity implications, enabling some disadvantaged communities to obtain access to capital needed to participate in the market.

However, he stressed that “water goes downhill,” and most of the benefits would go to “fat cat, more well-to-do people, so you’ve got to be really careful about that.”

“I’m not arguing against the specifics. I’m just telling you that it’s my view that, if we are in range of getting comprehensive reform and we’re making great progress,” the Senate should leverage that opportunity to enact a broad policy change.

“Remember, as majority leader, I can determine what’s put on the floor,” he added. “[Then-Senate Majority Leader Mitch McConnell (R-KY)] said he’d never put a legalization or decriminalization bill on the floor. I will when we get the votes and build the coalition, and the [SAFE Banking Act] will be part of that coalition.”

Nadelmann pressed Schumer about ongoing reluctance among certain members of his own party, including Sens. Dianne Feinstein (D-CA) and Jon Tester (D-MT), to embrace legalization.

Schumer replied by stressing that the proposal won’t pass “unless we get bipartisan support,” but he also noted that as the legalization movement has spread to states of all political leanings, there’s a greater chance that former opponents could back reform this round.

Another obstacle to broad reform is Biden, who supports modest proposals such as decriminalizing cannabis possession and letting states set their own marijuana policies, but remains opposed to adult-use legalization. Asked whether he’s had discussions with the White House about his legislation, Schumer said Biden has been “preoccupied with a lot of stuff, but I am going to lobby him heavily on this issue. And, you know, I’ve had a few conversations, but not many—but it will increase.”

In a brief aside, Schumer was asked if he ever smoked cannabis in his youth. The majority leader said “no, I never smoked marijuana myself.”

“But you know, I believe that just because I didn’t, people should make their choices and not have the government, particularly in a crazy legal system and criminal justice system, impose it,” he said, adding that he was “in the minority” of his peers in college who didn’t indulge.

Nadelmann also recently hosted a newsmaking conversation with National Institute on Drug Abuse Director Nora Volkow on his podcast. During that episode, the official acknowledged that marijuana legalization has not led to increased youth use despite her prior fears, and she spoke about the therapeutic potential of certain psychedelics that have long been deemed “dangerous” under federal law.

Watch Live: Federal Marijuana Legalization Vote In Congress, Days After Banking Reform Advances

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