Is SAFER Banking doomed?

SAFER BANKING
Lame-duck pushing for cannabis banking bill sputters

Driving the news: Outgoing Senate Majority Leader Chuck Schumer has long pushed to pass the Secure and Fair Enforcement Regulation Banking Act (SAFER Act), which would essentially normalize the cannabis industry’s banking relationships.

What happened: The upcoming lame-duck session was considered by many to be Schumer’s last chance to push the bill through. It’s passed the Democratic-controlled House multiple times since it was first introduced, but has yet to receive a full floor vote in the Senate.

The bill may have to wait longer. Schumer’s much-discussed push to include the bill — or at least pieces of it — to must-pass spending bills before the end of the year has sputtered, reports Axios. (They specifically used the word “doomed”). 

The publication adds that while Schumer will continue to push for it, the path is slim. And it will get even slimmer when Republicans take control of the Senate next year.

But, but, but: Sen. Steve Daines, the Republican cosponsor of the bill, recently told Politico that he’s also hopeful to get the bill passed.

Either way, there’s far more Democratic support for the SAFER ACT than Republican, which gives it a tough political calculus next year. It’s possible that changes, given President-elect Donald Trump’s recent stated support for cannabis reform. 

Why it matters: The bill would be a much-needed lifeline for an industry where legal businesses are constantly kicked out of their bank accounts, and the regular nuts-and-bolts of finance like borrowing money at reasonable rates and opening lines of credit are still difficult. 

Cannabis also remains a cash-intensive business, as most credit card companies don’t allow customers to make purchases at dispensaries. That poses obvious security risks for employees — multiple dispensaries have been subject to violent robberies in recent years — and poses problems for paying vendors and taxes. 

Our take: Despite the lack of Republican support, the SAFER Banking Act can and should be palatable to those on the right. It doesn’t take a position on legalization. It just helps already-existing small businesses continue to operate so they can expand and create more jobs.

But the bill has been wrapped up in broader banking regulation debates, and whether the SAFER Act or similar legislation could be used to de-bank firearms, porn, and other traditional “vice” industries as well as money laundering rules. That makes passing it a much more difficult negotiation than a narrow cannabis bill. 

It’s also about as incremental as cannabis reform gets, and does little to address criminal and social justice. But the industry should take whatever relief it can get from the federal government at this point.

And more: Sen. Chuck Grassley (R-IA) told Ask a Pol that SAFER Banking would “screw up our money laundering laws,” and “we shouldn't do anything that's gonna encourage more money laundering.”

-JB

“While I can understand why a father would want to have compassion for his son and avoid prison time for his son, we’re really asking for [President Biden] to extend that same compassion to all the folks that he helped put in prison to begin with,” Jason Ortiz, of the nonprofit Last Prisoner Project said.

The Last Prisoner Project and other advocacy organizations have joined lawmakers in calling for President Joe Biden to pardon many more of those sentenced on federal drug-related crimes, after he pardoned his son, Hunter. The Biden Administration’s cannabis pardons have released virtually no federal prisoners. 

Trump’s DEA nominee withdraws 👀

Chad Chronister, Trump’s DEA nominee, withdrew his name from consideration on Tuesday. Chronister held surprisingly progressive views on cannabis reform — especially for a Republican DEA nominee. He’s the second of Trump’s pro-cannabis nominees to withdraw, after Matt Gaetz’ short-lived bid to lead the Justice Department. The New York Times reports that DEA officers circulated a video of Chronister’s son rapping about slashing someone in the face, a crime for which he received 22 months in prison. 

California cannabis sales slide 

California sold less cannabis in the third quarter of 2024 than any previous quarter since 2020, SF Gate’s Lester Blackwrote on LinkedIn, based on California state data. The state is set to raise excise taxes next year, which would be another blow to ailing operators.

Canopy and Acreage deal will close on December 9

Canopy Growth and Acreage Holdings said their long-awaited deal will finally close on December 9. Worth over $3 billion when the deal was first announced in 2019, Acreage could end up going for zero if Canopy’s stock remains below $5. 

And more:

Canadian cannabis firm Rubicon Organics said it borrowed $10 million (CAD) in a senior secured credit facility from Community Savings Credit Union and another lender. The five year term loans have a 6.75% interest rate and will be used to pay down debt. Here’s the press release.

Utah study shows medical cannabis reduces opioids 🌿

Legalizing medical cannabis in Utah both reduced opioid use and drove down prescription overdose deaths statewide, reports Marijuana Moment.

This might’ve been why Jay-Z’s cannabis company, Monogram, is imploding. 

Cannabis Musings

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