In perhaps the most historic move in marijuana politics since Colorado state legalized recreational marijuana in 2014, the House of Representatives passed the Secure and Fair Enforcement, or SAFE, Banking Act, on Wed., Sept. 25, which would allow state cannabis businesses to use banking services.
Sponsored by Colorado representative Ed Perlmutter, the reform bill passed the house 321-103, garnering a great deal of bipartisan support. All Democratic representatives but one and just less than half of the Republican representatives voted in favor of the bill, potentially offering a solid groundwork for the bill’s upcoming date in the Republican-controlled Senate.
In the nine US states where the practice is currently legalized, recreational marijuana businesses have been running without access to banking services. These companies are almost completely operated on cash – all revenue and payments to employees and suppliers are never filed into a bank account.
This is due to the fact that recreational marijuana is still illegal at the federal level; therefore, state cannabis businesses cannot file their money with federal banks. Even state banks are operating under federal regulatory laws, and the act of accepting money from cannabis businesses would be considered money laundering.
This leaves anyone operating or working for a business in the cannabis industry in the midst of a public safety crisis, as they are forced to operate in cash. Transporting large amounts of cash and storing it in remote locations is a dangerous activity. Furthermore, since the state of the industry is widely known, criminals are aware of the amount of cold cash these businesses are dealing in and therefore are more likely to strike them.
These businesses are at an extreme risk for violent activity. Rep. Danny Heck (D-WA) mentioned this controversy, sharing a story in the House meeting on Wednesday of a security guard who was killed on the job at a cannabis business.
On the opposite side of the argument, Rep. Patrick McHenry (R-NC) of the House Financial Services Committee made a statement addressing the potential of drug cartels to acquire financial and banking supplies. McHenry and only a few others expressed their concern with the bill; overall it has not been met with much contention.
Other oppositional views include the idea that this legislation would further the health and revenue of the tobacco industry, which has invested billions into cannabis products.
President of the prohibitionist organization, Safe Approaches to Marijuana, Kevin Sabet stated that “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.”
This bill carries the potential for cannabis policies to continue making their way through legislation. Many American citizens and legislators are hopeful that this bill could catalyze a movement for total legalization of marijuana and a more intense reform of criminal justice and criminalization of cannabis substances.
During the House session on Wednesday, Perlmutter voiced his passion for the bill, stating, “If someone wants to oppose the legalization of marijuana, that’s their prerogative, but American voters have spoken and continue to speak and the fact is you can’t put the genie back in the bottle. Prohibition is over. Our bill is focused solely on taking cash off the streets and making our communities safe and only congress can take these steps to provide this certainty for businesses, employees and financial institutions across the country.”
#SAFEBanking is a big deal for the thousands of employees, biz & communities who have been forced to deal in piles of cash. Only Congress can provide the certainty financial institutions need to start banking cannabis-related legitimate businesses. It’s time to pass #SAFEBanking. https://t.co/ldZRxiMHsm
— Rep. Ed Perlmutter (@RepPerlmutter) September 25, 2019
The bill also protects hemp and CBD businesses, which could sway Senate Majority Leader Mitch McConnell (R-KY) to render his support; McConnell was widely supportive of the recent Farm Bill, which legalized hemp, but he has stated that he does not feel the same way about marijuana.
This rapidly growing industry has been generating billions of dollars since state legalization. Access to banking would improve safety in all communities and businesses where cannabis is present as well as removing a major inhibitor for the cannabis industry.
“This is an important foundation, but it’s not the last step. This approval today will provide momentum that we need for further reform that we all want and will make America safer and stronger,” stated Rep. Earl Blumenauer (D-OR) on Wednesday. It’s now up to the Senate to decide whether or not this foundational bill will continue marijuana’s reign in America.
For more information on banking and cannabis businesses, refer to this New York Times video.
