While Legalization Stalls, Some Push For Cannabis Banking Services
Dispensaries and other marijuana industry companies continue to have difficult time getting cannabis banking services. And because federal cannabis legislation appears stalled in the U.S. Senate, at least for the moment, some lawmakers are turning their attention to dealing with weed-related banking issues.
U.S. Rep. Ed Perlmutter, a Democrat from Colorado, recently said the time has come to pass the Secure and Fair Enforcement (SAFE) Banking Act, which provides protections for financial institutions that provide cannabis banking services. He’d prefer going forward with that proposal rather than wait to see if the Senate passes the full legalization bill approved by the House four months ago.
It’s something he’s pushed for since 2013. The bill calls for protecting banks against federal charges for working with marijuana businesses. He told Westword he thinks now might be the time to try to get it approved.
“The Senate is currently pursuing comprehensive cannabis reform legislation, which is important to ensure true social and economic justice is achieved following the War on Drugs,” he said. “However, there is a serious public-safety threat that exists in our communities that we cannot wait to address, which is why SAFE Banking needs to move now.”
More than 30 senators have signed on in support of the bill.
Why Marijuana Banking Changes Are Needed
Most dispensaries continue to deal each day in cash transactions. While there are ways to safeguard transactions, dispensaries want the same access to financial services that other businesses enjoy. However, federally insured banks won’t provide cannabis banking services out of fear they will run afoul of federal law.
While legal for recreational use in 19 states, cannabis remains a Schedule I illegal drug at the federal level. Under that law, banks cannot work with businesses in the marijuana industry without running the risk of facing potential penalties from federal regulators.
Sen. Mitch McConnell, who led the Senate until this year, called such banking protections part of a “multi-trillion dollar left-wing wish list.” But now that they have a slim majority in the Senate, Democrats might have a way of getting it done.
Incremental Change vs. Big Change
The politics involved in all of this is complex, but essentially Democrats now are debating whether to make incremental changes in federal marijuana law now or big ones down the road.
Perlmutter believes that now is the time to protect banks from federal penalties so that they can extend services to cannabis businesses. Dealing with cash has led to big security challenges and, in some cases, dangerous conditions for dispensary workers and customers, Perlmutter said.
He told Westword the SAFE Banking Act is about “protecting employees, patients and customers of small businesses.” But he faces opposition from within his own party.
Senate Majority Leader Chuck Schumer wants to pass a legalization bill, which is currently going through a months-long public comment period. He plans to bring his proposal to the Senate floor for debate soon.
One of co-sponsors on Schumer’s bill, Sen. Cory Booker, has stated he will fight against the idea of bringing any other legislation forward until the full legalization bill is considered.
All this has left cannabis banking services in limbo. Perlmutter said his bill will at least move the ball forward, providing protection for banks and giving both large and small cannabis business owners access to more capital. Whether his bill ever gets to the Senate floor for a vote remains to be seen.