Issue: Today, in remarks before the Independent Community Bankers of
America (ICBA), Senate Banking Committee Chairman Mike Crapo (R-ID)
argued that the Department of Justice (DoJ) should act to resolve legal
uncertainty regarding cannabis and cannabis-related businesses before the
Senate Banking Committee takes up legislation to provide financial services
firms with greater legal certainty in providing services to those businesses. This
mirrors House Financial Services Committee Ranking Member Patrick
McHenry’s position that the legal status of cannabis must be resolved before
dealing with tertiary issues such as financial services.
Impact: The issue has been a priority of neither Crapo nor Senate Banking
Committee Ranking Member Sherrod Brown (D-OH), although the House
Financial Services Committee moved legislation earlier this year to confer
Federal protections on banks and insurers providing services to those business
in those states in which cannabis is legal. The bill is expected on the House
Floor in the next month. While Crapo indicated that moving legislation is
premature at the current moment, he nevertheless suggested that the Banking
Committee could hold hearings to examine the issue and stated “We need to
get the issue resolved,” referring to the conflict that advancing financial services
legislation would pose with regards to the Federal criminal code.
Next Steps: Changing the Federal criminal code requires action by Congress.
However, the DoJ can issue its own interpretations in regard to conflicting
statutory provisions and can exercise its own prosecutorial discretion.
Earlier this month, Attorney General William Barr stated that he would not
oppose legislation to allow states greater autonomy to set their own cannabis
policy. Senators Elizabeth Warren (D-MA) and Cory Gardner (R-CO) are
leading a bill to accomplish just that. The Strengthening the Tenth Amendment
Through Entrusting States (STATES) Act would exempt any cannabis activity
that is in accordance with state laws from The Controlled Substances Act. It is
unclear whether Majority Leader Mitch McConnell (R-KY) would allow a vote on
the legislation to come before the full Senate.
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