Cannabis Banking Bill May Pass This Congress
President Donald J. Trump called for bipartisanship in this new Congress and he has voiced support last year for a bill championed by Sen. Cory Gardner (R-CO) to allow states to pass laws with regard to adult use and medical cannabis. When looking for issues where Republicans and Democrats can agree, there are only a limited number of issues where there is common ground. One issue is cannabis with the president and Democrats in Congress voicing support for federalism in cannabis laws and allowing banking for those businesses.
The president has been clear that this year, he is going to repeat the playbook he used to pass criminal justice reform with other issues where there is common ground. President Trump declared in his 2019 State of the Union Speech “The agenda I will lay out this evening is not a Republican agenda or Democrat agenda, it is the agenda of the American people.” One issue is infrastructure spending, because we all know that Republicans and Democrats share a love of spending the taxpayer money on roads and bridges that gets put in their state or congressional district. Another may be in cannabis laws.
The president’s theme this year was for Democrats to retreat from investigations and to get to work on legislating. The president said, “together we can break decades of political stalemate. We can bridge all divisions, heal old wounds, build new coalitions, forge new solutions, and unlock the extraordinary promise of America's future. The decision is ours to make. We must choose between greatness or gridlock, results or resistance, vision or vengeance, incredible progress or pointless destruction. Tonight, I ask you to choose greatness.” It is unlikely that the Democrats retreat from investigations, but both parties have an interest in avoiding legislative gridlock.
The House Financial Services Consumer Protection and Financial Institutions Subcommittee is convening a hearing next week titled “Challenges and Solutions: Access to Banking Services for Cannabis-Related Businesses.” Republicans on that committee can show that they are willing to work with Democrats on ideas to help expand banking to a legal business and to expand the economies of states that are getting into the cannabis business. It is important to note that these banking services would be limited to legal businesses that are in states where the people have made the decision to allow cannabis. The laws of the different states range from adult use in Colorado to states like Maryland new to the medial cannabis legalization effort.
Republicans have campaigned for years on the idea of federalism. The people in the states should have the right to make their own laws when it comes to a power not delegated by the Constitution to the federal government. The police powers have traditionally resided with the state and local officials, and it is time for the federal government to change laws consistent with that federalist ideal. Where a state has allowed cannabis business to operate, banks should provide those legal businesses with banking services that are lacking today. A legal business forced into a cash only operation leads to inefficiency and sends legitimate businesses to be treated unfairly compared to other legal businesses in a state.
Secretary of the Treasury Steven Mnuchin has indicated some support for this idea. Forbes reported on February 2, 2018, “the Trump administration's top fiscal official appeared to voice support for letting marijuana businesses store their profits in banks. ‘I assure you that we don't want bags of cash,’ Treasury Secretary Steven Mnuchin testified on Tuesday during an appearance before the House Financial Services Committee. ‘We want to make sure that we can collect our necessary taxes and other things.’" Last year bipartisan bills were introduced in the Senate and House titled the “Secure and Fair Enforcement Banking Act (SAFE Banking Act) that garnered the support of conservative Republican Reps. Duncan Hunter (R-CA), Tom McClintock (R-CA), Matt Gaetz (R-FL), Sens. Rand Paul (R-KY), Cory Gardner (R-CO), and Dan Sullivan (R-AK). The strong bipartisan support from last year should translate into even stronger support for cannabis banking this year.
This hearing is a first step, but expect cannabis legislation touching on federalism, medical use, veterans use, banking and descheduling the drug to be all issues that Congress is likely to take up this year. Right now, the federal government is operating under a funding rider pushed by former Rep. Dana Rohrabacher (R-CA) since 2014 that prevents the feds from prosecuting states that have allowed medical cannabis. Republicans should expand this fight and support the common-sense idea to allow the people of the many states to make their own decisions.
In the fall elections showed growing support. There were four states that considered differing degrees of legalizing the use of cannabis. The New York Times reported on November 7, 2018 that cannabis bills passed in Michigan, Utah and Missouri, while an initiative failed in North Dakota. That shows support and empowers states like North Dakota to reject if that is the will of the people.
Banking for cannabis should be low hanging fruit for bipartisanship and an easy issue for President Trump and House Democrats to agree upon.
Steve Sherman is an author, popular radio commentator, and former Iowa House candidate.