Cannabis Banking, Criminal Justice Reformers Push Changes in Lame-Duck Congress

It’s been a banner year for supporters of cannabis reform, with multiple states approving recreational marijuana sales in the November elections. But now that elections are over, and the current Congress is in its lame-duck session, advocates are pushing federal lawmakers to pass several bills related to banking and criminal justice reform.

According to Politico, part of the issue for cannabis advocates is how the fates of these bills are intertwined. Progressive Democrats have so far been reluctant to expand access to the banking system without changes to punishments for past drug offenders, particularly those in jail for marijuana possession. On the other side, some Republicans want the banking bills passed but have not shown as much support for criminal justice reform. Any cannabis reform bill will need support from Republican leadership in the House and Senate to pass.

Nevertheless, supporters of these bills are confident a cannabis reform package will pass the House and Senate before the current Congressional term ends. Sen. Steve Daines (R-MT) told Politico that Republicans are open to passing the Harnessing Opportunities by Pursuing Expungement (HOPE) Act. The HOPE Act, introduced by Rep. Dave Joyce (R-OH) and Rep. Alexandria Ocasio-Cortez (D-NY), would create federal grants to help states fund expungement programs for drug offenders. Cannabis reform supporters hope that combining the HOPE Act with banking reform measures will create enough common ground between Democrats and Republicans for both bills to pass.

Protecting Minority-Owned Businesses Critical for Cannabis Banking Reformers

One sticking point for many Democrats, especially those with more progressive leanings, is expanding access to banking for minority-owned cannabis businesses. Marijuana Moment reports that cannabis advocates want to make sure the Safe and Fair Enforcement (SAFE) Banking Act includes funding for Minority Deposit Institutions (MDIs) and Community Development Financial Institutions (CDFIs). MDIs and CDFIs often give commercial loans to minority-owned businesses.

The issue of protecting banking access for minority-owned businesses is a particular area of concern for the Drug Policy Alliance (DPA), an advocacy group with close ties to many progressive Democrats. Maritza Perez, the director of the DPA’s office of federal affairs, said she and her group are watching closely to see if the SAFE Act includes protections for minority-owned businesses.

“For too long, communities of color have been locked up for marijuana while being shut out of the regulated market,” Perez said. “Congress has an opportunity to change that with this package.”

Sen. Sherrod Brown (D-OH) has said he wants to see changes in the SAFE Act. Brown, the chairman of the Senate Banking Committee, is a key player in the negotiations over the marijuana reform bills. His support is essential if any of these bills are going to pass.

“What passed the House is very inadequate,” Brown told Politico. “My main focus is to protect the workers in this industry.”

That said, Brown also said he believes some marijuana reform package will pass before the lame-duck session ends.

“We’re serious. We want to do this,” Brown said. “I’m actually fairly optimistic and hopeful that we will come to an agreement.”

Hurdles Remain to Passing Reform Measures

While members of both the House and Senate support these cannabis reform measures, key holdouts remain. According to Politico, Senate Democrats want approval from Pennsylvania Sen. Pat Toomey and Iowa Sen. Chuck Grassley before taking action on the SAFE Act and HOPE Act. Toomey and Grassley are the ranking Republicans on the Senate Banking and Judiciary committees, respectively, making their support crucial to moving these bills forward.

Another obstacle to passing these reform measures is the rush to get everything done before Republicans take over the House of Representatives in 2023. In particular, supporters worry that House Republicans may block the HOPE Act.

“It’s not impossible to get HOPE passed in a Republican-led House, but doing so creates significant hurdles,” one senior House staffer told Politico anonymously. “Playing a waiting game could derail progress for years to come.”

Unfortunately, last-minute changes to the SAFE Act and HOPE Act may cause some Republicans to withdraw their support from the bills. Rep. Dave Joyce, who introduced the HOPE Act in the House with Rep. Alexandria Ocasio-Cortez, told Politico that changing the act’s provisions could derail its passage.

“When people add things to SAFE [such as] different financial decisions or market decisions, I think that will bog it down,” Joyce said. “The way it exists now, there seems to be consensus on its ability to move.”

Reform Measures Follow Moves from Biden, Governors

Even if the SAFE Act and Hope ACT do not become law, 2022 has already been a remarkable year for marijuana reform. In October, President Joe Biden announced mass pardons for many drug offenders convicted of federal marijuana possession. That same month, the Congressional Research Service released a report outlining several paths for Congress or the Biden Administration to change marijuana’s status under the Controlled Substance Act.

Following Biden’s lead, some states have implemented their own criminal justice reform measures. In Oregon, Gov. Kate Brown pardoned about 45,000 people convicted of simple marijuana possession. Brown announced the pardons about a month after Biden issued his pardons.

“No one deserves to be forever saddled with the impacts of a conviction for simple possession of marijuana — a crime that is no longer on the books in Oregon,” Brown said.

Brown and Biden’s actions follow earlier moves by other officials to help marijuana offenders. In December 2021, Colorado Gov. Jared Polis pardoned more than 1,300 people convicted of marijuana possession.

“It’s unfair that 1,351 additional Coloradans had permanent blemishes on their record that interfered with employment, credit, and gun ownership, but today we have fixed that by pardoning their possession of small amounts of marijuana that occurred during the failed prohibition era,” Polis said in a statement when he announced the pardons.

With any luck, Congress will pass the SAFE Act and Hope Act to continue the nationwide push for cannabis reform. But even if Congress does not act, the political momentum seems to be on the side of reformers.

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