House Will Vote On Marijuana Banking Reform As Part Of Defense Bill

The full U.S. House of Representative will vote on an amendment to protect banks that service cannabis businesses from being penalized by federal regulators, a key committee decided on Tuesday.

The House Rules Committee made in order the amendment to the National Defense Authorization Act (NDAA) for fiscal year 2022, clearing it for floor consideration, which is expected later this week. Advocates are disappointed, however, that other cannabis and psychedelics reform measures were blocked by the panel.

One stalled amendment would have promoted research into the therapeutic potential of certain psychedelics like psilocybin and MDMA for active duty military members. Another would have codified that the U.S. Department of Veterans Affairs (VA) couldn’t deny home loan benefits to veterans just because they work in the cannabis industry.

Last week, Rep. Lou Correa (D-CA) had filed a separate amendment to require VA to conduct a clinical trial into the therapeutic benefits of marijuana for veterans with chronic pain and post-traumatic stress disorder (PTSD), but the congressman withdrew it from consideration prior to an initial committee meeting on the defense legislation on Monday.

Here’s an overview of the drug policy measures that the House will consider:

Marijuana banking

Rep. Ed Perlmutter (D-CO) and a bipartisan list of cosponsors successfully fought to get a floor vote on adding language to NDAA that would prevent financial regulators from penalizing banks or credit unions that work with state-legal marijuana businesses. The congressman is the sponsor of the standalone Secure and Fair Enforcement (SAFE) Banking Act, which has passed the House in various forms four times so far and is identical to the new amendment.

While the legislation is not directly connected to defense-related issues, it’s likely Perlmutter sees the must-pass NDAA as a potential vehicle for the reform that could make its way through the Senate, whereas all prior House-passed cannabis banking legislation has stalled to date.

At Monday’s Rules meeting, House Armed Services Committee Chairman Adam Smith (D-WA), who is managing the NDAA bill, acknowledged that while some members might consider certain amendments “superfluous” to defense spending matters, the annual legislation has been used as a vehicle to advance non-germane legislation in the past. He added, though, that doing so has historically required the issues at hand to have broad bipartisan support in order to survive the House-Senate conference committee process.

He didn’t specifically cite the cannabis banking proposal, but Perlmutter himself said earlier in the hearing that “whether something is superfluous is always in the eyes of the beholder,” signaling that he feels his measure’s germaneness in this context is up for interpretation.

Smith said that “whatever superfluous items the Rules Committee decides to put in order and get attached to this bill, we go to conference, and in conference, we work in a bipartisan fashion.”

“We’re not going to pull one over on anybody here. We’re going to have to work with committees of jurisdiction—not just the chairs, but the ranking members as well—to come to some agreement on those before we go forward,” he said. “So if you see an item that you consider to be superfluous being added to the bill, don’t freak out.”

The chair’s comments about needing support from leaders of committees of jurisdiction raise questions about whether the amendment stands a chance in conference with the Senate if it is approved by the House this week. Not only did House Financial Services Committee Ranking Member Patrick McHenry (R-SC) vote against the standalone SAFE Banking Act this year and in 2019, but on the Senate side, even Banking Committee Chairman Sherrod Brown (D-OH) has been generally unenthusiastic about advancing the reform.

On the flip side, House Finance Services Committee Chairwoman Maxine Waters (D-CA) is a supporter of the banking reform and brought it through her panel last Congress. Senate Banking Committee Ranking Member Pat Toomey (R-PA), for his part, has previously voiced support for advancing the SAFE Banking Act.

At the Rules Committee hearing on Monday, Rep. Warren Davidson (R-OH) spoke in favor of adding marijuana banking to the defense bill, arguing that there’s a “national security issue” related to illicit drug trafficking that the SAFE Banking Act could help to address.

Rules Committee Ranking Member Tom Cole (R-OK) agreed. He said that NDAA “may not be the most elegant vehicle” for cannabis banking reform, but he does think “there’s a security issue here, and I think that’s a very legitimate point [Davidson] made.”

I appreciate the support of my colleagues. I’ve been talking for years about this serious public safety threat. Including #SAFEBanking in NDAA will help safeguard the financial system from illicit activity & protect Veterans. We cannot wait any longer to address this issue. https://t.co/CScE7xThI9

— Rep. Ed Perlmutter (@RepPerlmutter) September 20, 2021

Advocates who support broader cannabis reform said the banking measure is a good first step.

“It is critical to balance the need to accomplish comprehensive reform at the federal level and make every effort possible in the immediate term to support the successful state-level programs to ensure safe and efficient consumer access to quality cannabis that is cost-competitive with the unregulated market,” NORML Political Director Justin Strekal told Marijuana Moment. “For those reasons, we support the inclusion of the SAFE Banking Act in any piece of legislation that is going to be enacted into law”

Withhold funds for fumigation of drug crops in Colombia

Rep. Alexandria Ocasio-Cortez (D-NY) filed an amendment approved to prohibit the use of funds for aerial fumigation on drug crops in Colombia, a practice widely criticized by reform and human rights advocates. It will get a vote when NDAA hits the floor. The House approved the language last year but receded to the Senate, which did not agree.

These proposed measures, meanwhile, were not made in order in the Rules Committee: 

Psychedelics for active duty military

Rep. Dan Crenshaw (R-TX), a veteran himself who recently moderated a conversation with a top psychedelics reform advocate, proposed a measure that would have allowed the secretary of defense to approve grants for research into the therapeutic potential of certain psychedelics such as MDMA, psilocybin, ibogaine and 5–MeO–DMT for active duty military members with PTSD. The Rules Committee blocked it from floor consideration, however.

The grants could have been awarded to federal or state agencies, academic institutions or non-profit organizations. Researchers would have needed to “conduct one or more phase two clinical trials for the treatment of post-traumatic stress disorder” involving either individual or group therapy. The grant money could also have been used to support training practitioners to treat eligible military members with psychedelics.

Until now, Crenshaw has consistently voted against marijuana and drug policy reform measures in Congress, including two prior amendments that were aimed at removing barriers to research on the benefits of psychedelics. His home state of Texas recently enacted a law to require officials to study the therapeutic potential of psilocybin, MDMA and ketamine for military veterans.

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VA home loans for veterans in the cannabis industry

Rep. Katherine Clark (D-MA) again pushed to stop VA from being able to deny home loans to veterans who work in the state-legal marijuana industry, but her amendment on the issue was not made in order for a floor vote.

“In the case of a person with documented income that is derived, in whole or in part, from working in the marijuana industry in compliance with the law of the State in which the work takes place, the Secretary of Veterans Affairs may not use the fact that such documented income is derived, in whole or in part, from working in the marijuana industry as a factor in determining whether to guarantee, issue, or make a housing loan under chapter 37 of title 38, United States Code,” the text of the amendment said.

In June, the Appropriations Committee approved a bill that includes a report acknowledging that VA has clarified that veterans are eligible for home loan benefits even if they work in a state-legal marijuana industry. However, it expressed disappointment that the agency hasn’t taken further action to communicate this policy to lenders and borrowers.

That spending bill report also directed VA to improve that communication and report back to Congress on its progress within 180 days of the enactment of the legislation.

A prior Clark amendment to address the problem was approved by the full House as part of a previous defense policy bill—though leaders in the chamber agreed to scrap it after the Senate didn’t include it in its version of the legislation.

A separate measure on racially discriminatory drug testing in the military was previously attached to NDAA in an earlier committee.

As approved in the House Armed Services Committee earlier this month, NDAA already includes report language voicing concern about racial disparities in military drug testing practices and ordering the Pentagon to conduct a review of the issue.

Unlike in past sessions, however, lawmakers did not file an amendment requiring the secretary of defense to issue regulations clarifying that military branches can grant reenlistment waivers to service members who have committed a single low-level marijuana offense.

It’s not clear why Rep. Ruben Gallego (D-AZ), who has consistently championed that cannabis measure, declined to introduce it this year.

Meanwhile, over in the Senate, the Appropriations Committee passed a measure last month that’s meant to promote military veterans’ access to medical marijuana by allowing VA doctors to issue cannabis recommendations in legal states. It would further prohibit VA from interfering with, or denying services to, veterans who participate in a state-legal medical cannabis program.

Reps. Conor Lamb (D-PA) and Peter Meijer (R-MI) filed a bill—titled the Fully Informed Veteran Act—in May that would simply allow VA doctors to provide basic information and resources about state-legal cannabis programs to veterans.

Last year, the House Veterans’ Affairs Committee approved legislation to expand medical cannabis research for veterans, as well as a separate proposal to allow VA doctors to issue medical marijuana recommendations to their patients in states where it’s legal.

Also in April, a bipartisan coalition of congressional lawmakers reintroduced legislation that would federally legalize medical marijuana for military veterans.

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Image element courtesy of Tim Evanson.