Renewed Bipartisan Effort Aims to Open Banking to Cannabis Industry
WASHINGTON — Just days after an extraordinary cannabis policy summit in the U.S. Capitol, a bipartisan group of lawmakers has reintroduced a bill aimed at ensuring legal cannabis businesses have access to banking and other financial services.
The SAFE Banking Act has actually had no problem passing in the House in the past, having done so seven times in recent years with strong bipartisan support.
The bill, however, has repeatedly died in the Senate, despite the strong advocacy of Sen. Jeff Merkley, D-Ore.
Merkley was again among those who reintroduced the bicameral bill on Thursday, along with Sen. Steve Daines, R-Mont., who also happens to be head of the GOP’s Senate Campaign Committee.
The companion bill was reintroduced in the House by Reps. Dave Joyce, R-Ohio, and Earl Blumenauer, D-Ore.
Though scores of states have now approved the possession and use of cannabis for medicinal and recreational purposes, businesses catering to these uses have been denied access to traditional and secure banking services because they fear they may be prosecuted under federal law, which still classifies cannabis as an illicit, illegal drug.
Merkley and Daines argue that forcing legal businesses to operate on an all-cash basis is dangerous for the businesses, their customers and their communities as a whole by creating “an open invitation to robbery, money laundering and organized crime.”
“It’s way past time to fix it,” Merkley said.
In a written statement, Merkley said he believes that for the first time, there may well be a path for moving the SAFE Banking Act through the Senate Banking Committee and actually bringing the bill up for a vote on the Senate floor.
“So let’s make 2023 the year that we get this bill signed into law so we can ensure that all legal cannabis businesses have access to the financial services they need to help keep their employees, their businesses and their communities safe,” he said.
Both House sponsors take a different approach when talking about cannabis, arguing that by denying state-legal cannabis companies access to financial services, the federal government is actually distorting a growing commercial sector that’s creating real jobs.
“This legislation will save lives and livelihoods. It is past time that Congress addresses the irrational, unfair and unsafe prohibition,” said Blumenauer, founder and co-chair of the Congressional Cannabis Caucus.
If the bill passes both the House and the Senate this year and is signed into law by President Joe Biden, the SAFE Banking Act of 2023 would prevent federal banking regulators from:
- Prohibiting, penalizing or discouraging a bank from providing financial services to a legitimate state-sanctioned and regulated cannabis business, or an associated business (such as a lawyer or landlord providing services to a legal cannabis business).
- Terminating or limiting a bank’s federal deposit insurance primarily because the bank is providing services to a state-sanctioned cannabis business or associated business.
- Recommending or incentivizing a bank to halt or downgrade providing any kind of banking services to these businesses.
- Taking any action on a loan to an owner or operator of a cannabis-related business.
This legislation would also create a safe harbor from criminal prosecution and liability and asset forfeiture for banks and their officers and employees who provide financial services to legitimate, state-sanctioned cannabis businesses, while maintaining banks’ right to choose not to offer those services.
The bill also provides protections for hemp and hemp-derived cannabidiol-related businesses.
The legislation, for the first time, explicitly extends the safe harbor to Community Development Financial Institutions and Minority Depository Institutions to ensure they can also serve cannabis businesses. CDFI and MDI serve underserved communities who face challenges in accessing capital and provide affordable access to financial services.
The SAFE Banking Act would require banks to comply with current Financial Crimes Enforcement Network guidance, while at the same time allowing FinCEN guidance to be streamlined over time as states and the federal government adapt to legalized medicinal and recreational cannabis policies.
“As it stands, the federal government has denied state-legal cannabis companies the same access to financial services as every other legal business across the Buckeye State and our country,” said Joyce, co-chair of the Congressional Cannabis Caucus.
“Not only does this distort the market in a growing industry, but it also forces businesses to operate in all cash, making them and their employees sitting ducks for violent robberies. The bipartisan SAFE Banking Act will allow cannabis businesses to operate legally without fear of punishment by federal regulators, making our communities safer,” he said.
The Senate bill has 38 co-sponsors in the Senate and 8 co-sponsors in the House.
They include Sens. Jacky Rosen, D-Nev., Bill Cassidy, R-La., Kirsten Gillibrand, D-N.Y., Lisa Murkowski, R-Alaska, Edward Markey, D-Mass., Ben Ray Luján, D-N.M., Rand Paul, R-Ky., John Fetterman, D-Pa., Ron Wyden, D-Ore., Kyrsten Sinema, I-Ariz., Mark Kelly, D-Ariz., Amy Klobuchar, D-Minn., John Tester, D-Mont., Mark Warner, D-Va., and John Hickenlooper, D-Colo., as well as Reps. Warren Davidson, R-Ohio, Jim Himes, D-Conn., Brian Mast, R-Fla., Guy Reschenthaler, R-Pa., and Lou Correa, D-Calif.