The US cannabis industry takes another punch in the stomach as Kaiser McConnell scraps the SAFE Banking Act again.
On Tuesday, US cannabis stocks fell sharply after hopes of cannabis regulation reform were dashed in Congress. In particular, acceptance of a cannabis-focused proposal in the National Defense Authorization Act (NDAA) is in doubt, as concerns have been raised by a prominent opposition.
Republican leaders have resisted attempts to include a draft Secure and Fair Enforcement (SAFE) Banking Act in the annual National Defense Authorization Act (NDAA). The SAFE Banking Act, if passed, would prohibit federal bank regulators from levying fines on banks and other financial institutions that provide services to legal cannabis companies.
Democrats are campaigning for cannabis banking regulations to be included in the NDAA and approved by the Senate before losing control of the House of Representatives next year. However, the Democrats seem to be running out of time. In July, the House of Representatives passed the NDAA, which included the SAFE Banking Act. But the Senate’s handling of the cannabis bill this year is similar to the chamber’s approach a year ago, when senators also removed it from the NDAA.
opposition from Republican leaders
For the past week, investors have buoyed cannabis stocks in hopes that the SAFE Banking Act, which was annexed to the NDAA by sponsor Rep. Ed Perlmutter in July, would be included in the final draft of the mandatory annual defense funding measure. It appears that Mitch McConnell, the Senate Minority Leader, opposes its inclusion, claiming that the introduction of SAFE Banking would make the banking system more illegal-substance friendly.
According to Mitch McConnell, Senate and House Democrats are still delaying efforts to complete the NDAA by stuffing in irrelevant stuff unrelated to defense. McConnell further noted in the Senate Tuesday that such an attempt would be a jumble of pet priorities, such as: B. making our financial system friendlier to illegal narcotics, or the bogus, politicized license change and naming language that failed to acquit the Senate earlier this year.
The Kentucky Republican’s criticism is not encouraging for SAFE Banking’s chances of becoming a member of the NDAA, since board approval is required for SAFE’s inclusion. Although ten Republican senators could still vote in favor of the proposal, it’s not the easiest route.
Mitch McConnell’s opposition to SAFE Banking is nothing new to him; As Senate Majority Leader during the Trump administration, he has consistently rejected any attempt at federal reform.
More recently, McConnell chastised Democrats earlier this year when SAFE banking was included in the House of Representatives’ bill of the America COMPETES Act. He commented that Democrats are too desperate to take action on cannabis banking. Undeterred, President Biden approved the CHIPS and Science Act later that summer. It was essentially derived from the US Innovation and Competition Act and its House counterpart, the America COMPETES Act.
What’s next for the Democrats
The NDAA was announced Tuesday with no mention of cannabis, dashed any hopes of legislation authorizing cannabis banks to be passed by the end of the year. The House of Representatives earlier this year approved a version of the NDAA that includes the text of the SAFE Banking Act. The SAFE Banking Act has so far received broad bipartisan support, and it is believed Republicans have opposed using the NDAA as a vehicle for this reform.
According to Bloomberg, top Democrat supporter, Sen. Jeff Merkley of Oregon, announced Wednesday that he would seek to add SAFE banking to a omnibus budget bill before the Dec. 16 deadline.
Democrats don’t work alone. The bill has nine Republican senators supporting the bill, but Democrats need ten to avert a stalemate. Democrats could do marginally better next year with 51 senators in their party, which requires nine Republicans — which they already have, assuming no bipartisan co-sponsors have a change of heart.
Montana Sen. Steve Daines, the key Republican supporter of the bill, told Bloomberg on Wednesday that the supporters are meeting with colleagues in the Senate and House of Representatives to see if there is a way forward.
“The priority right now is trying to get it done in this Congress before the end of the year and we’ll see what happens after that,” he told Law360. After that, the chances drop drastically.
Another option is to merge SAFE Banking with another cannabis-related bill. For example, the HOPE Act would use federal funds to pardon state-level cannabis convictions. But in an unexpected twist, two Republicans who support SAFE Banking are strongly opposed to the bill being linked to other accounts.
“If this legislation hasn’t had the strength and the legs to have time on the ground, the thought of adding all that to an omnibus that no one gets to read before they vote is utterly despicable to me,” said Sen Cynthia Lummis , R-WY. According to Sen. Kevin Cramer, R-ND, adding SAFE banking to an otherwise unrelated bill “dilutes the very purpose of this place.”
If SAFE Banking is not included as an extension of the NDAA, it may be deferred until the FY2023 omnibus discussions. SAFE banking could be reintroduced in the house, which has already existed seven times. However, the trials would continue in the absence of the bill’s lead author, Rep. Ed Perlmutter, D-CO, who is leaving Congress.
“We successfully raised the issue and got everyone’s attention,” Perlmutter told Law360 after SAFE Banking was removed from the NDAA. “So we have to do it now.” There is still time.” Other politicians will pick up where Perlmutter left off. Congressional Cannabis Caucus Co-Chair Rep. Earl Blumenauer, D-OR, stated that the campaign to pass SAFE Banking will not end until the last few minutes.
The discussion about SAFE Banking did not necessarily take place in a bubble. Last week, 44 state banking associations and the Independent Community Bankers of America (ICBA) wrote to Senate leaders encouraging them to consider the SAFE Banking Act as a stand-alone bill or as an amendment to other laws before the end of the year.
On the day, cannabis stocks in the United States, represented by the MSOS ETF, plunged 12.84%, remaining just below Monday’s trading volume of 11.44 million. Tilray Brands (TLRY) and Canopy Growth (CGC) fell 13.25% and 16.44%, respectively.
MITCH MCCONNELL ON WEED, READ MORE…
WEED WILL BE LEGAL IN THE US IF MITCH MCCONNELL SAYS SO!