When it comes to Congress and cannabis reform, the question is how big (or how small) to go

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Jawaun McFly weighs out product at the counter of the Rollup Dispensary on Washington Street in Denver on Friday, April 9, 2021. The retailer sells lotions, creams, and transdermal patches in CBD, CBN, THC form, as well as edibles, concentrates and flowers, and manufactures shatter, wax and Co2 hash. 

Updated April 15, 2022 at 7:30 a.m.

Colorado Democratic Congressman Ed Perlmutter has been on a mission — some might describe him as relentless — trying to get Congress to pass his SAFE Banking Act.

The bill, which would give legal cannabis businesses access to financial services, has gotten through the House several times in the last few years, both as a standalone bill and as an amendment to other bills like the National Defense Authorization Act. But each time, Perlmutter has had to watch as the Senate left the idea by the wayside.

The shift in control from Republicans to Democrats two years ago has not helped. Perlmutter summed up the partisan positions on his bill for Treasury Secretary Janet Yellen last week: “Basically, from the Republicans’ point of view: too big, too broad. Now Sen. (Sherwood) Brown is the chair of the (Banking) committee: too limited, too narrow.”

Outside of Congress, supporters of the SAFE Banking Act are increasingly disappointed with the lack of progress in the Senate. 

“It’s created a very unsafe environment with the amount of cash that is still, you know, being transacted without access to normal banking operations,” explained Chuck Smith, head of the industry association Colorado Leads. 

SAFE Banking is up against an age-old problem in Congress, one that crops up around thorny issues. Do lawmakers try to pass a small, targeted bill that solves a specific concern, which Perlmutters’ bill does, or do they go big and try to tackle the whole issue?

Senate Democrats, including Cory Booker and Chuck Schumer, are trying to go big.

“This cannot just be about simple legalization. It has to be about restorative justice,” said New Jersey Sen. Cory Booker.

Last summer, Booker joined Senate Democratic Leader Chuck Schumer and Oregon Sen. Ron Wyden in pledging to introduce a measure to end the federal prohibition on cannabis, while also addressing the social and criminal justice issues that the war on marijuana has left in its wake.

Booker noted that overwhelmingly those punished for marijuana offenses are low-income Black and brown people. And while he agrees that giving existing cannabis companies access to banking services is important, he’s not willing to move forward on that issue alone.  

“[The] reality is that there are a lot of very big money interests that want that done,” he said. “And if we get that done, we lose an invaluable sweetener to get the restorative justice, the expungement of records, the kind of things done that there isn't as much money behind.”

Booker and his group had hoped to unveil their legalization legislation later this month, possibly on April 20, but that deadline has been pushed back to sometime before the August recess.

But not everyone in the industry agrees that going big is the right approach.

But Smith and some other industry advocates worry that by going so big, the bill might be doomed to fail.

“The perfect is the enemy of the good, right now,” he said.

It comes down to simple Senate math: to get the bill passed, supporters of legalization will need 60 votes.

“We struggle to get the most mundane thing done in Congress,” said Amber Littlejohn, executive director of the Minority Cannabis Business Association. “So equitably legalizing cannabis is not going to be something we get done this Congress.”

Like other advocates, Littlejohn wants the federal prohibition to end, and admires the goal Booker and lawmakers are trying to accomplish in dealing with a problem decades in the making. She agrees criminal records for non-violent marijuana offenses should be expunged. But she thinks the groundwork for equity could start with SAFE banking. She said some of the businesses she represents won’t last until legalization unless they get some help now.

Her organization has direct experience with these troubles. It lost its bank last year and had to wait several months for its new bank to complete the federal due diligence. The Association is also fighting an IRS fine because its lack of access to electronic payments meant it couldn’t pay its taxes online.

The House passed a comprehensive legalization bill last week, called the MORE Act. But it only got three Republican votes, essentially condemning the bill to the Senate’s legislative graveyard.

GOP Rep. Dave Joyce of Ohio, who has been working with Perlmutter and others on cannabis issues for years, sees hurdles for any wide-ranging legalization bill; warning that it gives lawmakers a reason to avoid taking a potentially risky vote.

“They say, ‘You know, I like this part, but I don’t like that part.’ So they’re probably not going to vote for it,” he explained.

When it comes to legitimizing cannabis, Joyce thinks going smaller might be better: “try to bring a coalition around those manageable pieces to see which ones have the energy to get over the top.”

What reform gets left behind?

But his House GOP colleague, Rep. Nancy Mace of South Carolina, warns that a piecemeal approach will always leave the hardest pieces behind.

“My fear is … we’ll pass SAFE banking and then won’t revisit it for 20 years, right? ‘Cause people will feel like they checked that box, they’re done now. But you can’t just stop there,” she said.

Mace has introduced her own legalization bill in the House called the States Reform Act. It’s a more limited approach than what the chamber’s Democrats just passed; it would treat cannabis like alcohol and contains limited criminal justice reform elements. The bill is expected to get a committee hearing in a few months. She’s hopeful it will be the tool to open the door to real bipartisan discussion and consensus-building on marijuana reform.

“Beggars can’t be choosers in this space. We’ve got to pull our head out of the sand and do what’s right,” she said.

Mace and others in this debate agree on one thing — that the federal status quo is increasingly unsustainable as more states legalize cannabis in one form or another.

But whether Congress’s next step on cannabis will be big or small remains to be seen. And advocates said the one scenario they’d like to avoid this Congress is having both the big and the small options fail.

Editors Note: This story has been updated to reflect the new timeline for the Senate Democrats’ bill.