Will COVID-19 legislation be the vehicle for cannabis banking? Maybe.
After trying, and failing, to ensure that cannabis businesses would have access to federal coronavirus aid, advocates have pushed for a different financial shot in the arm, one with implications far beyond the pandemic: banking access.
The House’s new coronavirus bill, known as the HEROES Act, includes the Secure and Fair Enforcement (SAFE) Banking Act, which, in short, would eliminate consequences for banks and other financial institutions that work with cannabis businesses, thus expanding cannabis industry access to financial services.
“The inclusion of the SAFE Banking Act is recognition that cannabis businesses have been classified as essential. Prohibiting these businesses from banking and forcing cash-only transactions in the middle of a global health crisis is irresponsible and wrong,” Oregon Rep. Earl Blumenauer told Cannabis Wire. Blumenauer is also the co-chair of the Congressional Cannabis Caucus.
“We were able to ensure small business owners are no longer disqualified or ineligible for the Paycheck Protection Program solely because of their involvement with the criminal justice system. The passage of the bipartisan SAFE Banking Act will be a huge benefit, not only to the industry but to our communities and public safety.”
Colorado Rep. Ed Perlmutter told Cannabis Wire that he will “continue working to ensure” that the SAFE Banking Act, which has already passed “by an overwhelming majority” in the House, “remains included in the HEROES Act and signed into law.”
“The SAFE Banking Act will help reduce the existing public safety risk posed to cannabis businesses and exacerbated by the COVID-19 crisis and provides some financial relief to the industry by allowing legitimate cannabis businesses access to the banking system,” Perlmutter said.
This legislation has seen more lobbying from within and outside the cannabis industry than any other cannabis related bill, perhaps in history, and the only one ever to get voted out of the House. (Though it has since stalled in the Senate.) As Cannabis Wire has reported, counties and cities across the US, major banks and insurance companies, and even less-than-expected entities like Brinks Security Company and the National Rifle Association, have all chimed in on the bill.
“We strongly support the SAFE Banking Act, and continue to urge lawmakers to resolve the conflict between state and federal law so banks can provide services to cannabis-related businesses in states where it is legal,” Blair Bernstein, spokesperson for the American Bankers Association, told Cannabis Wire.
Since March, cannabis advocates, the cannabis industry, and cannabis-friendly lawmakers have all been pushing to ensure that state-legal cannabis companies could access coronavirus-related federal aid, specifically from the Small Business Administration. As Cannabis Wire reported, efforts ranged from multiple letters sent to lawmakers to the introduction of legislation.
(Read Cannabis Wire’s interview with Oregon Senator Ron Wyden about his efforts around coronavirus-related relief for the cannabis industry.)
Those efforts have been, so far, unsuccessful. Then, on May 8, several cannabis groups, including the Marijuana Policy Project, Minority Cannabis Business Association, National Cannabis Industry Association, National Cannabis Roundtable, National Organization for the Reform of Marijuana Laws, and Policy Center for Public Health and Safety, among others, sent a letter to Congress suggesting that the SAFE Banking Act “or similar language” be included “in the next pandemic relief package.”
Why? “The ability of cash to carry contagions and the personal proximity required by cash transactions.”
On Tuesday, cannabis groups applauded the inclusion of the SAFE, and language preventing denial of SBA loans to those with criminal convictions, while NORML also called out the absence of SBA-related language for the cannabis industry.
“The inclusion of the SAFE Banking Act in the CARES 2 package is a positive development, but one that’s akin to applying a band-aid to a gaping wound,” said NORML Political Director Justin Strekal. “While larger, better capitalized players may be able to weather this storm, smaller cannabis businesses may not be able to do so absent some economic stimulus.”
The full House will now consider the bill. And the cannabis language, as has been the case with previous cannabis legislation, faces a steep climb in the Senate, where Republicans are in control.
“It appears that passing any relief bill in the Senate may be a heavy lift. That being said, stripping this language out of a relief package will likely be a low priority for that chamber,” National Cannabis Industry Association spokesperson Morgan Fox told Cannabis Wire.
“Beyond that, I think we have to watch how the negotiations go and see what the political climate is like at that time.”
This story was updated to include comment from Oregon Representatives Earl Blumenauer and Ed Perlmutter, the American Bankers Association, and the National Cannabis Industry Association.