BREAKING: The SAFE(R) Act clears a key hurdle for a full vote

Hi everyone,

Well, it’s a big day in cannabis-world today: Long-awaited cannabis banking legislation is set for a full Senate vote.

No matter what you think of the particulars of the bill or the Senators involved, it’s historic.

More on that below.

What else?

I’m typing this out and dashing to the airport to get to the Benzinga Cannabis Capital Conference in Chicago. My panel, “Here’s How the Northeast Will Become Cannabis Country” is at 11:10 AM tomorrow.

I’ll be joined by Louis Magazzu of Weiner Law Group, Happy Munkey CEO Vladimir Bautista, and Rebecca Kirk of Acreage Holdings.

I hope to see many Cultivated readers there — come say hi!

It’s been a busy few weeks of conference season. Last Thursday I moderated a panel about the complex world of digital cannabis payments at the PBC Conference in Washington DC.

And if you missed it, I joined Kevin Carrillo’s podcast Cannabinoid Connect to discuss my leap to founding Cultivated, New York’s cannabis rollout, and broader drug policy reform.

Give it a listen here and let me know what you think.

-Jeremy

Today’s Cultivated is sponsored by Vangst.

I’ve long-relied on Vangst’s salary guide to understand hiring trends in the growing cannabis industry for my reporting.

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💡What’s the big deal?

What happened: The SAFE(R) Banking Act, a long-awaited cannabis banking bill, cleared a key hurdle on its way to a full floor vote in the Senate.

The bill cleared the powerful Senate Banking Committee by a 14-9 vote.

That’s including a no vote from Sen. Raphael Warnock, who may be more inclined to vote yes on a floor vote if social equity amendments are included.

I want to underscore how big this move is: It’ll be the first time cannabis-related legislation gets a full floor vote in the Senate, with the backing of Senate Majority Leader Chuck Schumer.

Schumer said he’d commit to bringing the bill to a full floor vote “as soon as possible.”

The SAFE(R) Banking Act is complex legislation. It’s far from a done deal, but it’s closer than ever before.

The GOP-controlled House, however, may be a different story.

You can watch the full meeting here.

Back up: It’s been a long and winding road for cannabis banking legislation.

Lawmakers have attempted to pass the bill nine times in the past, by my count, either as a standalone vote or attached to other must-pass legislation.

The House, under Democratic control, has passed the bill seven times previously.

And the difficult political calculus for getting the bill on President Biden’s desk remains.

Longtime Cultivated readers will remember the “tightrope” I laid out that lawmakers have negotiated to get to this point. That was evident in the hearing today.

Politico’s Natalie Fertig and others have also expertly covered the complexity of passing this legislation.

Here’s what both sides are saying

• Progressive Democrats, like Sen. Raphael Warnock, pushed for social equity considerations in the bill and expressed their dismay that a banking bill would advance ahead of full-fledged cannabis reform.

“This bill will make the comfortable more comfortable. I don't believe in trickle down economics,” Warnock said.

Warnock proposed an amendment that would sunset the SAFE(R) Act after five years if the policies didn’t demonstrably improve the lives of those harmed by the War on Drugs.

That’s hard to measure, and his amendment was shot down.

Sens. Elizabeth Warren and Sherrod Brown, prominent progressives, said they agreed with Warnock’s sentiment but still offered strong support of the bill.

“This bill cannot be everything this Congress does on cannabis,” Warren said.

• Republicans seem to view this bill as less about cannabis reform, and more about removing the federal government from decisions about what industries banks can and cannot service.

That has to do with Section 10 of the bill, which prevents banks and other financial institutions from denying services to lawful businesses based “personal beliefs or political motivations.”

That was evident in Sen. Mike Crapo’s comments during the committee today.

Sen. Cynthia Lummis, a Wyoming Republican, laid out the classic argument that while she doesn’t support legalization, she supports small businesses and state’s rights.

I imagine that will be a compelling argument for Republicans moving forward.

But if you think all Republicans are going to fall in line, I encourage you to listen to Sen. Bill Hagerty spout about the bill potentially giving cover to cartels who want to move fentanyl into the US alongside cannabis.

Here’s what the industry is saying

Cresco Labs CEO Charlie Bachtell — also the chairman of the National Cannabis Roundtable, a lobbying group — told me today’s vote was a historic first step.

Bachtell says he thinks there are 61 votes for the bill in the Senate, enough to clear the filibuster threshold.

He added that equity-focused legislation, like the HOPE Act — which would incentivize states to expunge records for cannabis-related arrests — would likely be added to the bill during the Senate vote.

In his view, Republicans like Sen. Steve Daines would be supportive of that.

Bachtell said that even he had been denied a personal mortgage for running a cannabis business, so this reform is much needed.

Other cannabis execs celebrated the vote.

“SAFE will provide urgently needed relief to cannabis businesses of all sizes, as well as for employees who work in the industry and cannot access traditional banking services for their families,” said Curaleaf chairman Boris Jordan.

Still, Jordan cautioned that SAFE has gotten close to finish line before — only to fall short.

The US Cannabis Council, an industry trade group, said the bill “marks a critical step toward securing banking access for the nation’s licensed cannabis industry, which supports 400k+ jobs across the US.”

Here’s what advocates are saying

In a joint letter to Sens. Tim Scott and Sherrod Brown, the Drug Policy Alliance, Cannabis Regulators of Color Coalition, and the Parabola Center for Law and Policy, said that their top priority remains “comprehensive and equitable cannabis policy reform.”

Still, the groups said that the SAFE(R) Banking Act “can and should be equity-centered.”

They said the bill, as written, fails to ensure that past cannabis records are not automatically considered a red flag for banking access, among other issues.

🥊 Quick hits

New York cannabis regulators are planning to issue 1,500 cannabis business licenses when the general permit period opens on October 4, reports Green Market Report.

Some California lawmakers want to ban human faces from cannabis advertising — and minority entrepreneurs say that will hurt business, reports SF Gate.

Legal cannabis labels inflate THC potency contained in products, reports The Globe and Mail.