Negotiations over provisions that would allow cannabis companies to access banking services were among the sticking points holding up the release of the fiscal 2023 defense reauthorization bill text Tuesday, senators said.
A group of Senate Democrats wants to include provisions that would support those harmed by federal drug laws to any language that would open banking services up to the cannabis industry. Meanwhile, prominent Republicans, including Senate Minority Leader Mitch McConnell, criticized Democrats for trying to include the banking provisions in the defense bill at all.
Sens. Cory Booker, D-N.J., and Sherrod Brown, D-Ohio, declined to discuss the specific stipulations they want attached to provisions that would allow bank access for cannabis companies to win their support, citing ongoing negotiations. However, Brown said negotiations were coming down to those extra provisions.
“That’s the negotiations,” Brown said of the additional provisions. “The Republicans and the banks are just trying to steamroll and steamrolling ain’t happening.”
The House, which passed its version of the defense authorization bill in July, is working on a new version intended to reflect the priorities of both chambers as time grows short to clear the must-pass bill by the end of the year.
Cannabis banking provisions have easily been approved by the House seven times, most recently as an amendment to the fiscal 2023 defense reauthorization.
However, the provisions have historically stumbled in the Senate because Brown, Booker and others want to wrap banking access into a bigger cannabis overhaul package that would address the disproportionate harm marijuana policy inflicts on Black and Latino communities.
“They just want to take care of the banks, and that’s all they want,” Brown, who is chairman of the Senate Banking Committee, said of Republicans. “I don’t know how much we can get them to accept, but if they want to take care of the banks, just like if they want all their tax breaks for corporate interests, they’re going to have to take the child tax credit with it. It’s a negotiation.”
Sen. Bob Menendez, D-N.J., a member of Senate Banking, said in an interview that cannabis banking was “in the mix” of NDAA negotiations, but “not there yet.” Menendez is the co-sponsor of a bill introduced by Sen. Jeff Merkley, D-Ore., that would open banking services to cannabis companies. Retiring Rep. Ed Perlmutter, D-Colo., introduced the House version.
Sen. Elizabeth Warren, D-Mass., another co-sponsor of the bill, said the provisions are also under consideration for inclusion in an appropriations omnibus bill still being negotiated. One of the provisions under consideration is training for people convicted of nonviolent, drug-related crimes, she said in an interview.
Job training was included in a bill introduced by Booker and co-sponsored by Majority Leader Charles E. Schumer that could hold clues about other cannabis-related provisions potentially on the table. The Booker legislation would include a grant program to provide job training, legal aid, reentry services and literacy programs for people hurt by the war on drugs, as well as loans for small cannabis businesses owned by people from marginalized communities.
Another measure under consideration for inclusion in the defense policy bill is a bipartisan bill introduced by Rep. David Joyce, R-Ohio, and Rep. Alexandria Ocasio-Cortez, D-N.Y., that would provide federal grants to states to defray the administrative costs of expunging cannabis offenses from criminal records, Perlmutter said in an interview.
Republicans have criticized the potential inclusion of cannabis provisions, accusing Democrats of trying to jam unrelated measures into the defense bill. Cannabis industry access to banking services has some, but not universal support among Republicans. Merkley’s stand-alone cannabis banking bill co-sponsored by Menendez and Warren has nine Republican co-sponsors in the Senate.
Senate Armed Services ranking member James M. Inhofe, R-Okla., sponsor of the Senate version of the defense reauthorization, said he’s doing everything he can to prevent cannabis banking from ending up in the bill.
“If that’s in there, I am going to vote against my own bill,” he said in an interview. Inhofe said he’s not sure whether other members of his party would follow suit, since cannabis provisions would be just one part of a much bigger package.
“It’s not going to be just a one-shot deal,” Inhofe said. “I think it’s going to have permitting and a whole lot of different things. That’s normally what happens.”
McConnell earlier in the day cited cannabis banking provisions in his criticism of Democrats, saying they were gumming up negotiations with items not related to defense.
“We’re talking about a grab bag of miscellaneous pet priorities, like making our financial system more sympathetic to illegal drugs, or permitting reform in name only that’s already failed to pass the Senate earlier this year,” he said in a floor speech. “If Democrats wanted these controversial items so badly, they had two years to move them across the floor.”
Cannabis is illegal under federal law but has various levels of legality in the states, including being fully legal in almost 20 states. It is fully illegal in only a few states.
