The fate of a bill that would allow U.S. banks to open accounts for marijuana dispensaries says a lot about the odds of the current Congress significantly loosening restrictions on the drug.
The comparatively narrow proposal has yet to get a floor vote even in the Democrat-controlled House, despite broad support among members of the party that regained control of the chamber in 2018.
Among the biggest obstacles is the desire of liberals such as Rep. Alexandria Ocasio-Cortez, of New York, to add social justice provisions that include erasing the criminal records of people convicted of low-level marijuana offenses to any related legislation.
“We’ve shifted in just the past six months or so from, ‘How do we get enough Republican support to move this?’ to ‘How do we get enough progressive Democratic support to move this?'” said Jaret Seiberg, an analyst with Cowen Washington Research Group, which has tracked federal policy for the past four decades. “This goes back to the old mantra that nothing in Washington happens quickly, absent a crisis. We don’t have a marijuana crisis.”
While Congress’ attitude toward marijuana has softened dramatically over the past two years, states are still leading changes in cannabis policy, with 33 legalizing medical use and a dozen allowing recreational use. The most recent to approve recreational marijuana was Illinois, where the proposal passed in the state legislature rather than the more common route of a ballot initiative.
Marijuana has been outlawed in the U.S. since the 1930s, when Congress limited use to people who obtained it for medical purposes and paid a tax when purchasing the drug. Lawmakers added mandatory minimum sentences for marijuana offenses in the 1950s, then repealed them in the 1970s, though cannabis remained illegal and the federal government deemed it both unsafe and likely to be abused.
The War on Drugs, begun during the presidency of Richard M. Nixon, included hundreds of thousands of arrests for marijuana possession and unfairly targeted blacks and Latinos, said Rep. Karen Bass, a California Democrat who believes a portion of the profits from selling the substance if it’s legalized should go toward drug-addiction treatment
A mid-spring poll by the liberal Center for American Progress showed 68% of U.S. residents support legalization, roughly four points higher than a survey by Gallup in October 2017. Gallup first measured public opinion on the matter in 1969, when only 12% of participants supported legalization.
While Senate Majority Leader Mitch McConnell has shown no interest in allowing a floor debate on decriminalizing marijuana, Seiberg said the chamber may go along with more incremental measures such as the banking proposal, especially if it’s tucked into a larger appropriations bill.
That’s the tactic the House used with a measure to block the Justice Department from interfering in state-level marijuana sales earlier this year. It was added to a bill funding the Justice and Commerce departments, which now awaits Senate consideration.
“Marijuana decriminalization may be one of the very few issues upon which bipartisan agreement can still be reached in this session,” Rep. Tom McClintock, a California Republican, said during a July 10 hearing on racial justice issues with marijuana laws. “The present conflict between state and federal law on this matter is no longer sustainable, and it must be resolved.”
The banking bill, better known as the SAFE act, an acronym for Secure and Fair Enforcement, addresses a piece of the disparity.
The unwillingness of financial institutions to handle accounts for marijuana businesses, given the illegality of the substance and the federal regulation of banks, has forced many dispensaries to handle transactions in cash. That heightens the risk of robbery, Bass said during a hearing of the subcommittee on crime and terrorism, which she leads.
It’s a situation that has already created high-profile complaints, not least when Nikki Fried, a Democrat who won the 2018 race for state agriculture commission in Florida, publicly accused Wells Fargo of shutting down her campaign’s account because she supported patient access to medical marijuana.
The San Francisco-based lender blamed the federal prohibition of marijuana usage and sales that bars national banks from serving customers engaged in the business or related activities.
The outcome of a Senate Banking Committee hearing on financial services for cannabis companies, slated for Tuesday, July 23, should offer more insight on the SAFE bill’s chances, Seiberg noted.
That Sen. Mike Crapo, the chairman, scheduled the session is significant since it suggests the Idaho Republican may be willing to let the legislation advance, Seiberg said. Should Crapo criticize the idea, however, the bill may die until the next Congress takes office in January 2021.
“Republicans are already skeptical of the SAFE act,” Seiberg said, and the House debate on attaching social justice measures including reserving cannabis licenses for minorities may slow the proposal down even further.
Input from Massachusetts Sen. Elizabeth Warren, a committee member who’s seeking to challenge President Trump in 2020, and Ohio Sen. Sherrod Brown, the panel’s top Democrat, will offer insight into the effects of liberal demands on the legislation, he added.
As for Republicans, while McClintock personally believes marijuana use is ill-advised, the California lawmaker argued that outlawing it has created a violent underground economy much as the Prohibition laws against liquor did in the 1920s.
“Many things are ill-advised that should not be illegal,” McClintock said, “but rather left to the informed judgment of free men and women.”
