The effort to provide the cannabis industry access to financial institutions and services returned to Capitol Hill on Thursday as the SAFE Banking Act was reintroduced in the House of Representatives.
The bill would protect banks offering services to state-legal operators. It’s widely regarded as the most bipartisan cannabis effort in Congress and this year, two Republicans and two Democrats are taking the lead. The first-round sponsors are Reps. Ed Perlmutter (D-CO), Steve Stivers (R-OH), Nydia Velazquez (D-NY) and Warren Davidson (R-OH).
Many more names are expected to be added to that list. In the last Congress, 206 co-sponsors led to a very lopsided bipartisan vote of 321-103. An impressive feat for any bill during the politics of that moment. Unfortunately for the previous rendition of the bill, COVID-19 stalled its progress. But the House never let up the pressure, including the bill’s language in two pandemic relief bills.
Cannabis Caucus Co-Chair Rep. Earl Blumenauer previously told L.A. Weekly that the SAFE Banking Act was the biggest win for cannabis on Capitol Hill until the MORE Act passed in December.
“Thousands of employees and businesses across this country have been forced to deal in piles of cash for far too long,” said Rep. Perlmutter. “It is time to enact SAFE Banking to align federal and state laws and reduce the public safety risk in our communities. I appreciate the partnership of the cannabis industry and businesses across this country who have added their voice to this effort. The SAFE Banking Act is an important first step to treating cannabis businesses like legal, legitimate businesses and beginning to reform our federal cannabis laws.”
Supporters of the safe banking act have noted for years just how dangerous it is for the cannabis industry to remain a cash-only business. Even prior to the events of last summer, when thieves used the cover of protests to ransack dispensaries around the state, organized bands of criminals were using publicly available licensing information to target operators. Thieves made off with a ton of product and cash, in one instance scoring a six-figure tax payment the company was prepping for the state.
Rep. Blumenauer spoke to how bad things have got for Portland cannabis businesses.
“Addressing the irrational, unfair and unsafe denial of banking services to legal cannabis businesses is not just an economic issue, but an urgent public safety issue that will save lives and livelihoods. In the past year, Portland’s cannabis shops were robbed, burglarized or looted more than 100 times,” Blumenauer said. “During these violent attacks, cannabis workers have been threatened at gunpoint, zip-tied, and repeatedly targeted for simply doing their jobs. Tragically, we have already lost one Portland cannabis worker to this violence. Thousands more people will continue to have a target on their back if Congress does not address the lack of banking access that is posing a real danger to cannabis workers, businesses and our communities. It is a critical element of cannabis reform that can’t wait.”
There is a lot of incentive for operators to see the bill pass beyond being able to cut a check from a reputable financial institution. It will also make it easier to access traditional forms of lending and capitol. This would have a major impact on the mom-and-pop operations that have bootstrapped this far since it would open up additional legit lines of credit and money to expand their businesses.
The National Cannabis Industry Association has been working on the bill since its inception. Aaron Smith, NCIA’s co-founder and CEO, weighed in on the news.
“At a time when small businesses need all the support they can get, and after cannabis businesses specifically have been providing essential services and generating significant tax revenues for states and the federal government with little to no financial relief, it is more imperative than ever to get the SAFE Banking Act passed into law,” said Smith.
Smith went on to not just cover the public safety side, but the simplification of oversight in attempting to track the billions of dollars in revenue flowing across the cannabis supply chain from state to state.
“Lack of access to banking services continues to create serious unnecessary issues for public safety, transparency, and access to traditional lending that smaller operators desperately need,” Smith said. “These businesses are contributing billions of dollars to the national economy every year, and need to be treated like any other legal regulated industry. We are grateful to the sponsors of this legislation who have generated strong and consistent bipartisan support year after year, and we are confident that it has a clear path to approval again.”
The newly formed U.S. Cannabis Council sent out a statement from interim President Steve Hawkins.
“While the SAFE Banking Act is not the only cannabis legislation the U.S. Cannabis Council (USCC) expects this session, it is integral to the success of the responsible cannabis industry of the future,” Hawkins said. “This essential step forward will positively impact social equity candidates often redlined from receiving financial backing and even access to traditional banking services. The SAFE Banking Act provides access to financial services such as small business loans, which create equal opportunity, ensuring more diverse representation within the industry. The Act also protects public safety as the billions of dollars in annual retail revenues are from mostly cash transactions, creating targets for crime and unnecessarily endangering communities.” ❖