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The refreshing wave of good news from Washington DC that buoyed the U.S. marijuana industry in late summer might have peaked, with fresh hurdles emerging that could make it harder for Congress to pass cannabis banking reform.
On the bright side: Multiple Capitol Hill observers told MJBizDaily the odds remain good that the U.S. Senate will pass the SAFER Banking Act, which would provide protections from federal prosecution for financial institutions offering services to state-legal marijuana businesses.
The legislation passed a key Senate committee in late September. Expected full Senate passage would be another historic first.
But now, even as some key House members signal opposition to the latest Senate version of the bill, new complications that have nothing to do with banking reform – or marijuana at all – are clouding the outlook.
Nearly all business in Congress is frozen until there’s a resolution to the ongoing palace drama in the House of Representatives.
As of Thursday evening, the Republicans who hold a slim majority in the chamber had yet to select a replacement for the ousted speaker, Rep. Kevin McCarthy.
And whenever “normal” functions do resume, federal lawmakers will have a long list of must-do priorities before they can attend to a cannabis banking bill.
These include passing another spending bill to dodge a government shutdown before a mid-November deadline as well as addressing the fresh and escalating war in Israel.
Another complicating factor: Both Louisiana Republican Rep. Steve Scalise, whom House Republicans nominated for speaker, and the presumptive second choice, Ohio Rep. Jim Jordan, are notorious opponents of marijuana-policy reform.
By late Thursday, House Republicans found themselves in even more turmoil after Scalise announced he was exiting the speaker’s race, having failed to garner enough support to win the gavel.
“It’s not as if it was easy before all this,” said Justin Strekal, a political organizer and consultant as well as NORML’s former political director. “And this does make it harder.”
Senate still committed
Most observers agreed that at least in the Senate, the bullish political picture that emerged in late September hasn’t changed.
Majority Leader Chuck Schumer, who has spent significant political capital lobbying for the bill, wants the SAFER (Secure and Fair Enforcement Regulation) Banking Act passed.
And Schumer believes a full Senate floor vote will reveal the 60-plus fellow senators in support necessary to pass a bill under filibuster rules – with the conventional wisdom holding that he would not have pushed for the Sept. 27 Senate Banking Committee markup hearing and vote if he wasn’t confident of passage.
Schumer still plans on pushing a “SAFER-plus” package, with Republican-friendly gun-ownership rights and Democratic-friendly marijuana arrest-record expungements included.
A full Senate floor vote – a first for SAFER Banking – could happen in the chamber’s work period that begins next week and ends shortly before Thanksgiving, said David Culver, senior vice president for public affairs at the U.S. Cannabis Council.
“My impression in the Senate is that the leader is going to go about his business, regardless of what’s going on in the House – that’s for the House Republicans to sort out,” Culver, whose group lobbies for most of the country’s biggest marijuana multistate operators, told MJBizDaily.
That’s despite another possible government shutdown looming in the middle of that work period, with the 45-day temporary spending bill passed to avoid a government shutdown expiring Nov. 17.
“I still think that the intent is to get this bill to the floor in the Senate before Congress has to tackle the continuing resolution (to keep the government running) before they recess for Thanksgiving,” Culver added.
Much to do as clock ticks
Assuming the Senate passes the bill, the House must do the same.
Many observers noted the full House passed SAFER Banking’s predecessor, SAFE Banking, in some form a whopping seven times.
For some industry observers, that record bodes well for the bill’s prospects.
“We feel it’s more of a when, not an if,” said John Mueller, the Missouri-based CEO of Midwest-focused MSO Greenlight.
SAFE Banking “had 321 votes last time,” he pointed out. “We feel like it’s going to pass (the House) – the only question is when it gets on the schedule.”
But this time around, House Republicans are quarreling with bill language.
“In its current state, SAFER Banking will not make it through the House,” Rep. Blaine Luetkemeyer, R-Missouri, told Politico in late September.
Republicans’ main opposition is around bill language that continues Operation Chokepoint, an Obama-era policy they claim unfairly targets gun merchants and other legal industries with anti-money-laundering restrictions.
A Luetkemeyer spokesman told MJBizDaily that the lawmaker’s position hasn’t changed.
This means time for more negotiations on the bill must be found while Israel’s war on Hamas, Russia’s stalemated invasion of Ukraine and the possibility of another shutdown will compete for limited time and attention.
“That’s a bigger potential roadblock than whomever the speaker is,” said Brady Cobb, the Florida-based founder and CEO of vertically integrated Sunburn Cannabis, who’s also been lobbying in DC.
With the unresolved speaker drama and the new foreign-policy questions tacked onto real issues with the bill, “The House side is going to be impossible to predict,” said Morgan Fox, NORML’s current political director.
“I’m not particularly hopeful we will see hearings in the lower chamber before the end of the year.”
Pre-presidential election deadline
Looking ahead, the new year will introduce another new wrinkle: the 2024 presidential election.
Most observers repeated another nugget of accepted wisdom: Congress will have little attention for stand-alone bills once election season is in full swing.
That means if SAFER Banking can’t get through the Senate and the House and to President Joe Biden’s desk before March, when the first state primary elections begin, the chances this Congress can pass the bill will diminish significantly.
Yet some bright spots remain on the horizon, particularly when one considers the Biden administration’s recent rescheduling recommendation, several industry executives said.
The Department of Health and Human Services’ recommendation in late August could become federal law sometime in the middle of 2024 and would solve marijuana businesses’ federal tax woes.
That’s also a demonstration that SAFER Banking – while seen as a requisite step before Congress can consider and pass other, more ambitious bills such as federal legalization – isn’t as important as it once was.
“SAFER Banking is a great bill, but the bigger story is Schedule 3,” Sunburn Cannabis’ Cobb said.
“No 28oE, a chance for uplistings (on major U.S.-based stock exchanges), a bigger chance for interstate commerce.”
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