The Cannabis Banking Bill was passed in the House of Representatives on the 19th of April 2021 in a vote of 321-101. Known as the SAFE Banking Act this is not the first time it has succeeded in achieving approval as a former bill was passed in the House in 2019. However, with the support it now has from both sides of the House and a Democrat as Senate leader, it may be that this time around it could stand a chance of actually becoming law.
Well! Maybe law is a bit of a misnomer. Passing this Act would not actually legalize anything. All it would do is give banks permission to do business with the cannabis industry. That would allow banks to offer bank accounts, credit facilities, and loans, and enable businesses to accept credit cards.
The lack of normal banking facilities has long been an impediment to the expansion of cannabis-related businesses, especially small and medium operators who have not had cash in hand to invest. This has allowed larger cash-rich businesses to dominate the market paying large sums for operating licenses. This, despite states often saying that they want diversity and a market open to all groups.
The Democrat Position
This Bill also raises some questions for Senate Majority Leader Chuck Schumer. He has said he supports a SAFE Banking Act but would like to see it as part of a wider comprehensive marijuana law. However, he is having to consider the position of President Joe Biden who does not appear to be quite so keen to support a sweeping legalization law. The result could be watered down to just decriminalization, expunging the criminal records of people with minor pot possession convictions.
He also has to weigh up what support, if any, he will get from Republicans. The previous attempt failed to gain traction in the then Republican-controlled Senate. As the Senate is now evenly balanced it will still require the support of sufficient Republicans as the Act will be susceptible to the filibuster. This means that to pass it requires 60 votes, so assuming all Democrats support it, 10 Republicans would also need to vote in favor.
The Republican Position
Senate Minority Leader Mitch McConnell might lean in favor on this occasion as passing the Bill would also make it easier for hemp farmers to do business with banks. Despite hemp being legal banks have still been reticent to offer facilities because of the possibility they could fall foul of Federal laws still in place. Having said that there is still the potential for Republicans to just decide to block the Bill as a means of displaying their ability to do so in a finely balanced Senate.
One could also view this piece of legislation as an indication of how likely any other marijuana legalization proposals will fare. Republicans must be aware that with the increasing number of states legalizing the use of cannabis for medical, and in some cases recreational use, the public, whose votes matter, are increasingly in favor of relaxing the current legal position. If this law passes there may be hope for further movement. If it fails then any hope of the Democrat’s desire to legalize marijuana may well be dead and buried!