Enough Talk! Congress Takes Action on Key Cannabis Legislation
As state legalization measures in New York and New Jersey stumbled near the finish line this week, better news emerged from Washington, DC, as Congress made progress on two of the most prominent federal reform measures.
After debating the measure for hours on Wednesday, the House Financial Services Committee approved the SAFE Banking Act on a strong bipartisan vote of 45–15 on Thursday morning. The measure would ensure that financial institutions are not punished for providing banking services to state-regulated cannabis companies. The bill will now be considered by the full House, while its companion measure in the Senate remains blocked by the chair of the Senate banking committee.
Also this week, House Rules Committee Chairman James McGovern (D-MA) indicated that support in the House was growing for the STATES Act, the leading vehicle for federal cannabis legalization. McGovern pledged to bring the measure to a full House vote “within the next several weeks.” The STATES Act would allow individual states that have legalized cannabis to regulate it as they please, without federal interference, while keeping prohibition in place in states that have not chosen to legalize.
McGovern’s committee performs a key gatekeeping function in deciding how and when legislation reaches the House floor. The committee’s previous chair, Rep. Pete Sessions (R-TX), was an adamant prohibitionist who refused to allow any cannabis reform measures to move forward. Sessions was defeated in last November’s election by Democrat Colin Allred.
“We will guide it to the House floor for a vote,” McGovern said in an interview with Boston Herald Radio. “I think it will pass with an overwhelming vote—Democrats and I think a lot of Republicans as well. If we have a strong bipartisan vote that will increase the pressure on the Senate to do something.”
McGovern’s comments were first reported by Kyle Jaeger of Marijuana Moment.
While some state-licensed cannabis companies have opened basic financial services accounts with small local banks and credit unions, national banks such as Chase, Wells Fargo, and Bank of America refuse to do business with cannabis companies because of federal financial laws. This has forced many companies to operate as cash-only enterprises. Bank loans and credit lines, the basic financial lifeblood of most small businesses, are not available to state-legal cannabis companies. The restrictions force businesses to pay employees and vendors in cash, prevent customers from using credit or debit cards, and make businesses attractive targets for criminals.
The Secure and Fair Enforcement (SAFE) Banking Act (HR 1595) was originally introduced by Rep. Denny Heck (D-WA) and Earl Perlmutter (D-OR) and has since gathered more than 150 co-sponsors from both parties.
“This is a historic and critical step forward for the nation’s burgeoning cannabis industry,” said Steve Hawkins, executive director of the Marijuana Policy Project. “Lawmakers seem to recognize the urgency and public safety implications of ensuring cannabis businesses can access banking services.”
Congressman Earl Blumenauer (D-OR), the longtime champion of federal legalization, heralded the vote as an important incremental victory. “This is the most significant step we’ve seen so far toward addressing our outdated federal marijuana policies,” he said. “We’ve actually gone through the process, fully debated, and seen broad bipartisan support.”
The SAFE Banking Act has enjoyed broad bipartisan support in previous years but had been blocked at the committee level by former House Financial Services Committee Chairman Jeb Hensarling (R-TX). When Democrats gained the majority in the House in last November’s election, Hensarling was replaced by Democrat Maxine Waters, the California Congresswoman whose state is clamoring for cannabis banking reform. Under Waters’ leadership, the measure finally came to the full committee for a vote.
Next step: A full vote on the measure in the House. It’s unclear when House Speaker Nancy Pelosi, a fellow California Democrat, will bring the bill to the floor.
An earlier version of the SAFE Banking Act was introduced in the Senate two years ago by Sen. Jeff Merkeley (D-OR). (Merkeley hasn’t yet re-introduced the measure this year.) The previous measure received a hearing, but not a vote, in 2017. The Senate Banking Committee is currently chaired by Sen. Mike Crapo, a Republican from Idaho, one of the most anti-cannabis prohibitionist states in the nation.
