The SAFE Banking Act of 2021 is in trouble. The bill giving access to financial services to cannabis businesses is stuck in committee with a chairman who doesn’t want to talk about it.
Sens. Jeff Merkley and Steve Daines published an open letter last Thursday urging immediate action on cannabis banking. They called the Secure and Fair Enforcement (SAFE) Banking Act “common sense reform to the state-level cannabis industry.” Unfortunately, the chairman of the Senate Banking Committee, Sen. Sherrod Brown, remains unmoved.
“We write today imploring you to schedule a markup,” began the June 17 letter. It was addressed to Brown and Sen. Pat Toomey, the ranking member. It further noted that S. 910 “has strong bipartisan support in the Senate with 37 co-sponsors, plus ourselves.”
The open letter put a spotlight on problems still facing the growing cannabis industry.
Though Brown has said he will get to the SAFE Banking Act “eventually,” he refuses to address it publicly. An email about this story, and the letter, received a frank, “We have no comment,” from the Brown’s D.C. staff.
With this lack of urgency, is SAFE Banking doomed, again?
What is the SAFE Banking Act?
While it stops short of rescheduling cannabis, the SAFE Banking Act protects businesses operating in states where cannabis is legal. Because the plant is still classified by federal law as a narcotic with “no valid medical use,” banks face penalties for dealing with cannabis-related businesses. Without banking, they’re forced to deal exclusively in cash and all-cash businesses make prime targets for criminals.
By lifting restrictions and penalties on financial institutions, the bill brings the cannabis industry fully into the economy.
The House of Representatives passed their version of the bill, H.R. 1996, on April 19. The vote was 321-101, an overwhelming show of support. The timing seemed to signal hope before 4/20, the day celebrated as a cannabis holiday. That doesn’t mean that it can clear a hostile Senate, though.
The House passed SAFE Banking in 2019 with 321 yea votes, too. That bill languished in the Senate Banking Committee for the rest of the term. Voters could be looking at the same situation, even with Democrats in control.
Brown tempered expectations on April 22, three days after the House version passed.
“I think we need to look at a number of things.” Brown told Cleveland.com. His vague reservations undermined any serious legislative push. He also made clear that it wouldn’t be a priority, saying “this committee’s been too much about Wall Street and not enough about housing.”
Slighting cannabis consumers by conflating them with Wall Street may give Brown a good sound-bite, but it’s disrespectful of the hardships SAFE Banking will address. Hardships about which he seems ignorant, but affecting his own constituents.
A question of public safety
A press release from Sen. Jeff Merkley explains the SAFE Banking Act:
To address the safety concerns resulting from these state legal businesses being shut out of banking services, the SAFE Banking Act 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 an lawyer or landlord providing services to a legal cannabis business);
- Terminating or limiting a bank’s federal deposit insurance solely 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; or
- Taking any action on a loan to an owner or operator of a cannabis-related business.
While the co-sponsors plead for markup, cannabis consumers and workers remain in danger.
“The inability of these state-legal entities to bank their significant cash reserves is an issue of public safety,” the letter reads (embedded below). “[T]here have been 135 robberies and armed burglaries against cannabis dispensaries in [Oregon] since May 2020.” Merkley noted about his home state.
Daines mentioned problems in Montana, too.
“In Yellowstone County, two medical marijuana dispensaries were burglarized,” the letter continued. Both of those burglaries happened on the same day in March of this year.
Brown’s state of Ohio is home to over 185,000 registered medical cannabis patients, according to a report from the Marijuana Policy Project (MPP). Their safety doesn’t seem to concern him. The safety of every employee in an industry that accounted for $17.5 billion in 2022 doesn’t rate a comment, either.
Will the SAFE Banking Act become law?
“We definitely appreciate the Senate sponsors urging committee leaders,” said Morgan Fox when asked for comment. Fox is Media Relations Director for the National Cannabis Industry Association, a trade organization. He expressed an optimistic view of the future of cannabis banking.
“Chairman Brown’s response at least shows that it is on the radar,” says Fox. That response has been limited to political insiders, though, leaving the rest of the cannabis community in the dark.
PiL News did find reason to believe that action, while not imminent, is at least intended.
“I think Democrats realize they need to pass something cannabis-related before the mid-term elections,” said one well placed cannabis advocate. They think banking might serve as a compromise between rescheduling cannabis and nothing at all.
“SAFE has broad bipartisan support in the Senate, making it the easiest lift.” The industry insider required anonymity to discuss private communications.
Sens. Merkley and Daines, however, along with the voters they represent, want action now. Behind the scenes talk isn’t going to satisfy the 71% of U.S. residents living under legal cannabis laws.
The senators, their 37 fellow co-sponsors, cannabis consumers, patients and employees shouldn’t have to wait. Until we hear a public statement of support or action on S. 910, we’ll be writing about the harms of putting it off.
Welcome to #SAFEBankingWatch.
Note: The prognosis from Govtrack.com gives the SAFE Banking Act (S. 910) a 13% chance of being enacted as of this printing. The figure is based on legislative data analysis by Skopos Labs, a consulting firm. Those odds were a percentage point higher when I started writing this story on Monday.
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