House Passes Bill Granting Marijuana Businesses Access to Banking
WASHINGTON – The House passed a bill earlier this week that would grant legal marijuana businesses access to banking, resolving a longstanding challenge for the growing industry.
The bill, called the SAFE Banking Act, passed 321-103 on the strength of near-unanimous support from Democrats and nearly half of Republicans.
“Having worked alongside Congressional leaders to resolve the cannabis industry’s banking access issues for over six years, it’s incredibly gratifying to see this strong bipartisan showing of support in today’s House vote,” said Aaron Smith, executive director of the National Cannabis Industry Association.
“We owe a great debt of gratitude to the bill sponsors, who have been working with us to move this issue forward long before anyone else thought it was worth the effort.”
Though the bill’s prospects in the Senate are far from certain, supporters like Smith said the amount of Republican support in the House was a good sign.
“This bipartisan legislation is vital to protecting public safety, fostering transparency, and leveling the playing field for small businesses in the growing number of states with successful cannabis programs,” he said, adding there’s no reason such “commonsense legislation” shouldn’t make its way to the president’s desk.
Thirty-three states have legalized cannabis for medical or recreational use. But due to current federal laws and financial regulations, most banks are unwilling to risk prosecution or punishment to work with state-legal cannabis businesses and often ancillary businesses that service the cannabis industry.
This forces many businesses in this space to operate almost entirely in cash, creating public safety issues for everyone involved, from businesses and their employees to tax collectors and regulators.
These policies also hinder the efforts of regulators and law enforcement to effectively monitor the legal cannabis market.
Financial services institutions are also unable to provide loans to people in the cannabis industry, which disproportionately impacts small businesses and marginalized communities with less access to personal wealth or investment capital.
But the federal prohibition on the drug has made it difficult for businesses in the multibillion-dollar industry to get bank accounts, loans and other financial services.
The Obama administration did put in place policies that allowed financial institutions to work with marijuana business in a limited fashion, but those politics were quickly reversed by President Trump and former Attorney General Jeff Sessions.
Rob Nichols, president and CEO of the American Bankers Association, called the vote “a significant step forward for public safety, transparency and common sense.”
“By helping to provide clarity for the financial sector in those states where cannabis is legal, this bill will help banks meet the needs of their communities while reducing cash-motivated crimes, increasing the efficiency of tax collections and improving the cannabis industry’s financial accountability,” Nichols said. “It will also ensure that businesses with indirect ties to the cannabis industry – including vendors, utility companies and law firms – won’t be needlessly forced out of the financial system.”
Opponents said the bill would not only encourage the spread of marijuana use, but shows the House is tone-deaf to its implications in the unfolding vaping crisis.
“Americans are getting sick and a handful have died as a possible result of marijuana vaping,” said Dr. Kevin Sabet, president of the anti-legalization group Smart Approaches to Marijuana.
He described passage of the bill as rewarding “big marijuana” with investment opportunities.
“This is a gift to Big Tobacco, which has already invested billions into pot. Granting this industry access to banks will bring billions of dollars of institutional investment from the titans of addiction and vastly expand the harms we are already witnessing,” he said.
“It is unfortunate that last minute changes to the bill, such as including a repeal of Operation Choke Point, influenced many lawmakers to vote in favor of the bill. It’s a dangerous and dramatic reshaping of our nation’s drug policy masterminded by Washington lobbyists who are trying to legalize marijuana and expand this industry through any means necessary,” Sabet added.
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