Reforming Capitol Hill

As 2023 began, cannabis advocates on Capitol Hill and the industry at large were steeped in frustration and disappointment. In December, despite broad bipartisan support, Senate Republicans abruptly stripped the Secure and Fair Enforcement (SAFE) Act from must-pass spending legislation, crushing the industry’s expectation that critical banking services at last were within reach. As lawmakers departed for the winter holiday, legal business owners—many of whom are forced to do business in cash—contemplated another year of spiraling operating costs and workplace vulnerability.

Nevertheless, hope for reform remains, though it is somewhat dimmer than it was at this time last year. When the predicted “red wave” failed to materialize during the 2022 midterm election, Democrat Chuck Schumer of New York, one of the industry’s primary advocates in Congress, maintained control of the Senate instead of passing the chamber back to Kentucky Republican Mitch McConnell. Currently serving as minority leader, McConnell dismissed the SAFE Act as “easier financing for illegal drugs.” His disdain for the plant is so strong that he prevented the issue from reaching the floor at all during his six-year tenure as majority leader.

In January, the House of Representatives returned to Republican control after four years with a Democrat majority. After fifteen grueling rounds of contentious voting (and one near-outbreak of physical violence), California Republican Kevin McCarthy emerged as Speaker of the House. McCarthy is no friend of cannabis, having consistently opposed reform of any kind since the early 2000s, when he served in the state assembly. He has opposed all proposed federal legislation save the most recent versions of the SAFE Act and the Medical Marijuana and Cannabidiol Research Expansion Act, the latter of which President Joe Biden signed into law in December. Unlike in the Senate, McCarthy’s ability to unilaterally block House legislation he doesn’t like is limited—partially because of the way the House works and partially because he’s unpopular with a small but aggressive bloc on his side of the aisle.

Like the Senate, the White House remains in Democrat hands and seems on board with reform. In October, Biden not only pardoned about 6,500 low-level federal cannabis offenders but also tasked the departments of Justice and Health and Human Services with studying decriminalization. The long-anticipated development ultimately could lead to rescheduling or descheduling, criminal justice reform and even, potentially, full legalization. Two months later Biden signed the research bill into law, marking the first standalone piece of pro-cannabis federal legislation ever to cross a president’s desk.

Medical credibility is a huge step forward, but access to basic financial services is by far the most urgent issue for the industry and the most broadly supported reform on Capitol Hill. There is little doubt among the more than three-quarters of House members who voted in favor of the SAFE Act on its sixth pass through the chamber that cannabis reform is good government and good politics. Given the industry’s growth rate and widespread voter approval, they’d be foolish to dismiss legislation that could help protect jobs and tax revenue.

But does that mean they’re ready to get serious about reform?

Power grab in the House

Despite the industry’s economic power and growing calls for reform from the polity, some conservatives remain convinced Reefer Madness was a documentary. Perhaps the most zealous among that contingent belong to the House Freedom Caucus, which emerged in early 2015 when the Republican party’s disgruntled right flank split off from the Republican Study Committee (RSC), frustrated by what they considered the RSC’s insufficiently conservative ideals and policy execution. The arch-conservative, invitation-only group of roughly forty legislators (out of 222 Republicans in the House) seeks tax and entitlement reform, repeal of the Affordable Care Act, and tougher immigration policies. In the words of founding member Jim Jordan (R-OH), the group is willing to “grind [government] to a halt” when members oppose legislation. Though in the minority even within their own party, the bloc has considerable power in a chamber with a very slim majority.

They exercised that power out of the gate this term by opposing McCarthy’s bid for Speaker of the House. Fifteen votes into a process that typically requires only one, the caucus extracted sweeping concessions including changes to the chamber’s rules and key committee chairmanships for hard-right ideologues in exchange for their support.

Most Freedom Caucus members have voted against cannabis legislation, but will they derail popular reform efforts? The tools to do so exist following McCarthy’s concessions, but it is too soon to know whether members will wield them. As things stand now, caucus members chair the House Homeland Security, Judiciary, and other committees, giving them the power to choose which issues will be heard and when—or whether—bills will receive a vote. Chairs often define their power broadly.

It’s worth noting the passionately free-market far right might not be as bad for cannabis as many expect. The industry’s greenhouses, distribution networks, manufacturing, marketing apparatuses, and retail outlets employ more than 400,000 full-time workers, and Republicans are proudly in favor of preserving and expanding American jobs. Plus, in 2021 the industry generated more than $10.4 billion in tax revenue for the legal states and the District of Columbia. That might look tempting to politicians who need to prop up funding for programs like Social Security and Medicare without cutting benefits, which is anathema to even the most conservative Republican voters. Supporters of legalization say cannabis should be taxed and regulated like alcohol, and a need for tax revenues generated by alcohol sales was one of the reasons Prohibition ended.

Everything in politics always circles back to money.

Wasted opportunities in the Senate?

A solid 90 percent of voters support some form of cannabis legalization, according to the Pew Research Center. Advocates say it is embarrassing that the federal and many state governments are so out of step with voters’ attitudes. One of the big reasons: age. Younger lawmakers are far more comfortable with cannabis than their older colleagues, and it shows in every vote.

Democrats in the House are counting on freshmen like Florida’s Maxwell Frost, “the Gen Z Congressman,” who is only twenty-five. (The average age in the chamber is fifty-eight.) Frost landed on the January/February 2023 Teen Vogue cover thanks to campaigning on issues important to young voters: gun violence, climate change, healthcare, criminal justice reform, and cannabis legalization.

Frost isn’t the only congressional newcomer to be outspoken about his position. Newly minted Senator John Fetterman (D-PA) made comprehensive legalization a centerpiece of his campaign, framing the issue in terms of morality, the economy, and a long-overdue correction to generations of bad policy. He’s no spring chicken at fifty-three, but he’s young for a senator. The average age in the chamber is sixty-four.

Fetterman may be the de facto tentpole of legalization, and not just because he stands six feet, eight inches tall. Tattooed and bullet-bald with a voice that can find colleagues and opponents alike clear across the Senate floor, he appears impervious to cold and survived a stroke just days before his primary victory. Fetterman insists he went to Washington to roll up the sleeves of his hoodie and get to work. The campaign’s best-selling T-shirt sums up his position in two sentences: “It’s high time that we get our sh*t together and legalize weed in PA + USA. More justice, jobs, revenue, and freedom.”

Fetterman and Frost arrived just as Democrats faced increasing criticism for squandering a two-year opportunity to pass cannabis reform while the party commanded both congressional chambers and the White House. “Democrats have promised action on cannabis consistently for the past two years, yet leadership consistently failed to prioritize and advance marijuana reform legislation, including legislation to provide clarity to banks and to provide grant funding for state-level expungement efforts, despite having several opportunities to do so,” said Erik Altieri, executive director for the National Organization for the Reform of Marijuana Laws.

Particularly deserving of derision, according to Altieri and other activists, was Schumer’s focus on passing broad reform legislation like the Cannabis Administration and Opportunity Act (CAOA)—which would deschedule cannabis, give regulatory authority to the states, and prioritize restorative and economic justice—instead of going for what seemed like an easy incremental win with the SAFE Act. The banking legislation had forty-two co-sponsors in the Senate last year, but instead of calling for a vote on a standalone bill, Democratic leadership rolled the banking legislation into two spending bills—the National Defense Authorization Act and an omnibus bill—and then allowed Republicans to strip the provisions from both at the eleventh hour.

Even McConnell pointed out the tactical error. “If Democrats wanted these controversial items so badly, they had two years to move them across the floor,” he said during a December speech on the Senate floor.

Observers and legislators expect several comprehensive bills to weave their way through this session of Congress, but they are less likely to pass than narrow legislation providing safe harbor to banks that serve state-legal businesses. The SAFE Act has broad support because it addresses a sliver of the issue: The banking bill simply seeks to protect what’s already legal without apologizing for bad policies of the past, exonerating criminal behavior, or giving advantages to specific groups. The broader bills are more ambitious, containing language that touches on racism, criminal justice, competition, calcified interstate commerce laws and, of course, decriminalizing what some lawmakers insist is a gateway drug. Legislators in both parties find some of these subjects uncomfortable or even untouchable.

What to expect in 2023

Not much is clear about the 118th Congress, but this is: Any bill that didn’t pass during the previous session, which ended January 3, is dead. If it is to continue under consideration, it must start the process again from the beginning. Some of the bills have been circulating for ten years, and yet their sponsors remain committed to passing the legislation.

Rep. Nancy Mace (R-SC) already has indicated she will refile the States Reform Act, which would leave legalization decisions up to the states but mandate expungement for all. Schumer’s CAOA does not have significant support in the Senate yet, but it’s possible pieces of the act could be merged into more promising omnibus legislation or standalone bills. The Safe Act almost certainly will be reintroduced in both chambers, although it may be tweaked in the House to incorporate expungement, money-laundering, and Second Amendment provisions that were added in the Senate to secure conservative support.

The House may not be as friendly to reform this session as it was last session, but new Minority Leader Hakeem Jeffries (D-NY) sees reasons for optimism. Jeffries is very pro-reform and much respected by his caucus. He told ABC News’s George Stephanopoulos he believes cannabis is “an opportunity for common ground” with the new Republican leadership. Sixty-five percent of Republican voters approve of medical legalization, and a banking bill that protects what’s already legal in the majority of the country would be a non-controversial way for even the staunchest of hardliners to please their constituents. If Jeffries can keep Democrats on the straight and narrow and rely on pro-reform Republicans like Mace, Ohio’s Dave Joyce, and Indiana’s Jim Banks to put pressure on just a few of their colleagues, the banking bill, at least, may have a legitimate shot at seeing a presidential signature this term.

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Power Players

A relative handful of representatives and senators could exert outsize influence over the fate of legislation proposed this year. These are the people to watch.

Reform advocates

Sen. Chuck Schumer (D-NY)

Senate majority leader

As majority leader, Schumer has a great deal of influence over what bills reach the floor. One of the few politicians NORML rates A+, he favors broad reform over incremental changes, which proved problematic last session. If he’ll let SAFE through as a standalone this year, the banking bill just might pass.

Sen. Dick Durbin (D-IL)

Chair, Committee on the Judiciary

A proponent of social equity and criminal-justice reform, Durbin opened a judiciary subcommittee hearing on decriminalization last year by calling current policies unjust and racially biased. He holds significant power to determine whether bills reach the Senate floor.

Sen. Cory Booker (D-NJ)

Chair, Subcommittee on Criminal Justice and Counterterrorism

One of the most forceful pro-reform voices in Congress, Booker has sponsored or co-sponsored numerous bills since 2016. As a subcommittee chair, he is well positioned to impact the fate of bills addressing social equity and criminal justice.

Rep. Nancy Mace (R-SC)

Mace, who represents a state where medical use remains illegal, could become key in pushing legislation through the House. A states’ rights advocate and descheduling proponent, she’s savvy enough to sway moderate Republicans.

Rep. Hakeem Jeffries (D-NY)

House minority leader

Jeffries wants to “reverse the damage” from the war on drugs, either incrementally or with broad legislation. He believes Republicans can be persuaded to support bills like the SAFE Act that offer common-sense reform without triggering culture-war controversy with equity and criminal-justice provisions.

Rep. Dave Joyce (R-OH)

Co-chair, Congressional Cannabis Caucus

Joyce is a successful consensus-builder and a strong reform advocate. He has sponsored or co-sponsored numerous bills and voted for everything except the Marijuana Opportunity Reinvestment and Expungement Act. Along with Mace, he’s savvy enough to swing Republican votes toward reform.

Reform Opponents

Sen. Mitch McConnell (R-KY)

Senate minority leader

McConnell is a shrewd politician known for his ability to keep his party united behind his agenda. Although he shepherded hemp legalization through the Senate, he’s an intransigent opponent of even medical legalization.

Sen. Ted Cruz (R-TX)

Member, Committee on the Judiciary

Brash and attention-seeking arch-conservative Cruz is vehemently against reform, even for medical use, both federally and in his home state. He supports mandatory minimum sentences for simple possession. As a member of the Judiciary Committee, he’ll have a say in whether reform bills progress.

Sen. Mike Crapo (R-ID)

Member, Committee on Banking, Housing, and Urban Affairs

While chairman of the banking committee, staunchly anti-reform Crapo proposed adding a 2-percent cap on THC to the SAFE Act. He still serves on the committee, through which all banking bills must pass.

Rep. Kevin McCarthy (R-CA)

Speaker of the House

Although he voted in favor of the SAFE Act (twice) and the research act recently signed into law, McCarthy’s otherwise perfect “no” record stretches all the way back to his tenure in the California Assembly. He consistently opposed the Rohrabacher-Farr amendment that prevents the federal government from using tax dollars to interfere with state-legal programs.

Rep. Jim Jordan (R-OH)

Chair, Committee on the Judiciary

As chairman of the powerful House Judiciary Committee, Jordan wields an enormous amount of influence over which bills are considered. A founding member of the hard-right Freedom Caucus, he has voted against every piece of reform legislation.

Rep. Steve Scalise (R-LA)

House majority leader

Scalise, who is responsible for scheduling legislation to be heard on the House floor, is so anti-reform that he voted to remove federal funding protections from universities that study cannabis. He considers cannabis a gateway drug.

Wildcards

Rep. Tom Cole (R-OK)

Chair, House Rules Committee

While not generally pro-reform, Cole is a proponent of the SAFE Act, saying it will decrease the opportunity for violent crime. Any reform bills will need approval from his committee before proceeding to the floor.

Sen. Sherrod Brown (D-OH)

Chair, Committee on Banking, Housing, and Urban Affairs

Brown supports decriminalization but not necessarily legalization. He was not in favor of previous SAFE bills but said he expects his committee this year will approve an expanded version that incorporates expungement and Second Amendment components.

President Joe Biden

In 2020, Biden apologized for his role in drafting and passing some of the most damaging drug-related legislation in U.S. history during his years in Congress. In 2022, he signed standalone research-reform legislation, issued pardons, and ordered a study into whether cannabis should remain federally prohibited. He’s not expected to balk at reform legislation that reaches his desk.

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The Legislation

Five major bills that didn’t pass in 2022 are on track to be reintroduced in 2023.

SAFE Act

First introduced by Rep. Ed Perlmutter (D-CO) in 2013, the Secure and Fair Enforcement Act would create a safe harbor for financial institutions to provide traditional banking services, including loans and lines of credit. The bill has passed in the House six times with bipartisan support but failed to gain traction in the Senate. Senate banking committee chairman Sherrod Brown (D-OH) said he expects a bipartisan version that contains money-laundering, expungement, and Second Amendment provisions to see action in the upper chamber this year.

CAOA

The nearly 300-page Cannabis Administration and Opportunity Act in the Senate is a sprawling effort to normalize the industry by removing cannabis from the Controlled Substances Act (CSA), taxing and regulating commerce, and addressing issues including equity and criminal justice. Introduced by Majority Leader Chuck Schumer (D-NY) and Sens. Ron Wyden (D-OR) and Cory Booker (D-NJ), it has not picked up much support in the six months since it was introduced, but it almost certainly will receive a hearing this year.

States Reform Act

Introduced by Rep. Nancy Mace (R-SC), the act mandates the federal government expunge most non-violent cannabis-related criminal records, ensure veterans receive counseling and recommendations from the Veterans Administration, and treat cannabis as it does liquor (decriminalizing the plant and leaving all regulation to the states). The bill has been referred to twelve committees and was heard in November in the Oversight and Reform Committee. Mace is willing to merge key provisions with other bills to win incremental reforms.

MORE Act

The Marijuana Opportunity Reinvestment and Expungement Act would remove cannabis from the CSA, leaving legalization and regulation up to the states while imposing a federal excise tax. The bill incorporates expungement provisions and an outline for funding equity licensing grants. Introduced by Rep. Jerrold Nadler (D-NY), MORE narrowly passed the House on a party-line vote in April 2022 but died in the Senate. Nadler plans to reintroduce the bill, but House Judiciary Chairman Jim Jordan (R-OH) may kill it.

HOPE Act

Introduced by Reps. Dave Joyce (R-OH) and Alexandria Ocasio-Cortez (D-NY), the Harnessing Opportunities by Pursuing Expungement Act was the first Republican-led federal reform effort. The bill would provide federal grants to support states’ expungement efforts and require the Department of Justice to conduct a study of convictions on individuals’ lives. HOPE died in the House Judiciary Committee but received significant discussion in the Senate during end-of-the-year legislation negotiations. Because it would require funding, the bill is unlikely to advance in the Republican-majority House.