With just over a week to go in the final legislative session of the year (at the time of this writing) it doesn’t look as though the Senate is going to take up the SAFE Act before going home for the 2022 Christmas recess. That means shelving it until 2023, when the GOP takes control of the House.
GOP House control does not necessarily signal a death knell for the SAFE Act. According to Senate Banking Committee Chairman Sherrod Brown (D-OH), House Republicans are signaling interest in passing a new version of the legislation in 2023. Brown believes they can get the bill through both chambers and signed into law sometime in 2023.
Stalled in the Senate
The Democrat-controlled House had no trouble passing the SAFE Act in 2022. In fact, they have passed some version of the legislation every year for the last several years. Unfortunately, the legislation always seems to stall in the Senate. It did so again in 2022.
At issue are objections among some of the more conservative members of the Senate. Their more liberal counterparts have been unable or unwilling to work with them to get the bill through, so proponents cannot ever get past a Senate filibuster.
What does that mean for 2023? Democrats have full control of the Senate now, but the majority is still not filibuster proof. They would have to make concessions or attach the SAFE Act as an amendment to an appropriations bill.
Why It’s So Critical
Passage of the SAFE Act is critical to a marijuana industry that still struggles to access basic banking services. Though a small number of financial services companies have stepped up in recent years to fill in the gaps, there aren’t nearly enough of them willing to risk federal prosecution to serve marijuana businesses.
It is a profound and unnecessary problem in every state with legal marijuana. But it’s a bigger problem in more conservative states like Utah. Medical cannabis is allowed in Utah; recreational cannabis is not. Retail operators like Utah dispensary Beehive Farmacy need to follow a strict set of rules to keep regulators happy.
As things currently stand, Beehive Farmacy and its competitors do business almost exclusively on a cash-and-carry basis. Not only do their customers pay with cash, but they are also forced to do the same. They have trouble paying their bills any other way because they do not have access to basic banking services.
The SAFE Act Removes a Threat
Passage of the SAFE Act would remove a major threat that currently prevents financial institutions from getting involved in the cannabis industry. That threat is the threat of federal prosecution.
Even if the federal government decided not to prosecute financial institutions, they could compel such institutions to take measures that would aid federal investigations and prosecutions. That is a great way for a bank to alienate its customers.
The strange thing about all of this is that Washington has willfully turned a blind eye to state-legal cannabis for years. Almost no prosecutions against medical cannabis providers have been pursued. As for prosecutions of recreational providers, they had been dwindling since the first states legalized recreational consumption.
Just Get It Over With
If the federal government is content to turn a blind eye to state-legal cannabis, why not just get it over with and make the SAFE Act federal law? Why keep trying to play both sides of the ball?
It looks like the SAFE Act isn’t going to make it through the Senate in what remains of 2022. By all accounts, it’s on the shelf until 2023 and the 118th Congress.
