The U.S. House of Representatives voted on Thursday, September 23 to approve the National Defense Authorization Act (NDAA) of 2022, by a vote of 316-113. But this time there was a rather unusual amendment attached to the typically-military-centric budget-bill: an amendment that would shield banks from federal prosecution (or retribution) if they worked with state-legal cannabis businesses.
One day ahead of that vote, Colorado Representative Ed Perlmutter (D-CO) took to the House podium to present Amendment No. 1, which was a verbatim reprint of his Secure and Fair Enforcement (SAFE) Banking Act.
“I offer this amendment that is identical to the SAFE Banking Act, the House passed by a vote of 321 to 101 in April,” Perlmuter said. “By bringing cash into the financial system banks and credit unions, we will subject the funds and the account holders to rigorous anti-money laundering [requirements].”
This is the first time that cannabis reform has been attached to a defense spending bill. And for many, it’s raising the question: When did cannabis banking become an issue of national security?
The answer lies within the premise of Perlmutterr’s SAFE Banking Act, which, from its inception, has aimed to reduce the amount of cash held by cannabis companies and increase safety by making the full range of financial services offered by banks available to them.
First introduced in the House in 2019, the SAFE Banking Act has been voted on as a standalone bill by congress twice before, and attached to other bills twice—making this NDAA vote the Act’s fifth official House vote on this legislation. However, while revisions of it have been passed by congress three times, the SAFE Banking Act has yet to make it past the Senate.
Should it pass (either as a standalone bill or riding on the NDAA) the Safe Banking Act would make it possible for banks to accept funds from cannabis businesses in legal states. It would also make it possible for cannabis businesses to access regular banking services like loans and credit—neither of which are currently available to state-legal cannabis businesses.
“This will strengthen the security of our financial system in our country by keeping bad actors like foreign cartels out of the cannabis industry,” Representative Perlmutter said as he stood before the House on the Wednesday prior to the vote. “But most importantly, this amendment will reduce the risk of violent crime in our communities. By dealing in all cash, these businesses and their employees become targets for robberies, assaults, burglaries and more.”
By framing the issue through the lens of drug cartels on American streets and local businesses being subject to violent crimes, Perlmutter argued that cannabis banking legislation is immediately necessary. And passing it on the back of the NDAA was the fastest way to achieve that.
He told Marijuana Moment: “The fact that it deals with cartels and national security, on top of the need for the public safety piece of this thing, I think that we’ll be able to convince the conference committee and the conferees generally to keep it in [the NDAA].”
However, not all in congress think Perlmutter’s tactic is the correct one. Some, like Representative Mike Rogers (R-AL), support the SAFE Banking Act as a standalone bill, but question the method of tying it to the NDAA.
“I think what [Perlmutter is] trying to accomplish is admirable and should be accomplished,” Rogers said. “But not in the National Defense Authorization Act.”
Others, like Senator Cory Booker (D-NJ), have said they’ll do whatever they can to block a banking bill like the SAFE Banking Act. Shortly after Booker and Senate Majority Leader Chuck Schumer (D-NY) introduced their own draft bill for cannabis legalization in July, Booker made his stance on cannabis banking bills very clear.
“To just do [banking reform] so some people can get rich and not do something about the people who are languishing with criminal convictions” is unacceptable, he said at a press conference. “I will lay myself down to do everything I can to stop an easy banking bill that’s going to allow all these corporations to make a lot more money off of this, as opposed to focusing on the restorative justice aspect.”
So, while the NDAA has passed the House with the SAFE Banking Act attached, it may still face opposition when it arrives in the Senate. It may have bipartisan support as a standalone bill, but attached to the NDAA it’s unclear whether it will have the necessary support to pass—even in a Democratic-controlled Senate.
Perlmutter remains hopeful, though. He sees this NDAA as the shuttle that could carry much-needed cannabis banking reform through the Senate and onto the president’s desk.
“I think the fifth time’s the charm,” Perlmutter said. “Obviously, we still have to do some work to make sure that it remains part of the NDAA as the House and the Senate go to conference. But I think that it will.”
