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Marijuana Industry Faces Blow After McConnell Kills SAFE Banking Bill

Marijuana advocates and executives are up in arms after opposition from Senate GOP Leader Mitch McConnell resulted in Congress failing to pass a key cannabis banking bill, reports The Hill. The $1.7 trillion omnibus spending bill unveiled Tuesday includes all kinds of expenditures, but it not the SAFE Banking Act, a bipartisan measure that would undo federal restrictions making it difficult for legal cannabis businesses to access financial services. The measure had much support, as it passed the House seven times, receiving 321 votes last year, and enough GOP support to reach 60 votes in the Senate. It did not have the support of McConnell, whose opposition kept it out of the spending bill. McConnell first blocked the SAFE Banking Act’s inclusion in a defense bill this month, arguing that it would make the U.S. financial system “more sympathetic to illegal drugs.” Cannabis businesses have suffered from a wave of robberies because federal law forces many of them to operate in cash. Due to the threat of federal penalties for banks that work with cannabis firms, dispensaries often struggle to access loans and are subject to huge interest rates if they do manage to secure funding. Untold numbers of smaller cannabis companies that were waiting for SAFE Banking and don’t have easy access to capital may soon go out of business. Some of those companies will enter the illegal market, which allows them to dodge heavy taxes stemming from federal rules that restrict cannabis businesses from taking common deductions.


“What the Senate did by not voting for SAFE Banking is encourage the illicit market to thrive,” said Boris Jordan of Massachusetts-based firm Curaleaf. “The illicit market doesn’t do testing, doesn’t pay taxes, and at the moment is not being enforced against, so they’re thriving, whereas the companies that are actually operating under the rules are the ones that are suffering.” Advocates were certain that the SAFE Banking Act would cross the finish line before Democrats ceded control of the House next Congress, particularly after President Biden embraced marijuana reforms for the first time in October. The bill was to be included in last year's defense package, but Senate Majority Charles Schumer pulled it. Schumer eventually pushed for the bill after it was combined with the HOPE Act, a bipartisan measure that would incentivize states to speed up low-level marijuana expungements, but this time, it was McConnell who refused to include the measure.

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