WASHINGTON — It’s looking less likely that Congress will make it easier for cannabis companies to get bank accounts.
Senate Minority Leader Mitch McConnell (R-Ky.) on Tuesday came out against adding a bipartisan marijuana banking reform measure to a broader defense spending bill.
“If Democrats wanted these controversial items so badly, they had two years to move them across the floor,” McConnell said in a Senate floor speech. “Heck, they could have scheduled those matters for votes this week.”
At the moment, cannabis businesses typically have to operate in cash because federally insured banks won’t take their deposits. Most states have legalized marijuana for medical or recreational use. But it remains illegal at the federal level, and regulators can sanction banks for accepting deposits from an illegal business.
Since operating in cash can be dangerous, cannabis reformers had hoped Congress would tuck the SAFE Banking Act into the National Defense Authorization Act, an annual spending bill that reliably passes each year. The reform measure would disallow regulators from punishing banks that serve legitimate marijuana businesses.
McConnell described the bill as “making our financial system more sympathetic to illegal drugs.” Because the Kentuckian is influential among Republicans, his opposition makes it harder for Democrats to move legislation through the Senate, where GOP support is crucial.
Democrats had hoped to fully legalize marijuana this year, and the House passed a bill to do so. Despite overwhelming support for legalization among the general public, however, not enough senators agree.
Meanwhile, President Joe Biden has asked federal agencies to review whether marijuana still belongs in the same restrictive category of the Controlled Substances Act as heroin and LSD. It’s not clear how the review will play out.
Democratic leadership could potentially try to leave banking reform in the defense bill as planned and dare Republicans to vote against it. Sen. Jack Reed (D-R.I.), the chair of the Senate Armed Services Committee, said that “discussion is still going on with the leadership” about what riders can go in the defense bill. Other Democrats who support the banking measure said they were continuing to negotiate.
(On Tuesday evening, after this story was published, the top Democrats and Republicans on the House and Senate armed services committees announced a new defense bill agreement that omitted marijuana banking reform.)
Sen. Steve Daines (R-Mont.), the reform bill’s top GOP co-sponsor, told HuffPost on Tuesday that if the measure can’t catch a ride on the defense authorization, then it would still have a chance to be added to a government funding bill that has to pass this month.
“That’d be the next possible must-pass bill where we could have that discussion,” Daines said.
One problem with this approach, though, is that appropriators have been struggling to reach an agreement on how to adjust government funding levels. If they can’t come up with a deal, they may punt on the issue by passing a “continuing resolution” that maintains current funding levels but usually doesn’t allow for extra policy riders.
Another option would be for SAFE Banking to get its own stand-alone vote on the Senate floor. Since the bill already has nine Republican co-sponsors — meaning it’s just one short of the 10 needed to break a filibuster — it could potentially pass on its own. But Democrats have only a few weeks left with control of both the House and Senate, Senate floor time is precious, and overcoming a filibuster takes multiple days.
Morgan Fox, the political director of the National Organization for the Reform of Marijuana Laws, said he was optimistic that Congress would approve SAFE Banking one way or another.
“There’s definitely a lot of appetite for getting something across the finish line this year,” Fox said. “While that appetite might not be as readily apparent on the right side of the aisle, it’s there.”
Sen. Susan Collins (R-Maine), one of the banking bill’s eight other Republican co-sponsors, said she didn’t disagree with McConnell about tying the measure to defense legislation.
“It really doesn’t belong in the defense bill. I mean, it’s pretty hard to make that connection,” Collins told HuffPost. “My support for it is strictly pragmatic. My state has legalized marijuana. I don’t agree with that decision. But the fact is that having a cash-only business available is a recipe for crime, violence and tax evasion.”