Lawmakers Talk Next Steps For Marijuana Banking And Legalization After Reform Blocked By Senate Leader

Rep. Ed Perlmutter (D-CO) is “still pretty irritated” that marijuana banking reform was omitted from a defense bill last week—apparently at the behest of Democratic Senate leadership. But he said in an interview with Marijuana Moment that the congressional debate that subsequently ensued has advanced the cause nonetheless.

Looking ahead, the Secure and Fair Enforcement (SAFE) Banking Act sponsor sees additional opportunities to pass the legislation as part of other large-scale bills if the Senate remains unwilling to adopt the standalone measure. He’s had conversations with House Speaker Nancy Pelosi (D-CA) to that end.

Reps. Earl Blumenauer (D-OR) and Dave Joyce (R-OH) also told Marijuana Moment this week that they remain adamant about finding a path to passage in spite of the recent setback.

Blumenauer, who also released a memo reflecting on the year’s progress on marijuana reform and outlining priorities for 2022 on Thursday, said during a briefing with reporters that he’s “learned to be patient” when it comes to cannabis reform on Capitol Hill.

“We’re playing the long game here, and we are in the best position we’ve ever been with the Senate,” Blumenauer said. “I’m confident, when we get these aligned, that we’ll be able to move.”

The congressional debate over SAFE Banking this year has divided certain lawmakers and advocates. They share the ultimate goal of ending cannabis criminalization, but there’s tension between the pragmatic desire to pursue bipartisan legislation that’s more incremental but has the votes to pass now and the push for comprehensive reform that will take time to build support for.

But despite the lawmakers’ optimism, it doesn’t necessarily take the sting out of the latest failed attempt to secure protections for banks that choose to work with state-legal cannabis businesses. The House had passed the reform as part of its version of the National Defense Authorization Act (NDAA), only to have it sidelined following bicameral negotiations.

“By adding it to NDAA, we brought it up several notches in terms of the attention that the Senate had to take to SAFE Banking,” Perlmutter told Marijuana Moment in a phone interview on Tuesday.

And while he remains frustrated over inaction on cannabis policy in the Senate, he said he’s “somewhat encouraged by the conversation that developed” after he filed an amendment in the House Rules Committee to reinsert the legislation into the defense bill—even if he ultimately decided not to force a vote and risk blowing up the overall NDAA deal that emerged out of bicameral negotiations.

But he and other House lawmakers have signaled that the days of playing nice with the Senate and hoping that the other body will get around to taking up cannabis banking at its own pace are over.

Blumenauer told Marijuana Moment on Thursday that “it’s very clear that this is the last time that we’re going to basically avoid the showdown” without blowing up larger bills, if it comes to that. Perlmutter made similar comments during the Rules meeting last week.

It was no secret that Senate Majority Leader Chuck Schumer (D-NY) posed an obstacle to enacting marijuana banking reform through NDAA, as he’s repeatedly said that he believes comprehensive reform to end federal cannabis prohibition and put in place a regulatory scheme should come first. Perlmutter said it really was the leader’s final word that nailed the coffin on passing banking reform as part of the defense bill.

“Senator Schumer really weighed in on this. It was one of the last things eliminated from the NDAA—really at the Senate majority leader’s insistence,” he said.

The congressman is a cosponsor of a legalization bill—the Marijuana Opportunity, Reinvestment and Expungement (MORE) Act, which passed the House last year and cleared the Judiciary Committee this session in September. He wants to see broad reform, too. But he’s not so confident that the proposal still has the votes to be approved in the full House again, with a narrower Democratic majority in place now than the last time it was brought up.

And that’s to say nothing of the Senate, where deep doubts remain about the prospects of getting 60 votes to advance federal descheduling.

“Right now, with SAFE Banking, we know clearly that has the votes in the House,” Perlmutter said, noting the strong bipartisan support his bill has received as it’s cleared the chamber five times in some form at this point.

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“The bill that Senator Schumer and Senator Booker have talked about—they’ve got some basic outline of what they’d like to see that decriminalizes, has a criminal justice reform component in it, as well as a big taxation component in it,” he said, referring to their draft Cannabis Administration and Opportunity Act (CAOA). “I don’t think they have the votes for that.”

“It isn’t like this is a subject that’s brand new. Where is it going?”

“I don’t have a problem with [broad legalization] personally,” he said. “I just want to pass something that breaks the ice so that the Senate starts taking this up in, you know, bigger chunks if they’re willing to do that.”

He also said that there are other potential legislative vehicles that he could attempt to put the banking language in, and which he has discussed with Pelosi, but “it’s premature to talk about” the specifics publicly.

Blumenauer, for his part, insisted that the Senate could easily pass SAFE Banking if it was brought to the floor as standalone legislation.

“We’ve given them a bill. It is clean. It has broad support in the Senate,” he said. “That’s the simplest effort, but there will be vehicles going back and forth. And you will see there will be strong support to make sure that we don’t come up short on this again.”

Joyce, the Ohio Republican congressman who on Thursday sent a letter to President Joe Biden and Vice President Kamala Harris criticizing the administration’s inaction on cannabis reform and who recently filed a new marijuana expungements bill, also recently spoke about the SAFE Banking Act and the thinking behind enacting that bipartisan policy change first.

At an event hosted by the Coalition for Cannabis Policy, Education, and Regulation (CPEAR), Joyce said that the MORE Act is “DOA” in the Senate, meaning dead on arrival. So “we’ve got to find a more palatable path forward.”

“Our idea was to consider this—if you wouldn’t mind the term—flooding the zone,” the congressman said in response to a question from Marijuana Moment about combining his expungements legislation with banking to assuage the Senate’s concerns. “You know, piecemeal things like the HOPE Act and [SAFE Banking Act] and STATES Act and putting those things out there in front of it instead of an all-inclusive one-size-fits-all” bill.

“We know we don’t do big well. And so bite-sized pieces may be better,” Joyce said. “If we can get the Senate to at least bite on some of these smaller ones, I think that we’ll get into position where” reform can advance.

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Perlmutter is quick to argue against people who say that SAFE Banking is all about the industry—emphasizing that access to capital and “not getting shot” due to the inherent dangers of marijuana businesses being forced to operate on a largely cash basis are equity issues in and of themselves. But he’s also not against having the Senate take the legislation and add additional social justice components.

Asked for his thoughts on attaching the marijuana expungements bill that Joyce recently filed with Rep Alexandria Ocasio-Cortez (D-NY) to the SAFE Banking Act as a way to assuage equity concerns expressed by Schumer and others, the congressman deferred to the Senate, saying he’s fine with it “if they have the votes.”

The congressman also reacted to strong pushback from House Rules Committee Chairman Jim McGovern (D-MA) against Schumer’s intervention against the banking provisions of the NDAA.

“I don’t really quite know what the hell his problem is,” the chairman said of Schumer at last week’s hearing.

“I’m glad” that the chairman was openly critical, Perlmutter told Marijuana Moment, “because mine would have been even harsher.”

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Photo courtesy of Mike Latimer.