SAFE Banking Removed from National Defense Authorization Act (NDAA)
By: Andrew Cooper, Esq. and Terran Cooper
The Secure and Fair Enforcement (SAFE) Banking Act, previously passed in the House’s version of the NDAA, has been removed from the omnibus defense spending bill in Congress. In the latest bicameral deal, a conference committee removed the provisions allowing for the protection of financial institutions working with state-legal cannabis businesses. The SAFE Banking Act provisions would have allowed for cannabis businesses to access banking and financial services, one of the biggest challenges currently facing the cannabis industry.
This comes despite the recent robberies to cannabis businesses, as their lack of banking access necessitates substantial cash-only transactions. Advocates argue that the continued lack of banking access poses a significant public safety concern. These recent robberies are significant in that they seem to reflect a more brazen approach and have resulted in the exchange of gunfire between robbers and security personnel. It is also relatively apparent that these robbers have been emboldened by the fact that police officers seem to be reluctant to intervene.
Senate Majority Leader Chuck Schumer and Sen. Cory Booker were both outspoken in their disapproval of the SAFE Banking Act as a standalone bill. Both Senators expressed their desire to instead pass broader legalization bills and those inclusive of social equity initiatives. Some groups, such as the Drug Policy Alliance, have similarly voiced their concerns over passing the SAFE Banking Act before wider reform. Smart Approaches to Marijuana (SAM), a group opposed to cannabis legalization and commercialization, took partial credit for the removal of SAFE Banking provisions from the NDAA. Dr. Kevin Sabet, the president of SAM released a statement regarding the exclusion alongside a tweet by SAM with the message “WE DID IT!”
Rep. Ed Perlmutter (D-CO), the lead sponsor of the SAFE Banking Act ultimately did not force a vote on the amendment in the House Rules Committee. Rep. Perlmutter, Rules Committee Chairman Jim McGovern (D-MA), and Rep. Adam Smith (D-WA) all spoke on their frustration at the removal of the SAFE Banking Act. Chairman McGovern stated in regards to Majority Leader Schumer: “what he’s doing is he’s making it very difficult for a lot of small businesses—and minority-owned businesses, too—deal with the issue of cannabis to be able to move forward and to expand and to hire more people,” as reported by Marijuana Moment.
Rep. Smith similarly stated, “The impact of this, as a practical matter, to not have the SAFE Banking Act is incredibly dangerous.”
Rep. Perlmutter spoke on the lack of access for capital not only for multi-state operators, but for small businesses, veteran-owned organizations, and women-owned businesses as well.
“You have heard my ire and my irritation and my anger because people are getting killed. They’re getting robbed. And we’re making no moves,” Perlmutter said. “We now have made some advancements, but this thing’s been sitting there for three years.”
Perlmutter and the other supporters of the SAFE Banking Act chose not to insert it due to the Senate’s objections and fear of stalling the overall defense bill.
There have been quite a few instances of groups and individuals urging for the inclusion of the SAFE Banking Act in the NDAA. The American Bankers Association, the United Food and Commercial Workers Union, Credit Union National Association (CUNA), bipartisan members of the Senate Armed Services Committee, Colorado senators, and some small cannabis business owners are just some of those who spoke in favor of SAFE Banking.
The SAFE Banking Act wasn’t the only cannabis-related amendment left out of the NDAA. The amendment filed by Senators Dianne Feinstein (D-CA) and Brian Schatz (D-HI) to streamline the application process for researchers studying cannabis was similarly excluded. Sen. Schatz’s separate amendment to legalize medical cannabis for military veterans was also left out.
While many were hoping to see some federal cannabis reform in 2021, it seems the industry must look to 2022. Time will tell if Senate Majority Leader Schumer can succeed in passing substantial cannabis reform in the Senate. Schumer has also stated his openness to banking reform inclusive of social equity provisions as another avenue for change.
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