In a blow to the cannabis industry on Wednesday, Senate Banking Committee Chairman Mike Crapo said that he has concerns about and does not support the SAFE Banking Act that won a historic victory in the House in September. If passed into law, the SAFE Banking Act would provide a safe harbor to financial institutions working with cannabis businesses. Crapo asked for public input on a number of concerns around expanding cannabis industry access to banking, from youth use and product potency to bad actors and money laundering.
“I remain firmly opposed to efforts to legalize marijuana on the federal level, and I am opposed to legalization in the State of Idaho,” Crapo said in a statement. “I also do not support the SAFE Banking Act that passed in the House of Representatives.”
“I have significant concerns that the SAFE Banking Act does not address the high level potency of marijuana, marketing tactics to children, lack of research on marijuana’s effects, and the need to prevent bad actors and cartels from using the banks to disguise ill-gotten cash to launder money into the financial system,” Crapo added.
Crapo acknowledged in a statement that the patchwork of state cannabis laws across the United States, and programs that are operating in defiance of federal prohibition, has “created challenges for businesses in those states and has resulted in increased pressure for depository and financial institutions to provide financial services.”
Still, the Chairman proposed a number of amendments to the version of the Act passed by the House. For example, Crapo suggested nixing a Government Accountability Office study on diversity and inclusion in the cannabis industry. He also suggested making access to banking services contingent on a product potency cap of 2% THC, and adequate health warnings for use by minors or pregnant people. Crapo suggested that this cap “apply until each state legislature affirmatively determines the appropriate level of THC potency for cannabis and cannabis products.” He also suggested “preventing the banking of high potency THC vape” products and “edibles that are in many kid-friendly forms like candies and gummies.”
You can read the complete statement and list of suggested amendments here.
Colorado Sen. Cory Gardner told Cannabis Wire that he and Crapo have had “numerous discussions” about the SAFE Banking Act, adding that “it’s no secret that I too was opposed to marijuana legalization in Colorado. But the people of Colorado chose to try a new approach to legal cannabis, and the sky is not falling.”
Gardner added that seven years after the the state legalized, most states in the country have legalized some form of legal cannabis.
“Every day that Congress continues to ignore reality, unintended negative consequences pile up for legitimate businesses – both in the cannabis industry and outside it. The conflicting federal and state marijuana laws are an impediment to needed relief for those with serious medical issues, and do nothing to help improve law enforcement or transparency in the industry,” Gardner told Cannabis Wire.
Colorado Rep. Ed Perlmutter, an author of the SAFE Banking Act, told Cannabis Wire that he appreciates Crapo’s concerns, but said that”there is an urgent public safety risk facing the majority of communities and Americans today that needs to be resolved,” which he believes the SAFE Banking Act solves. “This issue requires a pragmatic approach that takes into the account the will of voters across the country.”
The American Bankers Association, which recently held a cannabis banking panel during their Financial Crimes Enforcement Conference, said in a statement that while they “respect” Crapo’s request for additional information, “ABA, like many other stakeholders, has already provided the committee relevant information on several of the issues identified by the chairman.” The ABA urged the committee to gather the information needed “in a timely manner,” in order to follow the House lead and pass the SAFE Banking Act, because it will “help protect communities across the country from an increasing public safety threat.”
The Senate Banking Committee held a hearing in July titled, “Challenges for Cannabis and Banking: Outside Perspectives.” In his opening remarks during this hearing, Crapo, the Idaho Republican who chairs the committee, said that because of fear of retribution from federal authorities, “many banks have stopped providing financial services to members of these lawful industries for no reason other than political pressure, which takes the guise of regulatory and enforcement scrutiny.”
Ohio Democrat Sen. Sherrod Brown emphasized that, “No matter how you feel about marijuana itself… we have a duty to look out for the workers in this industry and the communities they represent.” In concrete terms, Brown argued that forcing workers to “operate in the shadows” not only “puts a robbery target on the backs of workers,” but also adversely affects their socioeconomic stability.
In September, the U.S. House passed the SAFE Banking Act in a 321-103 vote; until then, no standalone cannabis-related bill had received a vote in Congress. Florida Representative Matt Gaetz said during the hearing that he hoped the vote “will build some common sense momentum for real cannabis reform.”
“I know the bill’s not perfect. I expect the bill to get better in the Senate,” Gaetz said.
Crapo is requesting public comment be sent to submissions@banking.senate.gov.
This story was updated at 6:05 p.m. with statement from the American Bankers Association, and at 8 p.m. with comments from Rep. Ed Perlmutter and Sen. Cory Gardner.
