Distributing cannabis-selling licenses to meet goals related to equity concerns has merit. But safety should be the public policy priority.
The increase in violent crime sweeping through cities and communities across the nation puts a premium on passing new laws to address this troubling trend. Focusing on prosecutions is one way to attack the problem. Another is passing common-sense measures to end incentives and opportunities to commit violent crime in the first place.
Unfortunately, our archaic banking laws do just that. They have turned employees of America’s booming state-licensed cannabis industry into sitting ducks for violent, armed criminals. Cannabis dispensaries are cash-only, making them a prime target for armed robberies. I made these points during a recent New York Association of Towns meeting about how best to implement New York’s cannabis laws.
Unless Congress votes to end the ridiculous laws that force cannabis purveyors to do business only with cash, the same type of violent crimes occurring in Washington state, California and elsewhere will surely happen in New York. Indeed, a March 22 Seattle Times editorial succinctly notes, “No one should have to die over an obsolete federal law.”
Federal banking laws prevent most cannabis businesses from accessing and benefitting from the traditional banking services — such as credit cards — which other businesses take for granted. Financial transactions involving funds derived from manufacturing, distributing, or selling cannabis are prohibited under federal law.
A confusing patchwork of federal and state cannabis laws is to blame. They have conspired to isolate cannabis dispensaries, placing them outside the financial mainstream of America, and leaving them vulnerable, virtually advertising to violent criminals that their shops are stocked with cash. The status quo cannot continue. Lives are at risk.
To protect the safety of employees, to bring America’s banking laws into the 21st century, and to once and for all move the regulated cannabis industry out of the shadows, Congress should move swiftly to pass the bipartisan Secure and Fair Enforcement (SAFE) Banking Act of 2021.
The legislation, sponsored by Sens. Jeff Merkley, D-Ore., and Steve Daines, R-Mont., and backed by the American Banking Association, the U.S. Cannabis Council, and the National Cannabis Industry Alliance, would finally permit banks to serve cannabis-related commerce in the states where it is legal. This would significantly reduce the amount of cash that cannabis businesses are forced to keep on hand, deterring criminals and improving workplace safety.
The SAFE Banking Act also would require federal banking regulators to provide uniform guidelines for cannabis-related business accounts. Depository institutions would be protected from civil and criminal sanctions for providing financial services to legitimate, cannabis-related firms.
The collective impact would be to fully integrate state and federal laws. In so doing, the SAFE Banking Act would be a commercial and local economic game-changer because it would help legally operating, cannabis-related businesses raise capital, grow their services, and collect more revenue for state priorities such as education. Financial institutions would benefit as well, because they would finally have the legal standing to develop new revenue streams and loan opportunities.
Congress should pass the SAFE Banking Act to foster a stable, well-regulated, and safer cannabis industry. The U.S. House of Representatives has acted. Now it is time for Sen. Charles Schumer and the U.S. Senate to deliver for New Yorkers to keep them safe.
This would bring uniformity and make sense of federal and state banking laws. It would also deter criminals from going where the cash is — cannabis dispensaries. Today, thousands of cannabis-related businesses across the country are easy marks for violence. With the passage of one law, that can change.
Stanley L. Garnett of Boulder, Colo., is a partner at Brownstein Hyatt Farber Schreck in Denver and a former district attorney for Boulder County.
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