Will Cannabis Banking Reform Finally Pass Along With the Defense Bill?

safe banking cannabis in defense bill

President Biden may finally pass the cannabis banking bill with the imperative 2022 defense budget.

The United States House of Representatives has approved the cannabis banking reform which was included in the large-scale defense spending bill. This hearing took place on Thursday, last week.

Doubts abound as this is the fifth time the house is sitting on this measure and approving it. This latest breakthrough may be pushed back by politicians who are either against federal cannabis reforms or support federal reforms but are not in support of doing it through the defense budget medium.

The Banking Reform

The fact that banks within the U.S cannot offer conventional banking services to cannabis businesses is not hidden. For years, banks that engage in business with cannabis companies have been normalized by federal regulating bodies. This is all due to the federal prohibition of cannabis and its classification as a schedule 1 drug.

Cannabis businesses have had to seek loan services and banking services from international banks or other unconventional financial companies to keep business running smoothly.

The cannabis banking reform measure was approved two days before the defense bill was passed. The approval which came after a voice vote was conducted means that traditional banks in the country would soon be free to conduct businesses and offer their services to cannabis companies without fear of penalties from federal regulators.

The House Rules Committee recommended the cannabis banking reform measure for floor consideration after Representative Ed Perlmutter made an amendment. The bill is not the only drug policy proposal attached to the National Defense Authorization Act (NDAA), however, it could play a very important role in opening the floor for concrete cannabis reforms.

Previous Attempt to Pass the Cannabis Banking Amendment

In April this year, the U.S House of Representatives approved the cannabis banking reform — SAFE Act— by a landslide victory of 321 to 101 votes. Since this was passed, the Senate refused to take up the bill when it was passed along to the chamber.

To get the senate to take up the measure, the house decided to include it in the defense budget of the fiscal year 2022.

Resistance from pivotal senators

Perlmutter remains optimistic that the bill will be passed this time. He commented that the fifth time could be the charm. He said that using the National Defense Authorization Act measure to convey the banking reform to the Senate floor might do the trick.

The representatives still have to put in a lot of effort to secure the bill's approval in the senate. For the bill to remain part of the defense measure, the representatives have to curry the favor of several senators. Perlmutter told an online publication, Marijuana Moment, that he believes the bill will be able to scale through the challenges that might present during the house and senate conference.

Pivotal senators like Senator Cory Booker and Senate Majority Leader, Chuck Schumer have shown their displeasure in smuggling the cannabis bank reform measures through the defense bill. These senators insist that the first cannabis reform bill that should be approved federally had to be comprehensive and focused on legalizing marijuana. They also believe that the bill must be justice-focused to make a bigger impact in the country.

The Secure and Fair Enforcement (SAFE) Banking reform bill could affect the laid down structure for broader cannabis reforms if it is passed first.

Sen Schumer and Sen Booker have been ardent supporters of cannabis reforms in the senate for several years. Their reluctance to include the banking reform act in the NDAA bill might encourage other senators to remove it.

Schumer's spokesperson was reported to have announced that the majority leader is not opposed to moving the banking reform bill at the same time as the main cannabis reforms Act.

Senator Booker also told Politico in plain words that cannabis banking should have no place in the defense budget of the country. Booker and Schumer are working tirelessly to prepare a final draft of the cannabis organization bill. The Senate Finance Committee Chairman, Ron Wyden, is also working with these two to ensure the final bill is prepared in due time.

Booker concurred with Schumer's spokesperson and added that using the Defense budget as a vehicle to convey the cannabis banking reform act to the president's desk will undermine the efforts of the majority to secure comprehensive cannabis reform policies. It will also make it harder to get justice-focused cannabis reform bills that can be used to get offender's records expunged, cleared, or reduced.

Overview of the SAFE Banking Act

The amended SAFE reform measure, if passed, will improve the security of the country's financial system. It will also help federal regulators to keep illegal drug cartels out of the financial structure.

The bill would authorize cannabis businesses in legalized states with retail cannabis operations to pay taxes to the federal government with a check. It would also help these businesses secure important loans, as well as use designated debit cards for the smooth running of their operations.

Representative Perlmutter has emphasized severally the security benefits of the amended reform. He says that the SAFE reform bill will lay down an appropriate foundation for the federal cannabis industry and thus reduce the risk of violent crimes in America's communities.

Bottom Line

The house is making use of an old congressional trick that entails tucking in a dissimilar measure into a must-pass bill.

The odds of the state embracing the provision seems higher due to the slim control won by the Democrats in the last general elections.

The approval of the defense budget with the cannabis banking reform included will enable state-legal cannabis businesses to gain access to conventional financial services. These struggling businesses will have access to checking accounts, lines of credit, and payroll accounts.

Steven Hawkins, The U.S Cannabis Council CEO, has urged lawmakers to adopt the cannabis banking measure stating that cash transactions by these businesses are anachronistic and pose a threat to the safety of the masses.