If Chuck Schumer Supports Marijuana Legalization, Why Did He Nix a Bill That Would Have Helped Pot Businesses Use Banks?

This week, President Joe Biden signed the National Defense Authorization Act for Fiscal Year 2022 into law. While the House originally passed the bill, it included provisions that would have promoted banking services to state-licensed cannabis businesses. However, these provisions were dropped by negotiations with the Senate.

It was the fifth approval of such legislation by the House. The latest bill, Secure and Fair Enforcement (SAFE), Banking Act of 2021 had strong bipartisan support. The bill was also supported by 41 senators representing both major parties. But Senate Majority Leader Chuck Schumer (D–N.Y.), a latecomer to marijuana reform who now says he wants to repeal federal prohibition, insisted that the bill be removed from the NDAA.

Stranger yet, Schumer was joined by the Drug Policy Alliance, which supports legalization of marijuana, in calling for the repeal of the SAFE Banking Act.There are Less than 72 hoursAdvocates like yourself can speak out immediately to ensure that the SAFE Banking Act is kept out of the omnibus bill.Maritza Perez (director of national affairs for the DPA), warned that this was true in an “urgent action alert” issued December 3. The header stated, “Don’t let Congress prioritize Marijuana profits over people.”

It is a puzzleful turn of events that illustrates the long-running debate over whether reforms to drug policy are too fragmentary and undermine efforts for more significant and consequential change. This also shows the rift between old allies that agree marijuana prohibition needs to end, but are divided on how and when to make that happen. This clash pits many Democratic senators in the House against Senate leadership. It also brings out ideological differences among libertarians and progressives, who for decades have been opposed to the war on drug.

The SAFE Banking Act, which Rep. Ed Perlmutter (D–Colo.) Rep. Ed Perlmutter (D-Colo.) introduced the SAFE Banking Act last March to address a longstanding problem in the cannabis industry. Since marijuana is still illegal on the federal level financial institutions won’t allow businesses to distribute or manufacture it. This applies even if those states have licensed them.

Even basic banking services, such as checking accounts, could be subject to federal criminal and forfeiture laws. Federal prosecutors and regulators have the sole power to protect them. Their policies and practices can change anytime. This risk is so chilling that state-licensed marijuana businesses are left with very few options for covering their employees’ expenses, paying taxes or borrowing money. This has led to an overreliance on cash that makes it more susceptible to theft and other workarounds that could fail quickly.

This problem is addressed by the SAFE Banking Act, which protects financial institutions serving “cannabis-related legitimate business” from any regulatory sanctions such as losing deposit insurance. The bill also bans banks from directing regulators to close a marijuana supplier’s bank account for any reason other than a valid reason. This cannot be based on “reputation risk.” According to the bill, revenue from state-legal cannabis businesses is no longer considered unlawful proceeds. This means that banks who accept these deposits will not be implicated in money laundering. The bill also says that loans and other financial services provided to state-licensed marijuana companies cannot be used as a basis for criminal, civil or administrative forfeiture.

Perlmutter’s bill was co-sponsored by 180 House members, 26 Republicans included. The House passed it in April, by 321 votes to 101. It was supported by 106 Republicans. Perlmutter’s September amendment to the NDAA adding the SAFE Banking Act was passed by voice vote. However, the SAFE Banking Act hit a wall with Chuck Schumer. Senator Majority Leader Chuck Schumer is currently working to a bigger bill which would eliminate marijuana from the federally prohibited drug list.

KTVH, the NBC station in Helena, Montana, reported that Schumer and Sen. Cory Booker (D–N.J.Schumer, who collaborates with him on legalization bills, said that he and Sen. Cory Booker (D-N.J.) “wanted to delay the banking provision until a larger marijuana bill can be approved.” The two men “said that it was important to ensure the final marijuana policy addressed restorative justice concerns like decriminalization or expungement.”

Perlmutter didn’t like it. Perlmutter stated in a press release that “people are still being killed, and businesses are still being robbed due to a lack of actions from the Senate.” “The SAFE Banking Act is sitting in the Senate since 2003. Every day that passes, their inability or unwillingness to act on this issue harms and endangers companies, employees and communities all across the country.

Perlmutter spoke out about his grievances in an interview. Marijuana MomentKyle Jaeger is the author. Perlmutter declared, “You have heard me ire and my irritation because people get killed; they are getting robbed.” This is because it doesn’t make any sense, especially considering the safety of minorities and their business. Without the ability to have banking, many small businesses—veteran-owned organizations, women-owned businesses—don’t have access to capital.”

As Jaeger noted, House Rules Committee Chairman Jim McGovern (D–Mass.) Schumer was attacked during an earlier meeting of the committee. McGovern stated, “I don’t know the root of his problem.” “But what he’s doing is he’s making it very difficult for a lot of small businesses…to move forward and to expand and to hire more people.”

Rep. Adam Smith (D–Wash.As chairman of House Armed Services Committee, Smith played a key role in negotiating final versions of the NDAA. He also opposed Schumer’s obstruction. He stated that it was dangerous to have the SAFE Banking Act without practicality. He noted that state-licensed cannabis suppliers must “basically run a cash company” and can “not do the usual banking” as other businesses.

Sen. Rand Paul (R–Ky.) Senator Rand Paul (Republican from Kentucky) was also critical of Senate Democrats’ decision to repeal the SAFE Banking Act. He said that Democrats control the Senate, House and White House but they are still unable to pass cannabis banking reform legislations. notedTweet. This should not be difficult, since so many states have already legalized it and businesses need to continue operating. Paul was one of 40 senators, including nine Republicans, who cosponsored the Senate version of the SAFE Banking Act, which Sen. Jeff Merkley (D–Ore.) In March, he introduced the bill.

Schumer, as DPA views it, made the right decision. The “Big Industry” is trying to persuade lawmakers to allow the sneaking of these items. [SAFE Banking Act]Perez complained that the National Defense Authorization Act must be passed. She sent her message to supporters. “While we agree marijuana businesses, like any other businesses, need access to banking services—and in fact, the DPA-supported MORE Act would fully fix the banking issue—we cannot do so at the expense of equity and justice for Black, Latinx and Indigenous communities that have borne the brunt of prohibition. Slipping [the SAFE Banking Act]Congress sent a clear message through the Defense Authorization Bill before moving on to the MORE Act. It is sending the signal that the industry operators and multi-state actors take precedence over those countless individuals whose lives have been destroyed by punitive and racist drug policies.

Jerrold Ndler, chairman of House Judiciary Committee introduced the Marijuana Opportunity Reinvestment and Expungement Act. It was passed in a historic vote in December. The bill would “fully solve the banking problem.” Importantly, it would declassify marijuana. This would resolve the unsustainable conflict between the Controlled Substances Act, state laws that allow recreational or medical use of marijuana and those that require the automatic expungement federal marijuana convictions.

The bill’s 90 pages also include some controversial provisions such as an 8 per cent federal excise duty on marijuana and new regulations. These new programs are designed to help “socially, economically and disadvantaged” individuals and those adversely affected by the War on Drugs. Schumer’s draft Cannabis Administration and Opportunity Act on July 14 doubles that approach. This bill is more than twice the length of the MORE Act. It envisages heavy federal regulation. The federal excise taxes on marijuana would start at 10% and rise to 25% in the fifth year. These would come along with often expensive state and local taxes.

An alternative bill that Rep. Nancy Mace (R–S.C.) In November, Rep. Nancy Mace, R-S.C., unveiled a new bill, The States Reform Act. This alternative bill taxes marijuana at 3 per cent and defers to state policies. Geoffrey Lawrence (director of drug policy for Reason Foundation, which publishes this site), gave technical feedback and model language on Mace’s drafts. The States Reform Act is expected to be more popular than the MORE Act. It was supported by a few Republicans last year and Schumer’s bill. Lawrence states that the States Reform Act, a simple bill that deals with the core of the issue most people agree upon when it comes down to federal cannabis legalization, is “relatively straightforward”

There are many factors that can influence the outcome of the competing bills. But, aside from the merits of the policies of the different bills, the critical question is which one is likely to achieve federal prohibition’s end. The Senate composition and access to the legislative filibuster make it seem that Democrats have been acting as if Republicans do not matter.

It is both a tactical issue and a moral one, as the SAFE Banking Act debate has been. This bill, which would already be law but for Schumer’s opposition, would make a big difference for marijuana producers and distributors—including, as McGovern noted, “minority-owned businesses.” The SAFE Banking Act is being dismissed as favoring “big industry,” which “prioritizes.”[s]”Marijuana profits over people”, the DPA neglects those it is supposed to assist: the business owners as well as their potential and current employees and customers. Libertarians as well as conservatives, who are against prohibition but don’t see anything sinister about “profits” from supplying consumers with the products they desire, will be offended by its anti-capitalist rhetoric.

The DPA tried historically to make a large tent welcoming people from all ideologies. The majority of speakers and conference attendees leaned to the left. However, there was an important contingent of conservatives as well as libertarians at these conferences. DPA honored liberty icons like Milton Friedman or Thomas Szasz. This is a marked departure from the previous approach.

Was there any fear that the solution to the banking problem would reduce the demand for larger reforms? The DPA was more resolute than its previous position when the House adopted the SAFE Banking Act 2019. However, Queen Adesuyi of DPA expressed concern about the fact that the bill would make it harder for the MORE Act to pass by taking momentum from cannabis reform. It was a mistake by the House to pass an industry bill without passing comprehensive legislation that prioritises equity and justice in the best interests of the communities most affected by prohibition.

Any piecemeal reform could face the same opposition, which includes decriminalization low-level drug possession and legalization medical marijuana. There are also less severe drug sentences. The DPA supports all of these causes, based on the principle that what is possible now should be used to build on later. DPA supports harm reduction. This concept encourages immediate positive changes as well as a longer-term fundamental rethinking of the war against drugs.

Personally, I was concerned about legalizing medical marijuana. I feared that this would backfire on prohibition and make it more difficult to repeal. However, I was mistaken. Medical marijuana actually laid the foundation for wider legalization as many diehard drug fighters believed it would. And in the meantime, at least some people—state-approved patients, growers, and dispensary operators—did not have to worry about being arrested for something that never should have been a crime to begin with.

The SAFE Banking Act would also improve many lives that are currently affected by the federal prohibition on marijuana. The SAFE Banking Act would legitimize a sector that will not disappear and Congress must eventually find a way.

Ethan Nadelmann founded the DPA in 1994, and ran it for 23-years. He recently spoke out to discuss the tension between short and long term goals. ReasonNick Gillespie is Nick’s name. Nadelmann suggested that New York lawmakers who insist on “a more just and socially-just legalization plan” might have prevented legalization from being implemented in the state, but they ultimately achieved it. This made Nadelmann’s final bill much better than expected. But “Congress is a different situation,” he said, and “a strategy of holding off on doing the incremental stuff, like safe banking, until we get the broader legalization, when we know broader legalization is not gonna happen for years…may well not work on Capitol Hill.”

Nadelmann said that he recalls conversations with libertarians during his first days of activism. Nadelmann said that they didn’t initially recognize the importance of “the nitty gritty” because policy must evolve incrementally. They eventually came around and adopted harm reduction strategies that didn’t end prohibition, but did reduce some of the worst consequences. This lesson needs to be retaught by the DPA.