Marijuana banking challenges came under the spotlight during a Senate Committee on Banking, Housing, and Urban Affairs hearing on Thursday.
The hearing, Examining Cannabis Banking Challenges of Small Business and Workers, focused largely on the Secure and Fair Enforcement (SAFE) Banking Act, a bill refiled last month that would remove penalties for financial institutions providing services to legitimate cannabis businesses.
Among those who testified before the committee were Senators Jeff Merkley (D-OR) and Steve Daines (R-MT) who refiled the SAFE Banking Act last month, and representatives from the United Food and Commercial Workers (UFCW) International Union, Dama Financial, Smart Approaches to Marijuana (SAM), and the Cannabis Regulators of Color Coalition.
Senator Merkley argued that the SAFE Banking Act would ensure that legitimate cannabis businesses, operating in compliance with state cannabis laws in those states where citizens have said they want legal and medical cannabis, would have access to all of the same financial services as every other business.
He highlighted that the latest version of the act would provide safe harbor to Community Development Financial Institutions and Minority Depositary Institutions and that it also addressed concerns around equity and issues around law enforcement and money laundering raised by the Department of Justice last year.
“It is beyond unacceptable that, with more than half the country embracing some form of legalized cannabis, we would continue to allow this dangerous and untenable situation of forcing legitimate business to operate entirely in cash here in the 21st century,” Senator Merkley said in prepared remarks.
Senator Daines, who noted in his statement that the bill does not legalize marijuana and that he is opposed to the federal legalization of marijuana, said: “Allowing cash from legal, regulated businesses to enter the banking system will help law enforcement more easily distinguish legitimate actors and focus more of their resources on prosecuting the illicit market, and in so doing, may actually shrink the size of the overall industry and reduce consumption in the United States.”
He continued: “If nothing else, SAFE Banking will greatly increase tax compliance and tax revenue for states.”
Cannabis workers deserve access to traditional financial services, union says
UFCW director of legislative and political action Ademola Oyefeso told the committee that Congress should support safe, legal banking for cannabis workers.
“UFCW cannabis workers have said that access to traditional banks and payroll services can help significantly improve their lives by increasing financial stability, providing more and convenient secure payment processing which leads to safe working conditions and benefits,” Oyefeso said in prepared remarks.
“Cannabis workers do not deserve to be treated as criminals and should not have to struggle with financial and legal ambiguity while on the job.”
Marijuana banking issues ‘a fake problem,’ committee hears
The committee also heard testimony against the SAFE Banking Act from SAM representative Kevin Sabet.
Sabet argued that the bill “purports to fix a fake problem,” suggested it could potentially increase cartel activity, and raised concerns about its possible impact on the US addiction crisis.
“The so-called SAFE Banking Act, which should be called the Addiction Banking Act, will allow the expansion of an industry pushing new, exponentially more powerful derivatives of marijuana before any of its health or other societal impacts are fully understood,” he said in prepared remarks.
The numerous testimonies in favor of the SAFE Banking Act weren’t enough to push cannabis stocks higher on Thursday, with the Advisorshares Pure US Cannabis ETF down 8.7% at US$5.28 and the Advisorshares Pure Cannabis ETF down 5.3% at US$2.75 at the market close.
Contact the author at emily.jarvie@proactiveinvestors.com
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