Despite a last-ditch bipartisan effort to get the critical marijuana banking reform passed during the lame-duck session, the SAFE Act is denied once again.
Industry insiders were forced to accept the inevitable final defeat of a multi-year effort to pass common-sense banking legislation for the cannabis industry this past Monday. According to multiple news outlets, the controversial SAFE Banking Act was left out of the must-pass omnibus spending package in Congress.
The measure, which enjoyed broad bipartisan support, would have prohibited federal regulators from punishing financial institutions for providing cannabis companies in states where cannabis is legal with banking accounts.
The result shocked lobbyists, lawmakers and stakeholders who were convinced that the Senate would finally include the legislation in one of its end-of-year packages. Earlier this month, Senate leadership attempted to get the bill added as part of the National Defense Authorization Act (NDAA).
When that effort failed, lawmakers held out one last hope to include it in the omnibus spending bill. Due to arcane Senate rules, the bill needed the support of at least 60 senators even to make it through the committee hearing process. However, reaching that number was practically impossible due to vigorous Republican opposition led by Sen. Chuck Grassley and Senate Minority Leader Mitch McConnell.
Grassley's office expressed enforcement concerns via a memo to the Justice Department, and McConnell strongly opposed the inclusion of the measure into an unrelated bill. Furthermore, because it needed to reach that threshold number, Senate Majority Leader Chuck Schumer (D-NY) did not even call SAFE Banking to a vote on the Senate floor. And with that, the final nail was placed in the coffin of the SAFE Act, for now.
Expressions of disappointment abounded following the frustrating defeat. As Senator Steve Daines (R-MT), one of the bill's eight Republican co-sponsors, said, "Our small businesses, law enforcement, and communities deserve better."
"Our small businesses, law enforcement, and communities deserve better."
- Senator Steve Daines (R-MT)
The defeat of the SAFE Act is seen as a win for the "black market." With capital markets drying up and wholesale and retail prices at all-time lows, this latest blow to legal cannabis businesses further strengthens those individuals and organizations operating in the illicit marijuana market.
Moreover, by denying legitimate companies access to financial banking services, crimes against such cash-heavy operations will continue to propagate, causing further economic and potential physical harm to otherwise law-abiding citizens.
Boris Jordan, Co-founder and Executive Chair of multistate operator Curaleaf Holdings, explained in a statement Monday, "The entire industry will suffer as a result of this failure. This is, sadly, a win for the illegal market, which pays no taxes and has no regulations or testing safeties in place."
"The entire industry will suffer as a result of this failure. This is, sadly, a win for the illegal market, which pays no taxes and has no regulations or testing safeties in place."
- Boris Jordan, Co-founder and Executive Chair, Curaleaf Holdings
Despite the setbacks, industry stakeholders and leaders remain undeterred in their efforts to push forward in trying to gain more in the way of legal wins for marijuana legalization and establishing safe and stable markets.
Khadijah Tribble, the CEO of the U.S. Cannabis Council (USCC) and a Senior Vice President at Curaleaf, also shared in a separate statement, "To say that we are disappointed is an understatement. But to assume the Senate's inertia around cannabis banking reform dooms the entire cannabis industry discounts all of the headway we made this year. The USCC and our partners have built a movement to end cannabis prohibition that will continue in 2023, and I have no doubt we will eventually win."
"To say that we are disappointed is an understatement. But to assume the Senate's inertia around cannabis banking reform dooms the entire cannabis industry discounts all of the headway we made this year. The USCC and our partners have built a movement to end cannabis prohibition that will continue in 2023, and I have no doubt we will eventually win."
- Khadijah Tribble, CEO, U.S. Cannabis Council (USCC)
When it comes to historic and unprecedented change, the movements are sometimes glacial in speed. However, as the adage goes, "slow but steady wins the race." Of course, the ultimate "win" will come because the people support the cause. But the patience of those people is beginning to wear very thin. Hopefully, the politicians in control of the race keep sight of that fact.