The Senate Banking Committee is holding a hearing to discuss the bipartisan bill that would allow the cannabis industry to access traditional banking services. The hearing, titled “Examining Cannabis Banking Challenges of Small Businesses and Workers,” will hear testimony from lawmakers on both sides of the aisle, including Sens. Jeff Merkley, D-Ore., and Steve Daines, R-Mont., who reintroduced the bill last week. The committee will also hear from witnesses including the Cannabis Regulators of Color Coalition, Drug Policy Alliance, and the United Food and Commercial Workers International Union.
The hearing will determine the next steps in getting the bill to the Senate floor for a vote. Senate Majority Leader Chuck Schumer and other key lawmakers express support for it. It comes as the marijuana industry, which is facing a downturn even as more states approve legal markets, has pushed Congress to take action on the issue.
Why Banks Are Reluctant
Banks and credit unions face federal prosecution and penalties if they provide services to legal cannabis businesses since it is still a Schedule I substance, along with heroin and LSD. Without access to traditional banks, legal marijuana businesses can’t access loans and capital, or even use basic bank accounts. As such, businesses are forced to operate in a cash-only model, which can result in robbery, money laundering, and organized crime.
The Secure and Fair Enforcement Banking Act, also known as SAFE, hit a wall in Congress last year after lawmakers excluded it from a $1.7 trillion government funding bill. It was the seventh time the legislation, which has always had strong bipartisan support, failed to get through the Senate after passing in the House of Representatives.
Key components of the bill protect banks that work with state-legal cannabis businesses. The legislation would shield them from being penalized by federal regulators, creating a safe harbor from criminal prosecution, liability, and asset forfeiture for banks, their officers, or employees.
The new version of the plan also extends safe harbor to organizations that assist underserved communities including the Community Development Financial Institutions and Minority Depository Institutions — smaller institutions that tailor to communities that have often lacked access to banking services.
The American Bankers Association, which represents banks of all sizes from every state in the country, sent a letter thanking the committee for taking up the matter and urging senators to “markup and advance the legislation as soon as possible.”
This action is welcome news to executives across the industry, as they have faced years of difficulties with banking services. Craig Sweat, the owner of Uncle Budd NYC, the company that first brought mobile dispensary trucks to New York City, has been held up for so long that his products are getting old. He added that his latest business venture hasn’t been able to launch as banks, fearful of federal prosecution, have been giving him the “runaround.”
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