What a Mitch! Safe Banking Act Passes in the House 321 to 103 Leaving Sen. McConnell in a Tough Spot

What a Mitch!! Safe Banking Act Passes in the House 321 to 103 Leaving Sen. McConnell in Tough Spot

safe banking act mitch mcconnell

What will Mitch McConnell do now that the Safe Banking Act has bi-partisan support?

The great news yesterday in the cannabis world is that the Safe Banking Act passed by a surprising large margin in the House yesterday by a vote of 321 to 103. This was a significant victory on the Republican side for the cannabis movement as more and more Republicans represent states that are legalizing medical marijuana. The industry insiders were worried about hitting 270 on the YES votes just a few months ago. The surprise surge came from Republicans backing the bill, to a tune of 91 voting YES.

Rep. Earl Blumenaur of Oregon, a large cannabis growing state, said, “The states aren’t waiting for us, this is an $11 billion industry and growing. And it’s growing because the people and the states are demanding it. We need to step up.”

The bill has been sweetened up in the last few weeks in order to gain more support among Republicans including adding protection for firearms dealers and gun ammunition suppliers, and adding hemp measure protections to entice the Senate majority leader, the Dr. Evil of Marijuana, Mitch McConnell, to take up the bill in the Senate. While much joy has been celebrated in the industry over the past 12 hours, the underlying fear is that the euphoria will all be for not as the Republican controlled Senate lead by McConnell has little interest in furthering the legalization of marijuana or helping the Democrats advance any of their talking points heading into the 2020 elections.

The bill could be dead on arrival in the Senate, hence the protections added in for firearms dealers and hemp companies. The firearms dealers protections make zero logical sense in a cannabis banking bill on the surface, but in order to get a higher number of Republicans to vote yes on the overall bill, the Democrats had to add some sweeteners. Why was there special language added specifically to protect the hemp industry? Mitch McConnell.

Mitch McConnell is the Senate leader and can decide what gets voted on by the Senate and what dies on the sidelines. He has no interest in legalized marijuana and is not pro-cannabis in any way, but here is where the catch-22 comes in, Mitch represents Kentucky and Kentucky farmers are going all in on hemp as tobacco sales in the US continue to slide. Kentucky sees hemp and CBD derived products from hemp as a HUGE cash crop for their state and something that is already creating hundreds of jobs and tax revenue in the state.

Mitch was not to happy when truckloads of his Kentucky hemp that was getting shipped by truck across the US was getting stopped by state police. Police believed some of the crops to be marijuana, or just couldn’t tell the difference, and started arresting truck drivers. The Safe Banking Act hopes to clarify some of these issues around hemp and CBD hemp and separates them out from the marijuana side of banking.

This puts Dr. Evil in a tough spot. On one hand he has to support and champion hemp and hemp derived CBD for the farmers in his state. Being a staunch Republican, he has no interest in furthering the legalization of the THC version of the plant. He has to walk the line of supporting hemp and CBD from hemp but blocking THC legalization and any form of perceived Democratic victory on cannabis legalization. Will adding the firearms protections and hemp CBD clauses entice him to bring the bill to a vote in the Senate? Will 91 Republicans voting for bill in the House push him towards opening a discussion on the bill in the Senate? Time will tell, but most industry insiders are not optimistic about seeing a bill passed in the Senate anytime in the near future.

As regular readers of Cannabis.net know, we have been big proponents of the Safe Banking Act for a variety of obvious reasons but also for a few clandestine reasons as well. Not only will this act allow financial institutions to work with state licensed cannabis companies without fear of federal retribution, but it will also allow those same institutions a clearer path to "first mover" advantages on investing and financing those businesses. Banks, VCs, angels, and private equity will all feel much safer in starting to invest in cannabis if they are not at risk of losing their US banking licenses, US dollar account access, and access to the SWIFT bank wire transfer system.

The other long shot we have discussed on the site over the past year is whether Donald Trump, if faced with a tight race for re-election would do something drastic to legalize cannabis at the federal level in some fashion. He could issue an executive order removing cannabis form the Controlled Substance Act or order the DEA to reschedule cannabis to a much less stringent and strict listing.

With marijuana legalization support at all time “highs” with voters on both sides of aisle, will we see Mitch McConnel blink and bring the bill to the senate floor? Not likely, Dr. Evil hates weed, and the only thing he hates more than weed is a Democrat. He has no interest in helping anything get passed that Democrats could clearly claim as a victory heading into the 2020 election season. His only interest it in protection hemp farmers in his states and gun rights across the country.

Will Donald Trump use cannabis legalization, and take away one of the Democrats’ talking points on election? Maybe, it would be a smart move for him to gain support among non-decided voters but with leading Democrat Joe Bidden recently stating in a Democratic debate he would keep marijuana possession as a misdemeanor crime, as opposed to legalization, maybe Donald Trump is the best answer for cannabis legalization in the next 4 years. Trump is very active follower of his approval ratings and wanting to be like and loved, so if enough people want it, he just might do it.