The Republican-controlled US Senate will host a hearing on cannabis banking today.
The hearing, titled “Challenges for Cannabis and Banking: Outside Perspectives,” is both unexpected and unprecedented. Legalization supporters Senators Cory Gardner and Jeff Merkley are scheduled to testify before the Committee on Banking, Housing, and Urban Affairs, along with Rachel Pross, chief risk officer at Maps Credit Union, Joanne Sherwood, president and CEO of Citywide Banks, Garth Van Meter, VP of government affairs at anti-legalization group Smart Approaches to Marijuana, and John Lord, CEO of LivWell Enlightened Health, a cannabis company.
Financial institutions, even in states where cannabis is legal, are usually hesitant to serve cannabis businesses while cannabis remains illegal at the federal level. Hence the SAFE Banking Act, which provides legal protection to financial institutions serving the cannabis industry.
The Act was endorsed by the U.S. House Committee on Financial Services in a historic vote in March. But the Act has to clear several legislative hurdles before it can pass Congress. (Read Cannabis Wire’s coverage of the House vote here.)
Cannabis Wire reported in April on the banking and insurance industry’s lobbying efforts around the Act in the first quarter of 2019, with major organizations such as Wells Fargo, HSBC North America, and the American Family Mutual Insurance Company joining the debate on cannabis banking. (Read Cannabis Wire’s reports on first quarter lobbying data here and here).
A look at second quarter disclosures indicates that the Act continues to attract interest from a diverse range of groups and organizations. Cannabis Wire spotted the following new entities lobbying on the Act for the first time between April and June: Eaze Technologies, Inc., a California-based online platform for legal cannabis delivery, the American Council of Life Insurers, Transamerica Companies, a life insurance company, the New England Council, a Boston-based alliance of public and private organizations, the state of Nevada and the city of Sacramento, California.
Notably, the second quarter also saw the entry of one of the world’s largest cannabis companies, Canopy Growth, into US cannabis lobbying. As Cannabis Wire first reported last week, Platinum Advisors, a California-based lobbying firm, registered on behalf of the Canadian cannabis company last month.
In a letter to Senators Gardner and Merkley in April, the American Bankers Association wrote, “The SAFE Banking Act is an important measure that helps clarify many issues for the banking industry, regulators, businesses and consumers,” adding, “Without greater clarity, that entire portion of economic activity – estimated by some to be in the tens of billions of dollars – in legal cannabis states will continue to be marginalized from the banking system.”
However, the Act falls short when it comes to protecting insurance companies, Jonathan Bergner, assistant vice president of federal affairs at the National Association of Mutual Insurance Companies, told Cannabis Wire. “Stronger language in the insurance context is needed,” Bergner said.
It is for that reason the Association worked with federal legislators on standalone legislation for insurance companies serving the cannabis industry, he said. The Clarifying Law Around Insurance of Marijuana (CLAIM) Act was introduced by Senator Bob Menendez on Monday to provide specific protections to insurance companies.However, the Association remains supportive of the SAFE Banking Act as it “advances conversation” surrounding the challenges in insuring cannabis businesses, Bergner added.
Some of the other big names that lobbied on the Act in the first quarter and continued in the second quarter include:
PharmaCann (pending acquisition by national cannabis company, MedMen)