Tomorrow, a Republican-controlled Senate Banking Committee hearing will examine cannabis businesses’ lack of access to banking services to further consider the SAFE Banking Act. The July 23, 2019 hearing will include Senators Jeff Merkley (D-OR) and the legislation’s chief GOP cosponsor, Cory Gardner (R-CO). As we’ve discussed on the blog previously, the legislation would allow financial institutions to serve state-legal marijuana businesses without fear of federal repercussions. Supporters of the Act have stressed the public-safety concerns that have resulted from the lucrative cannabis industry conducting business on a cash-only basis.
Scheduling of the hearing took industry officials by surprise based on prior comments. In April and May 2019, Chairman of the Committee, Senator Mike Crapo (R-ID), indicated he might refuse to give the topic a hearing: “as long as cannabis is illegal under federal law, it seems to me to be difficult for us to resolve ‘the financial services piece.’” The scheduling comes after pressures have increased, with state banking associations, the National Association of State Treasurers, the top financial regulators of twenty-five states, a majority of state attorneys general, and bipartisan governors of twenty states all having now endorsed the legislation and calling on Congress to act.
The hearing, titled “Challenges for Cannabis and Banking: Outside Perspectives,” will include witnesses such as representatives of the Credit Union National Association (CUNA), executives from the banking industry like Citywide Banks, and prohibitionist group Smart Approaches to Marijuana. CUNA President and CEO, Jim Nussle, already commented:
At its heart, cannabis banking is a public safety issue. It’s an $8.3 billion industry that’s currently being forced to operate almost entirely in cash. … While 33 states, territories and DC have legalized cannabis, it’s been overwhelmingly difficult to provide these businesses financial services because handling transactions are currently considered money laundering. Credit unions have been leading the way in helping to get this money off the streets. We are dedicated to finding a solution to this ongoing challenge that impacts every community around the country and look forward to working with Senate leaders during this hearing and with Congress at large.”
Witnesses will also include CEO of marijuana retail chain LivWell Enlightened Health, John Lord, and CEO of the Cannabis Trade Federal, Neal Levine. Levine said in a statement that he hoped the organization’s testimony will contribute to the “growing momentum behind meaningful and historic cannabis policy reform”:
This hearing is yet another sign that Congress is taking the cannabis banking problem seriously and intends to take action to correct it,” he said. “Cannabis businesses operating legally under state and local laws should have the same access to banking and financial services as any other type of business.”
As a reminder, the companion legislation cleared the House Financial Services Committee with a bipartisan vote in March and now has 206 cosponsors (almost half the body!). The Senate legislation is presently backed by 32 out of 100 senators. The House version of the SAFE Banking Act was expected to be voted on by the full chamber by now, but it’s been delayed – a spokesperson for Representative Ed Perlmutter (D-CO) indicated: “House Democrats have a robust agenda which has made it tough to get time on the legislative calendar. … But as we continue to talk with people, we keep gaining more and more support and look forward to a strong vote on the floor of the House soon.” Tomorrow’s hearing is another step in the right direction.
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Author: Jihee Ahn