Democrats hoping to take back control of the U.S. Senate in the midterm elections found an opening in Montana, but it comes at the expense of a lead Republican champion for cannabis banking reform.
Sen. Steve Daines, R-Mont., announced March 4 that he won’t seek reelection for a third term. Before assuming his Senate seat in 2015, the 63-year-old also served a two-year term in the U.S. House.
“After wrestling with this decision for months, I have decided I will not seek reelection,” he said. “It is time for a new leader, like Tim Sheehy, to spearhead the fight for Montana in the United States Senate.”
Sheehy is Montana’s junior senator who helped Senate Republicans win a majority in the 2024 election, when he defeated third-term Democratic incumbent Jon Tester.
In Daine’s departure, the U.S. Senate will lose one of its leading voices to provide safe harbor to banks, credit unions and other federally regulated financial institutions wishing to serve state-sanctioned, but federally illegal, cannabis businesses. Montana is one of 23 states to have an adult-use cannabis marketplace, with Virginia planning to become the 24th very soon.
Last Congress, Daines was the lead Republican sponsor for the bipartisan Secure and Fair Enforcement Regulation (SAFER) Banking Act, which he called a “win-win,” saying no business should be shut out of banks or credit unions because of “ideological differences” in Washington.
“The current all-cash model of legal cannabis businesses makes them targets for theft, tax evasion and organized crime,” Daines said during the Senate Banking Committee’s markup hearing of the SAFER Banking Act in September 2023. “The key to addressing this risk is by ensuring that all legal businesses have access to the banking system.”
Aiming to bring traditional banking opportunities and transparency to state-licensed cannabis businesses, the Democratic-controlled committee approved the legislation in a 14-9 vote, marking the first time any version of the measure advanced in the Senate.
Previously, the U.S. House passed the SAFE Banking Act seven times under a Democratic majority between 2019 and 2022 – each time getting stifled by former Senate Majority Leader Mitch McConnell, R-Ky.
While advocating for cannabis banking reform earlier in 2023, Daines said, “the real size of this market is estimated to be a hundred billion dollars,” attributing 75% of sales to the unregulated and unlicensed market.
He suggested that allowing cash transactions from state-sanctioned cannabis businesses into the U.S. banking system would promote public safety, allowing law enforcement to better distinguish legitimate actors and spend more resources toward bringing down bad actors.
“The people and states across this country have spoken, and it’s abundantly clear that the status quo is not only untenable; it’s very dangerous,” he said. “The SAFE Banking Act is a commonsense bill that can and should pass and would immediately improve the public safety threats we’re seeing on the ground in our states.”
Although there was enough support for the SAFER Banking Act last Congress to avoid a filibuster in the upper chamber, former Senate Majority Leader Chuck Schumer, D-N.Y., never brought the bill to the floor for a vote.
With Republicans in control of both chambers this Congress, no version of the SAFE or SAFER Banking Act has been introduced so far.
While Tester supported the legislation, his successor, Sheehy, hasn’t had a reason to publicly address the issue since taking Montana’s Senate seat in 2025.
In Daine’s announcement that he won’t seek reelection, he endorsed Kurt Alme, a Trump appointee who serves as the U.S. attorney for Montana. Alme also served during President Donald Trump’s first term in the White House.
In 2018, when then-U.S. Attorney General Jeff Sessions rescinded the Biden-era Cole Memo, it gave federal prosecutors the green light to once again focus their resources on enforcing federal law against individuals operating within their state’s cannabis laws.
Alme issued the following statement in 2018 in response to the rescission:
“Yesterday, the attorney general rescinded the Cole Memo on marijuana prosecutions and directed that federal marijuana prosecution decisions be governed by the same principles that govern all federal prosecution decisions. The United States Attorney’s Office in Montana is guided by these principles in marijuana prosecutions – focusing in particular on identifying and prosecuting those who create the greatest safety threats to our citizens and communities. Consistent with the attorney general’s latest guidance, we will continue to take this approach in all of our work with our law enforcement partners throughout Montana.”
