The House of Representatives has now passed legislation five times to make it easier for cannabis companies to access the banking system and process customer payments.
Governors of 23 states have called for the bill to get over the finish line but each effort has fallen short of the president's desk so far. The latest attempt for the bill's passage, called the SAFE Banking Act, is a bit of a bank-shot set to play out in coming weeks.
Advocates, led by Rep. Ed Perlmutter (D., Colo.), want to attach the legislation to the much larger National Defense Authorization bill, the annual “must-pass” legislation to fund military operations around the world that Congress needs to enact by Jan. 1, 2022.
Perlmutter said cannabis banking is relevant here because it's tied to national security issues like drug cartels and foreign money laundering.
‘It's the Senate’
But he’s blunt on the larger reason for the holdup: “It's the Senate,” he told Yahoo Finance Live.
The roadblock, Perlmutter said, are members of his own party. “We've had resistance from Sen. [Chuck] Schumer, Sen. [Cory] Booker, and they would like to have a much bigger piece of legislation.”
The main idea of Perlmutter’s bill is to make it fully legal for banks and credit unions to provide financial services to the marijuana industry in states where the drug is legal. The current gray area – which has hampered the industry for years and often forces businesses to operate as dangerous cash-only operations – arises from the fact that marijuana is legal in many states but remains illegal at the federal level.
Booker (D., N.J.) and others want to push through a larger effort to get at the root cause and solve the banking issue in the process. He has been pushing legislation since 2017 to legalize marijuana at the federal level. In the past, Booker has vowed he “will lay myself down” to block efforts to pass the marijuana banking legislation before larger cannabis reform.
There have also been Republican efforts to push for legalization as well, with Rep. Nancy Mace (R., S.C.) leading one effort. “The only place this is controversial is in Washington, D.C.,” she recently told Yahoo Finance.
“I support all of that,” said Perlmutter, “but I don't think they have the votes for that, and I'm pretty sure the votes in the Senate are there for SAFE Banking.”
Industry analysts have agreed with his assessment. In a research note, Barclays analysts recently said that they didn’t see cannabis being legalized under the Biden administration.
‘I think all of these things will come together’
Nonetheless, it’s unclear whether advocates like Perlmutter can successfully maneuver a banking measure into Congress’s massive annual defense spending bill. It was included in the House version and a bipartisan group of senators are pushing to include SAFE banking provisions in the Senate version, but the overall bill has been stalled in recent days in a standoff over individual amendments.
Perlmutter acknowledged his effort is competing with Congress’s hefty December to-do list. “This month is going to be very busy,” he said. In addition to the military spending bill, Congress is facing a possible government shutdown, a possible debt ceiling default, and the Build Back Better Act, the centerpiece of President Biden’s domestic agenda.
“I think all of these things will come together and move forward together,” Perlmutter said, adding “I'm the eternal optimist.”
Ben Werschkul is a writer and producer for Yahoo Finance in Washington, DC.