In a new paper outlining recommended revisions, a former Los Angeles cannabis regulator argues that advocates must continue to press for modest but meaningful amendments to a bipartisan bill on marijuana banking in order to maximize the social equity impact.
Cat Packer’s analysis, as vice-chair of the Cannabis Regulationists of Color Coalition (CRCC), and director of Drug Markets and Legal Regulation at the Drug Policy Alliance(DPA), is timely as Senate Leaders plan to take action on the Secure and Fair Enforcement Banking Act (SAFE) within the next few weeks of this work session.
Packer insists that the “F” of SAFE cannot be compromised. She says that fairness is a key element of reform. While advocates have been able to secure “minor, but meaningful” changes to the legislation this year compared to last Congress’ version, they argue that more can still be done.
She wrote: “Despite the ongoing debate about the implications of protecting financial institutions before adopting comprehensive and impactful reforms of cannabis, a growing group of advocates and policymakers is taking the position, that if legislators are prioritizing the cannabis banking reform, then the reform – like every other cannabis-related policy issue – can and should be equity centered.”
The paper states that while many cannabis business owners are merely working to pass the SAFE Banking Act, others are trying to improve it. The goal is to make sure that banking is fair, consistent, impartial, and just.
Some of the changes that lawmakers have already included in the legislation include providing mortgage loans backed by the federal government to workers in the cannabis industry and mandating the reporting requirements for market diversity and inclusivity.
Packer’s paper, published by the Ohio State University Drug Enforcement and Policy Center, where she is the cannabis policy practitioner-in-residence, highlights five other recommended changes, which she believes could further enhance the equity impact of SAFE Banking Act.
- Revision of guidance for regulators is needed to stop banks from marking individuals with a “red flag” because they have prior cannabis convictions, even if these records were expunged. Or if the conviction was made legal. These circumstances “shouldn’t be considered as an automatic indicator that a business is engaged in illegal activities.”
- The paper states that the SAFE Banking Act, which requires financial institutions to serve the hemp market to develop best practices, should also apply to the marijuana industry.
- The bill mandates that regulators and Government Accountability Offices (GAOs) study and make recommendations regarding small business diversity reports. However, the language needs to be changed to clarify what small businesses are. The definition of a small business should “be in line with state-level cannabis microbusiness definitions.”
- The GAO mandate to study entry barriers in the marijuana industry needs to be updated so that it includes a “comprehensive” review of “existing legal strategies.”
- The SAFE Banking Act needs to be updated to require that “financial institutions prove compliance with anti-discrimination laws to benefit from safe harbor.”
“Congress will ultimately decide what is politically feasible.” Packer said to Marijuana Moment that his goal was to make sure that Congress passed the best possible version of the SAFE Banking Act.
She said that as someone who is an advocate for underserved community and fair federal cannabis policies, her priority was to ensure that Congress understood the limitations of this legislation, its potential impact if there weren’t any amendments focused upon fairness, and that minor technical changes could improve this bill in significant ways. “If we are only interested in what is politically feasible, and willing to let the politics of policymaking be a barrier to common sense policies which would promote fairness for cannabis banking, I worry what this means for federal cannabis reform generally.”
Packer was a co-author of 2022, which included several of the recommendations made in this paper.
The new paper concludes that “Advocates have helped to nudge the business focused SAFE Banking Act into a better direction which promotes equity.” Their ongoing efforts to promote equity in cannabis banking has allowed for small but meaningful changes. “For a bill with the word ‘fairness’ in its title there is more to be done to make sure the SAFE Banking Act lives to its name.”
Supporters of cannabis banking are waiting with bated breath for a Senate Banking Committee meeting, which the Chairman hopes to have during the current session, ending on October 6. The hearing was held four months ago, when first heard the bill. Packer also testified at the initial hearing.
The leadership had originally planned to move the bill forward during the July session. However, action was delayed because of disagreements regarding a section that is critical to the measure and concerns banking regulations in general.
However, since returning from August recess key players have said that both sides are close to reaching a deal to bring the bill forward. will not take place next week, despite predictions from industry insiders.
Sherrod Brown, the chairman of the Senate Banking Committee (D-OH), said on Monday he hopes to schedule a SAFE Banking Act vote in his panel within the “next few days.”
Chuck Schumer, Senate Majority leader (D-NY), said in a letter to his colleagues this month that ‘safeguarding cannabis banks’ is one of his legislative priorities. However, he stressed the importance of bipartisan support. In a speech on the floor last week, he said that he is committed to “making significant progress” in the fall session.
Currently, the SAFE Banking Act is co-sponsored by 42 senators, which is nearly half the Senate. Eight Republicans and three Independents are also on board. Insiders claim that the SAFE Banking Act, in its current standalone form, has enough Republican support to pass the Senate with 60 votes.
Sen. Steve Daines, the leading GOP sponsor of the cannabis legislation, had previously warned against trying to expand it with social justice reforms progressives wanted to add. However, his office told Marijuana Moment that the senator was “open” to including expungements language as proposed by Schumer.
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The SAFE Banking Act, as it is currently drafted, would protect banks, credit unions and depository institutions from being penalized for working with cannabis businesses licensed by state regulators.
Other people have suggested other changes they would like to see included in the cannabis bill, such as expanding protections for marijuana industry access all forms of financial service, including representative on major U.S. Stock Exchanges.
Other advocates have criticized the request, saying that it would be inappropriate to assist businesses at a time when efforts to legalize cannabis in Congress are stalled.
Sen. Jacky Rose (D-NV), has said that , she wants the SAFE Banking Act passed with an amendment to allow cannabis businesses to have access to federal Small Business Administration services (SBA).
Rep. Earl Blumenauer, D-OR, who is the lead Democratic sponsor for the House version SAFE Banking Act in April, stated at a media briefing that he believes it’s crucial that advocates and legislators align on any incremental proposal to end the war on drugs, cautioning against a “all or nothing” mentality.
The American Bankers Association (ABA), which also renewed its call for passage, did the same. All 50 state chapters of the ABA did the same. Insurance and union organizations also wrote to Congress.
Colorado Gov. Jared Polis, a Democrat, said separately in a letter last week to President Joe Biden that he should support the congressional push for marijuana bank reform at the same time the Drug Enforcement Administration begins its review after receiving a rescheduling recommendations from the top federal agency.
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The article Former Marijuana Regulation Proposes More Equity Revisions to Banking Bill as Senators Plan Committee vote appeared initially on Marijuana Moment.
