Opinion: A new year, a new Congress, and a new chance to pass banking legislation for the cannabis industry

After extended New Year’s fireworks inside the U.S. House of Representatives chamber subsided, the congressional clock, albeit delayed, and the 118^th legislative session gaveled in with a new Republican majority in the House, and a Democratic majority in the U.S. Senate.

It’s a new year. A time to start fresh, a clean slate. A new legislative agenda where bills will be introduced for the first time and old bills will get re-introduced with the hope and intent, they get passed this year.

One bill that is all but certain to be reintroduced is the Secure and Fair Enforcement Banking Act, or SAFE Banking for short. In 2022 the bill came as close as it ever had to getting its day in the Senate but, alas, it ultimately became the proverbial Christmas lump of coal in the cannabis industry’s stocking at the end of the lame-duck session.

What ran out wasn’t hard work, determination or even masterful negotiating or the efforts of Colorado Rep. Ed Perlmutter, now retired. What ran out was time.

The bill had passed seven times in the House, and the Senate never gave it the vote it deserved. The clock was ticking very loudly once the lame-duck session began, where must-pass bills like the National Defense Authorization Act and the Fiscal 2023 appropriations bills remained at the top of the agenda.

There was thought that SAFE Banking could be a rider on one of those bills, but when push came to shove (and there was a lot of that going on behind closed doors and publicly), ultimately SAFE Banking didn’t make it into either final bill, or as a standalone bill, to the Senate floor. Congress was still working on Dec. 23 to finish its legislative agenda, which at times was touch-and-go as the holidays and a massive winter storm loomed.

SAFE Banking continues to have overwhelming bipartisan federal support and support from Colorado elected officials. Both Colorado Sens. Michael Bennet and John Hickenlooper and most members of the Colorado congressional delegation support the legislation. Gov. Jared Polis and governors from both parties have signed a letter in support.

Polis also signed a letter expressing Colorado’s support for the legislation, along with Lt. Gov. Dianne Primavera, Attorney General Phil Weiser, State Treasurer Dave Young and Department of Public Safety Executive Director Stan Hilkey.

U.S. Senate Majority Leader Chuck Schumer claims the bill and its passage remains a priority for him, but the new Republican majority in the House seems less likely to put the bill at the top of its list. This is why the bill should, next time, start in the Senate.

Without SAFE Banking legislation, a noose remains around the industry’s neck as it tries to operate everyday business functions like payroll. It remains unable to accept credit-card payments, meaning it remains mostly a cash business, which comes with public safety risks. No other industry operates this way and simultaneously pays taxes up the wazoo like the cannabis industry does — none. And yet, as the cannabis industry continues to evolve and grow, it also continues to be short-changed by the federal government, unable to work with mainstream banking and financial institutions without risking prohibitive penalties on both sides.

There are, however, some silver linings where cannabis reform is concerned. On Oct. 6, President Biden announced executive actions extending “pardons for federal offenses of simple possession of marijuana,” and he encouraged governors to do the same. Gov. Polis has already been giving narrow pardons to certain types of cannabis convictions like these since 2020. The president also instructed the secretary of the Health and Human Services Dept. and the U.S. attorney general to “initiate the administrative process to review expeditiously how marijuana is scheduled under federal law.”

While it’s unlikely the administration will deschedule marijuana — currently it is classified as a Schedule I drug on the Controlled Substance list — it is taking a hard look at whether to reschedule marijuana to a less stringent classification.

Another announcement, made within weeks of the president’s and coinciding with Colorado’s 10-year anniversary of legal recreational use, came from Sen. Hickenlooper, who said he was introducing the Preparing Regulators Effectively for Post-Prohibition Adult Use Regulated Environment Act. The bill would establish a commission similar to Colorado’s Amendment 64 Task Force and would direct the attorney general to develop a regulatory framework for marijuana that would be enacted as soon as the federal government legalizes it.

Hickenlooper was governor 10 years ago when his administration led the implementation of the regulatory scheme for legal recreational use in the state. His institutional knowledge will be invaluable for federal implementation when it happens. Until then, Sen. Hickenlooper will continue to seek further stakeholder involvement.

As we kick off a new year filled with resolutions and high hopes for cannabis reform, Rep. Perlmutter leaves a legacy of changing hearts and minds on SAFE Banking during his tenure in Congress. And, while there is more work to be done on cannabis reform, he led an important charge on an issue that Colorado, as a leader in the cannabis space, can be proud of.

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