Key bipartisan lawmakers say they are confident Congress will move on legislation designed to free cannabis businesses from the risk of breaking federal laws.
“I actually have some pretty good confidence that we can move forward on a solution this year,” Sen. Cory Gardner (R-CO) told Yahoo Finance about the Strengthening the Tenth Amendment Through Entrusting States Act (“STATES Act”), a bill he co-sponsored with Democratic Senator Elizabeth Warren (D-MA), and one of several bills introduced in Congress to address concerns that plant-touching transactions could run afoul of the Controlled Substances Act and U.S. banking regulations.
If passed, the STATES Act would prevent federal authorities from punishing state-compliant cannabis businesses that would otherwise face criminal prosecution for possessing and distributing marijuana, which remains designated as a schedule 1 narcotic.
“I think the consistent drumbeat of businesses and organizations and individuals going in to share their story with Chairman [Lindsey] Graham, and others, has really made a key difference in terms of how we’re going to actually pass legislation to fix this conflict,” Gardner said.
‘An invitation to money laundering’
A lead Republican sponsor for another bipartisan, and more narrowly-tailored bill that would protect banks from cannabis-related penalties, the Secure and Fair Enforcement Banking Act (“SAFE Act”), Gardner reintroduced the measure in the Senate in April with Democratic co-sponsor Sen. Jeff Merkley (D-OR).
“This broader bill, I support it,” Merkley told Yahoo Finance. “Sen. Cory Gardner from Colorado has done a good job leading that effort. But sometimes the broader the bill gets, the less support it has. So we’re trying to find both the policy path and the political path forward.”
Persuading lawmakers to vote yes on policy that would undue decades of drug regulation takes time, Merkley said. It’s why he believes the SAFE Act may be getting more traction.
“It’s caught in the evolution of thinking about cannabis,” Merkley said. “We now have more than half of our states ... that really understand that this cash economy makes no sense. It means that you have hundreds of thousands of dollars, millions of dollars moving around in duffel bags, in backpacks. It’s an invitation to money laundering, to organized crime to petty theft, to not even paying your taxes accurately.”
Merkley said the Senate version of the SAFE Act had gained 31 sponsors, and was gradually building steam. Its companion bill in the House passed out of committee in March. “We’re expecting positive action on the floor,” Merkley said.
Questions remain about whether hemp, a form of cannabis with non-psychoactive levels of THC, needs to be explicitly covered in the various bills, despite its legalization under the 2018 Farm Bill. Hemp contains another phytocannabinoid, CBD, suspected to have therapeutic benefits.
“We’re pushing the FDA to act quickly because that’s really the hang-up now,” Merkley said. “Some states are a little nervous — what is this CBD oil? And does have something to do with marijuana? And can we intercept it? And the answer is no. This is now a full, agricultural product but it needs to have the FDA put out regulations that pertain to labeling and shipping, just to give everyone, to get the message, if you will, that this is now a legal, agricultural commodity.”
Representatives Ed Perlmutter (D-CO), Denny Heck (D-WA), Steve Stivers (R-OH) and Warren Davidson (R-OH) introduced the House version of the SAFE Act. On Wednesday, the House Financial Services Committee issued a report on the legislation. The bill was discharged by the House Judiciary Committee, and placed on the Union Calendar, indicating it may come to a floor vote sooner than expected.
Alexis Keenan is a New York-based reporter for Yahoo Finance. She previously produced and reported for CNN and is a former litigation attorney. Follow on Twitter @alexiskweed.