While year-end headlines painted a pessimistic picture for the future of federal cannabis reform following the failure of the 117th Congress to pass the SAFE Banking Act, like every new year (and new Congress) there are new opportunities presented.
To be clear, congressional inaction on SAFE – after so many promising steps forward and with so much at stake from both a public safety and economic standpoint – was gravely disappointing.
Given almost half of the states have legalized adult use, this continued lack of equal access to banking and traditional financial services for thousands of state legal businesses is devastating.
Companies are downsizing rather than planning for growth. Entrepreneurs once poised for a new opportunity are now unable to enter this emerging industry. Many in business are forced to shutter operations altogether. And the entire remaining industry, its employees, and its consumers and patients remain at high-risk of criminal activity as they have no option but to operate in cash-heavy transactions.
It is for all these reasons and more that the SAFE Banking Act must move forward expeditiously in the new Congress before more harm is caused by further inaction.
The good news is we are not starting from zero. In fact, we are starting off 2023 stronger than ever given the progress made in the final weeks of 2022. Most importantly, we reflected on what went right and wrong, because the true failure would be if we don’t take the lessons learned and keep pushing forward.
The broad consensus was that inaction on SAFE came down to Senate leadership. The willingness of a handful of opponents in the minority to use their power in a 50/50 Senate to be obstructionists towards SAFE’s inclusion in a bipartisan package was underestimated by both Democrat and Republican negotiators. Undoubtedly, majority leadership should have moved SAFE earlier in the year when there was still time on the calendar to advance as a standalone bill. This highlights the importance of starting this process in the Senate early, while also appreciating that having a true majority for procedural purposes and the retirement of some key opponents should mitigate some of the challenges of the previous Congress.
These shifts in dynamics should also be helpful when looking at another lesson learned regarding the importance of regular order. Had SAFE gone through the committee hearing and markup process, many of the last-minute concerns raised would have already been settled. Furthermore, it’s impossible to count votes on a hypothetical package. The fact that the text of a compromise package was never put forward created excessive challenges when it came to bolstering support and addressing concerns of something undefined. It is welcome news that given the many discussions at the end of the year, Senate Banking Committee Chairman Sherrod Brown (D-Ohio) has signaled his support for negotiated language and his willingness to hold a hearing on it in the new Congress. Across the Capitol, incoming House Financial Services Committee Chairman Patrick McHenry (R-N.C.) has also pledged to have an “open process” on SAFE Banking even though he has not previously supported the bipartisan bill.
Lastly, it became clear to cannabis advocates during our many SAFE conversations on the Hill that while 37 states now have some form of legal cannabis program and there are many champions in Congress, there remains a lack of understanding among some lawmakers of the complexities and sophistication in which this unique industry operates. There is no more effective mechanism for industry to address this educational learning curve than by moving SAFE through regular order. This allows for expert testimony opportunities and input on needed changes. Additionally, Congress is witnessing a generational shift (including the election of the first Gen Z member of Congress), which we have also seen correlate with a growing understanding of and support for federal cannabis reform — not just among lawmakers but also the general public. With new champions like Sen. John Fetterman (D-Pa.) to help educate his colleagues and more states establishing or expanding programs where constituents will educate their representatives, Congress as a whole will become more informed on this growing industry, the opportunities it presents, and the barriers holding it back.
We continue to push for federal cannabis reform in the 118th Congress, bolstered by the progress made through bipartisan negotiations at the end of 2022 and with the continued support of the united and diverse cannabis alliances that came together and worked so hard to try to get SAFE across the finish line last year. We all agree that more comprehensive reform is needed to include righting the wrongs caused by prohibition, access to capital markets, and ultimately, federal legalization. But we cannot move forward until a first step is taken.
And to any members of the House or Senate who would oppose this public safety measure, a reminder that federal cannabis reform is supported by a majority of Americans – including 73 percent of Republicans who agree that legal state-sanctioned cannabis businesses should be entitled to the same rights as other legal businesses. Our door is open to any members of the 118th Congress who would like to better understand the importance of passing the SAFE Banking without delay
Saphira Galoob serves as executive director of the National Cannabis Roundtable, an alliance of cannabis companies and ancillary services and solutions providers, that seek cannabis reform that nurtures the nascent domestic industry, protects consumers, and advances social equity.