Senate Majority Leader Chuck Schumer (D–N.Y.) is desperately trying to save the SAFE Banking Act, a bill that would make it easier for state-licensed marijuana businesses to access financial services. But that bill would already have been enacted if Schumer had not blocked it last year, when he portrayed it as a threat to broader marijuana reform.
The House has approved cannabis banking reform more than half a dozen times, including an April 2021 vote in which the SAFE Banking Act attracted the support of 215 Democrats and 106 Republicans. But the bill has repeatedly foundered in the Senate, even though it also has bipartisan support in that chamber.
The latest defeat came last week, when the banking bill was omitted from this year's National Defense Authorization Act (NDAA). Now Schumer is trying to persuade Republicans, with whom he plans to confer today and over the weekend, that the bill should be included in an omnibus spending package that represents the last chance to pass the SAFE Banking Act during the current session.
The chief opponent of that maneuver is Senate Minority Leader Mitch McConnell (R–Ky.), who bragged about excising the SAFE Banking Act from the NDAA and hopes to keep it out of the broader appropriations bill. But last year, it was Schumer who insisted that the SAFE Banking Act be omitted from the 2021 NDAA. If he had not done that, he would not be scrambling to pass the bill now.
The SAFE Banking Act, which is sponsored by Rep. Ed Perlmutter (D–Colo.) in the House and Sen. Jeff Merkley (D–Ore.) in the Senate, addresses one of the problems created by the conflict between state and federal marijuana laws. Because marijuana is still prohibited under federal law, banks are leery of serving businesses that sell it, even when they do so in compliance with state law. As a result, those businesses tend to rely heavily on cash, which makes them tempting targets for robbery. The SAFE Banking Act aims to reduce that potentially deadly hazard by allowing financial institutions to serve state-legal cannabis suppliers without the threat of civil, criminal, and regulatory penalties.
McConnell thinks that idea is wacky. In remarks about the NDAA on the Senate floor last week, he complained that Democrats were "trying to jam in unrelated items with no relationship whatsoever to defense," including legislation "making our financial system more sympathetic to illegal drugs." The next day, McConnell rejoiced that the NDAA "is not getting dragged down by unrelated liberal nonsense," such as "easier financing for illegal drugs," which "was kept out." He said "that same lesson must carry over into our subsequent conversations" about the omnibus spending bill.
Last year, the legislation that McConnell condemns as "liberal nonsense" was supported by nearly half of the Republicans in the House. In the Senate, the SAFE Banking Act has 42 co-sponsors, including nine Republicans. Among them is Rand Paul, the junior senator from McConnell's state. The co-sponsors also include Sens. Roy Blunt (R–Mo.), Bill Cassidy (R–La.), Susan Collins (R–Maine), Kevin Cramer (R–N.D.), Steve Daines (R–Mont.), Cynthia Lummis (R–Wyo.), Lisa Murkowski (R–Alaska), and Dan Sullivan (R–Ark.) Why are all of these Republicans endorsing "liberal nonsense"?
Maybe because it is consistent with federalist principles, since the threats against banks that serve marijuana suppliers interfere with the implementation of policies that 37 states have adopted. Seven of the nine Republican co-sponsors in the Senate represent states that have legalized marijuana for medical and/or recreational use.
The SAFE Banking Act also is consistent with Republican support for entrepreneurs, opposition to regulations that impede them, and concerns about crime and public safety. "It's got to be addressed," Sullivan told The Hill. "Guys like me have been trying to make the case to my conference that this is not some kind of crazy bill. It's a bill about safety and small businesses."
Daines has been leading Republican efforts to enact marijuana banking reform. "My support for SAFE Banking relates to the first word in the bill," he said. "It's called 'safe.' This is a public safety issue. For states that have legalized cannabis, this is a way you can make a community safe—by taking the cash off the street and put[ting] it in the bank."
Public opinion is on Daines' side. A recent poll commissioned by the American Bankers Association found that two-thirds of Americans think Congress should approve legislation that removes the obstacles to financial services for state-licensed marijuana businesses. Just 16 percent of respondents said they opposed such legislation.
Public support for repealing marijuana prohibition altogether is equally strong. According to the latest Gallup poll, 68 percent of Americans, including 51 percent of Republicans and nearly half of self-described conservatives, think marijuana should be legal.
McConnell nevertheless portrays supporters of the SAFE Banking Act as a bunch of crazy progressives. That may be what you would expect from a conservative octogenarian with a long history of supporting draconian drug policies and opposing marijuana legalization.
Schumer, by contrast, has publicly supported legalization since 2018, and in July he introduced a bill that would have removed marijuana from the list of federally prohibited drugs. Yet he played a key role in excising the SAFE Banking Act from last year's NDAA, much to the dismay of fellow Democrats in the House.
"People are still getting killed and businesses are still getting robbed because of a lack of action from the Senate," Perlmutter said in a December 2021 press release. "The SAFE Banking Act has been sitting in the Senate for three years and with every passing day their unwillingness to deal with the issue endangers and harms businesses, their employees, and communities across the country."
House Rules Committee Chairman Jim McGovern (D–Mass.) slammed Schumer during a committee meeting. "I don't really quite know what the hell his problem is," McGovern said. "But what he's doing is he's making it very difficult for a lot of small businesses…to move forward and to expand and to hire more people."
Rep. Adam Smith (D–Wash.), who as chairman of the House Armed Services Committee played a major role in negotiating the final version of the 2021 NDAA, also objected to Schumer's obstruction. "As a practical matter, to not have the SAFE Banking Act is incredibly dangerous," he said. Under current law, he noted, state-licensed marijuana suppliers "basically have to run a cash business" and "can't do the normal banking" that other businesses take for granted.
Paul also criticized Senate Democrats for nixing the SAFE Banking Act. "Democrats control the House, Senate and White House and we still can't get cannabis banking reform bills passed," he noted on Twitter. "This should be a complete no brainer, as so many states have legalized now and we need business to operate."
But Schumer insisted that his own legislation, which never had a chance of passing in the Senate, take priority. Meanwhile, the casualties from dispensary robberies continued to pile up.
After his quixotic legalization bill predictably fizzled, Schumer suggested that Congress might still approve marijuana banking reform during this year's lame-duck session. In October, he said the Senate was "very close" to considering a bill combining the SAFE Banking Act with legislation aimed at encouraging the expungement of marijuana records. "We may be able to get something done rather soon," he said. "I'm working with a bunch of Republican senators, a bunch of Democratic senators, to get something passed."
After the midterm elections, Schumer seemed less optimistic. Sen. Cory Booker (D–N.J.) said Schumer indicated that "it's just going to be hard to get as much done as we need to." Booker, who co-sponsored Schumer's legalization bill and joined him in opposing the SAFE Banking Act last year, added that "there's very little time in this lame duck and a lot of things that people want to do." Schumer and Booker could have avoided that problem, of course, if they had been open to piecemeal marijuana reforms sooner.
The Drug Policy Alliance (DPA), which has a long history of supporting such reforms, nevertheless sided with Schumer and Booker during last year's NDAA battle. The DPA said it was essential to "keep the SAFE Banking Act OUT of this omnibus bill," because enacting the legislation would amount to "prioritiz[ing] marijuana profits over people." The bizarre implication was that marijuana merchants, who face an ongoing danger aggravated by the failure to approve banking reform, do not qualify as "people."
On March 19, Jordan Brown, a 29-year-old employee, was shot and killed during an armed robbery at World of Weed, a dispensary in Tacoma. Brown was a person. So is the employee who was taken hostage during a March 17 armed robbery at Euphorium Marijuana Shop in Covington, a Seattle suburb. In that case, a security guard shot and killed the robber. A third robbery, at the Factoria pot shop in Bellevue on March 16, was followed by a shootout in which police killed one suspect. In the first few months of 2022, the Washington State Liquor and Cannabis Board (LCB) reported, the state had seen more than 50 robberies of marijuana businesses.
Oregon has a similar problem. Willamette Week noted that "crime at cannabis shops exploded during the pandemic, culminating in the killing of a North Portland budtender in late 2020." During the first half of this year, the Oregon Liquor and Cannabis Commission counted 12 robberies of licensed pot stores. Willamette Week reported that the targets included Best Buds in Portland, where "thieves pistol-whipped one employee and shot at another as he emerged from the restroom with his hands up." That incident was "so violent" that it "sent shockwaves through the industry."
As supporters of the SAFE Banking Act see it, this situation demands action. But until now, Schumer has not shared their sense of urgency. "If we let this bill out," he warned in 2021, "it will make it much harder and take longer to pass comprehensive reform." The DPA likewise worried that passing the SAFE Banking Act would relieve pressure for legalization.
Ethan Nadelmann, who founded the DPA and ran it for 23 years, was skeptical of that approach. "A strategy of holding off on doing the incremental stuff, like safe banking, until we get the broader legalization," he told Reason's Nick Gillespie last year, "when we know broader legalization is not gonna happen for years…may well not work on Capitol Hill."
Nadelmann was right about that. Unless Schumer's last-minute wrangling succeeds, he will get neither the broader reforms he wanted nor the more modest but still meaningful changes he is belatedly promoting.
Yesterday Senate Banking Committee Chairman Sherrod Brown (D–Ohio) indicated that the SAFE Banking Act might have a shot next year. "With Republicans set to reclaim a House majority in the next Congress," Marijuana Moment notes, "the idea that SAFE Banking has a clearer pathway in 2023 versus 2022 with Democrats currently in control of both chambers is questionable."
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