Cannabis industry goes all-in on banking push before midterms

The cannabis industry is pushing lawmakers to get a marijuana reform bill to President Biden's desk before the November midterms, fearing that a Republican takeover of Congress could doom its chances.

In an in-person lobbying blitz last week, more than 20 chief executives of top cannabis companies urged lawmakers in both parties to pass the SAFE Banking Act, a bill to allow them to work with U.S. banks that the industry is confident will win enough GOP support to pass the Senate.

"There is certainly momentum building around trying to get something done this year in the Senate. On both the Republican and Democratic side we're seeing consensus for SAFE Banking as being the piece of legislation that could pass," Curaleaf CEO Joe Bayern said in an interview.

"We're trying to be practical about how we get something passed this year," he added. "We think the industry needs something to happen this year."

The lobbying campaign comes as Democrats debate how to tackle marijuana reforms, with leading Senate Democrats pushing for a comprehensive bill to decriminalize recreational pot nationally and expunge past convictions.

Cannabis companies say they support those reforms, but stress that an all-encompassing decriminalization bill would not receive the 60 votes it needs to get through the evenly divided Senate.

"We want comprehensive reform, but we also recognize that with the potential for the House and Senate to change hands, we have an opportunity now to pass impactful legislation, and if we fail to do that, it could be years until we get something done," said Jared Maloof, CEO of Ohio-based medical marijuana company Standard Wellness.

The SAFE Banking Act would enable legally operating cannabis firms to use banking services and credit cards. Because pot is still illegal at the federal level under current law, financial institutions could be hit with penalties for working with the companies and are thus reluctant to offer them loans or else typically charge them sky-high rates. Because dispensaries are forced to hold large amounts of cash, they're prime targets for robberies and burglaries.

The legislation, sponsored by Rep. Ed Perlmutter (D-Colo.), passed the House six times in recent years, receiving the support of every Democrat and 106 Republicans when it passed as a stand-alone bill last year.

While the measure has broad support, the cannabis industry needs to sway Senate Democratic leaders, who have expressed concern that if the SAFE Banking Act passes, Congress will consider its work on the issue done and pass up on a key opportunity to enact a more extensive bill.

"If we let this bill out, it will make it much harder and take longer to pass comprehensive reform," Senate Majority Leader Charles Schumer (D-N.Y.) said in an interview with the Psychoactive podcast last month.

Schumer is prioritizing his own legislation, the Cannabis Administration and Opportunity Act, which would remove cannabis from the federal list of controlled substances, expunge nonviolent federal marijuana convictions and direct tax proceeds of marijuana sales to communities that were hit the hardest by the nation's war on drugs.

The cannabis industry's push for the SAFE Banking Act has angered some pro-legalization groups, which say that it does nothing to address marijuana justice.

The Drug Policy Alliance fought to have the bill removed from the defense spending package passed last year, telling its supporters to urge Congress not to "prioritize banking, profits, and big business before long overdue equity and justice for people being harmed by marijuana criminalization."

In meetings with lawmakers, cannabis executives suggested that the banking bill could be coupled with criminal justice and social equity reforms. They point to the HOPE Act, a bipartisan bill from Reps. Dave Joyce (R-Ohio) and Alexandria Ocasio-Cortez (D-N.Y.) that would establish a grant program to help states speed up the process of expunging marijuana convictions.

But if lawmakers cannot find enough votes for criminal justice reforms, the industry says that the SAFE Banking Act should still be prioritized, casting it as a step forward for marijuana justice that will lead to further reforms in the future.

"When you look at cannabis over the last 20 years, it started in California, then went to Colorado, and now it's legal in 37 states medically and 18 states recreationally," Maloof said. "That's all incremental progress. Incremental progress is what got us here, and I'd like to think it's what will take us over the finish line."

The industry wants to include the bill in must-pass legislation such as an omnibus government funding package. They say the timing is urgent not just because of the upcoming midterms, but also because a wave of violent robberies is plaguing weed dispensaries, including an incident last week in Covington, Wash., that turned fatal.

Cannabis industry CEOs met with 60 congressional offices during last week's fly-in, which was organized by the U.S. Cannabis Council, a leading industry trade group. During those meetings, they also urged lawmakers to modify a section of the tax code that prevents marijuana businesses from taking tax deductions, a change that lawmakers are less likely to make.

The executives said that both Democrats and Republicans have a much greater understanding and acceptance of the industry than in years past, an evolution they attribute to skyrocketing public support for weed legalization.

"I can tell you, having been in the industry awhile, the momentum is very positive compared to a few years ago," said Mike Gorenstein, executive chairman of the Cronos Group. "Just the fact that you have 20 CEOs in D.C. out taking meetings with senators and representatives is pretty amazing."