Marijuana Banking Amendment Faces Big Hurdles for National Defense Act Inclusion

Chances of a marijuana banking amendment making it into the National Defense Authorization Act are still cloudy, despite a public push from several governors, federal lawmakers and financial organizations.

An amendment containing Colorado Representative Ed Perlmutter's SAFE Banking Act was successfully added to the NDAA in the United States House of Representatives, but the Senate has proved much tougher. The amendment would allow financial institutions to offer loans, lines of credit, checking accounts and other traditional financial services to state-legal marijuana businesses. The legislation has passed the House a handful of times as a standalone bill or as an amendment to other budget bills since 2019, but it has not yet come up in the Senate.

Because of marijuana's federal prohibition, the pot industry is technically banned from financial services, and any institutions that serve those businesses are at risk of federal drug charges. Although some smaller banks and credit unions will take on that risk for high fees, the majority of legal marijuana transactions are still done in cash.

Colorado senators Michael Bennet and John Hickenlooper sent a letter to Senate leadership last week pushing to include the marijuana banking amendment in the NDAA. So did Governor Jared Polis and 23 other United States governors, as well as fourteen national trade organizations, including the American Bankers Association, National Association of Realtors, Credit Union National Association and the National Association of Professional Insurance Agents — and it's not the first time Senate leadership has received these kinds of public letters pushing for marijuana banking.

So what's the holdup?

The NDAA was stalled by Florida Senator Marco Rubio on December 2, who's pushing for more restrictions on China over the country's treatment of the Uyghur ethnic group, but the Safe Banking Act wasn't part of the bipartisan package of 25 NDAA amendments agreed upon December 1. There's still hope in Perlmutter's office that SAFE will be added some time next week, but a December 2 report from The Intercept paints a dimmer picture.

According to the report, the SAFE Banking Act wasn't on the radar of key Democratic senators as they negotiate the Senate's version of the NDAA and prepare to confer with the House. Senate Armed Services Committee Chair Jack Reed, Senate Banking Committee Chair Sherrod Brown and Senate Armed Services Committee senior member Jeanne Shaheen all told the news organization that marijuana banking hadn't come up as of earlier this week, while Democratic Chief Deputy Whip Brian Schatz, a co-sponsor of the SAFE Banking Act in the Senate, said it wasn't even on his mind.

Senate Majority Leader Chuck Schumer and senators Cory Booker and Ron Wyden have been pushing forms of more aggressive pot legislation with social equity provisions, and have suggested that if marijuana banking were approved, it could compromise the national legalization effort by putting one foot in with commerce but keeping the other foot out with social justice. The trio has pushed back against adding the SAFE Banking Act with budget bills in the past and is prepared to "stay this course," Wyden told reporters on Monday.

Perlmutter and his fellow SAFE Banking sponsors in Congress have argued that allowing the marijuana industry to access banking provisions would enable more minority entrepreneurs to start businesses.

"The SAFE Banking Act would immediately remove barriers for small and minority-owned cannabis businesses to access capital. #SAFEBanking is the first of many federal reforms that are needed to ensure these businesses are treated fairly and legitimately," Perlmutter tweeted on November 30.

Representative Dave Joyce has also expressed support for marijuana banking, tweeting that he would "fight for it in conference" if the Safe Banking Act isn't included in the Senate's NDAA.

Republican Senator Rand Paul, a co-sponsor of the SAFE Banking Act, told The Intercept that Congress might miss a chance at allowing marijuana banking If Democrats don't agree on the issue and Republicans end up with majorities in Congress after the mid-term elections.

“They’ve got to get it done. If the Republicans get back in charge, which I think we will, the bills are never going to happen, because our leadership doesn’t like them,” Paul said.