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Lawmakers exclude cannabis language from defense authorization text

Defense policy vehicle again eludes cannabis banking advocates

Senate Banking Chairman Sherrod Brown said any defense policy bill that includes provisions allowing banks to work with cannabis businesses will also have to address the disproportionate harm the war on drugs does to some communities.
Senate Banking Chairman Sherrod Brown said any defense policy bill that includes provisions allowing banks to work with cannabis businesses will also have to address the disproportionate harm the war on drugs does to some communities. (Tom Williams/CQ Roll Call file photo)

The fiscal 2023 defense reauthorization bill text released Tuesday excluded cannabis banking provisions after lawmakers were unable to reach a compromise that would satisfy progressive Democrats or overcome objections from prominent Republicans. 

Democrats earlier in the day cast blame on Republicans for standing in the way of provisions that would allow the cannabis industry to access banking services. But a group of Senate Democrats Tuesday afternoon was still pushing to attach stipulations that would support those harmed by federal drug laws to any language that would open banking services up to the industry. 

“I think McConnell’s been pretty much an obstacle on getting it in,” Rep. Ed Perlmutter, D-Colo., said in an interview, referring to Senate Minority Leader Mitch McConnell, R-Ky. Perlmutter, a long-time supporter of banking access for cannabis companies, introduced the banking bill under consideration for inclusion in the defense reauthorization legislation. 

Perlmutter’s bill and its Senate counterpart, introduced by Sen. Jeff Merkley, D-Ore., had some, but not universal support among Republicans. 

McConnell criticized Democrats for trying to include cannabis banking provisions in the bill, saying they were gumming up negotiations with items not related to defense. Lawmakers released a draft text of the bill late Tuesday.

“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,” McConnell 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.

Senate Armed Services ranking member James M. Inhofe, R-Okla., sponsor of the Senate version of the defense reauthorization, said he would do everything he could to block 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. 

In addition to opposition from key Republicans, cannabis banking provisions have also found resistance in the past among some Democrats, who 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. 

Sens. Cory Booker, D-N.J., and Senate Banking Chair Sherrod Brown, D-Ohio, earlier in the day were negotiating for the inclusion of stipulations that would support people harmed by drug policy in addition to banking access for the industry. They declined to discuss the specific proposals, but Brown said negotiations were coming down to those extra provisions, casting blame on Republicans for the hold-up. 

“They just want to take care of the banks, and that’s all they want,” Brown 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.”

Cannabis banking provisions have easily been approved by the House seven times, most recently as an amendment to the fiscal 2023 defense reauthorization. The provisions, however, have historically stumbled in the Senate.

Sen. Elizabeth Warren, D-Mass., a co-sponsor of the Merkley 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.  The current continuing resolution expires Dec. 16. 

Job training was included in a bill introduced by Booker and co-sponsored by Majority Leader Charles E. Schumer, D-N.Y., that could hold clues about other cannabis-related provisions potentially on the table in other legislation. 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 at one point under consideration for inclusion in the defense policy bill was a bipartisan bill introduced by Rep. David Joyce, R-Ohio, that would provide federal grants to states to defray the administrative costs of expunging cannabis offenses from criminal records, Perlmutter said.

Lindsey McPherson, David Lerman and Ellyn Ferguson contributed to this report.   

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