GOP Senators Slam Cannabis Banking Reform, 'Cartel Cash' And Oklahoma At Chinese Money Laundering Summit

Senators Chuck Grassley (R-IA) and John Cornyn (R-TX) joined a chorus of criticism against state-legal marijuana markets and the pending cannabis banking reform legislation.

Their remarks are part of the ongoing debate surrounding marijuana policy, which will likely shift following Tuesday's breaking news that the DEA intends to remove cannabis from its 50-year Schedule I status to the less onerous Schedule 3.

Grassley and Cornyn nevertheless raised objections to the proliferation of state-level marijuana legalization efforts and the lack of federal regulation in this area.

Speaking at a Senate hearing on International Narcotics Control, Chinese money laundering, which they referred to as "cartel cash," came up as the meeting looked into the issue of fentanyl.

The Republican senators’ concerns about cannabis banking reform echo those of Senate Minority Leader Mitch McConnell who regularly takes the opportunity to air his opposition to the SAFER Banking Act, which would enable cannabis companies access to banks and financial institutions. In September 2023, the Senate Banking Committee approved the SAFER Banking Act.

Grassley’s justification for opposing cannabis banking reform, he says, is that it would enable money laundering, which many view as the exact opposite of the legislation’s raison d’etre.

Cleaning Dirty Money

"If this legislation passes, Chinese money laundering organizations will have an additional avenue for cleaning dirty money," Grassley said. "They can simply hand it off to Chinese criminal organizations fraudulently running state sanctioned marijuana farms, for introduction into the U.S. banking system."

As cannabis banking and rescheduling are bound to remain hot topics in the coming months, why not join us to talk more about how all of this will affect the future of the industry? Hear directly for top executives, investors, policymakers and advocates at the 19th Benzinga Cannabis Capital Conference, coming to Chicago this Oct. 8-9. Get your tickets now before prices surge by following this link.

Cannabis Chaos In Oklahoma

Grassley brought up the chaos and deadly crime spree connected to cannabis that has plagued Oklahoma these past couple of years. He pinned the problems directly on Chinese criminal organizations.

To make his point, he showed a video of a 2022 shooting that left four dead at an Oklahoma cannabis facility, reported Marijuana Moment.

The shooter in the attack, Chen Wu, was convicted and sentenced to life in prison in February. Grassley said the incident should compel Congress to carefully consider "legislative proposals easing money laundering laws."

He added that Oklahoma law enforcement have raided and closed down over 800 illicit cannabis cultivation operations in the last two years.

Cornyn joined the conversation, asking what seemed to be a rhetorical question. "Can anybody explain to me why, when states have presumably legalized some aspect of the marijuana trade, some medical marijuana and others recreational, why 80 percent of the marijuana sold in California… originated in illegal grows?"

The DEA's operations chief William Kimbell replied that, "By selling marijuana illegally through the black market, they're able to skirt tax laws and they're able to do a multitude of different things by not following regulations."

Now Read: Sam Adams Says Hold My Beer — And You Are: Sales Numbers Dispute Cannabis Cannibalization Narrative

Photo: Courtesy of Kindel Media and 12019 by Pixabay