The effort to provide the cannabis industry with banking access heads to the U.S. Senate for the sixth time after again passing the House.
The SAFE Banking Act would create a loophole allowing financial institutions to work freely with state-legal cannabis businesses to provide them financial services despite the fact they’re selling Schedule 1 narcotics. It will start with basic stuff like legit credit card processing and bank accounts. It then would quickly spiral into all things capitalism.
For 2022, the bill language was attached as an amendment to the COMPETES Act by Rep. Ed Perlmutter (D-CO).
The SAFE Banking Act also is a lightning rod topic in the expanding cannabis social equity movement that works to give the communities disproportionately hit the hardest by the war on drugs the best shot in the industry possible. Many believe it should be kept as a bargaining chip in the national legalization discussion, among them Sen. Cory Booker.
When the bill’s language made it to the senate in 2019, Booker noted, “we can both address the pressing need for cannabis businesses to access financial institutions and provide real restorative justice for those most harmed by the failed War on Drugs. It’s simply not enough as it stands without reinvestment in communities most hurt by the failed drug war and while people of color are left to languish in federal prisons for marijuana-related offenses.”
At the time, Booker said the end he and fellow advocates were seeking is not just legalization or access to financial institutions, it’s justice.
The counter argument to that is the Black-owned California cannabis companies on the best footing to take the biggest chunk of the pie already are open and under capitalized compared to their competition. The idea is, those companies getting access to banking services as soon as possible could mean the biggest slice of pie for equity once interstate trade opens up and most production moves back west of the Sierra Nevada.
Then there’s the compounding factor of wider discrimination in the financial space outside weed and whether it negates that. As California cannabis entrepreneur/advocate Amber Senter noted to us last fall, the best case scenario for California businesses, hers among them, is rooted in the ideas social equity operators won’t face discrimination if they were to get access. The data certainly backs her take. Forbes noted last year businesses with Black or Latino owners were less than half as likely to be approved as whites.
So there are a lot of different well-intentioned perspectives people are approaching banking and equity from.
Senate Minority Leader Mitch McConnell called the language being included in the COMPETES act a poison pill.
“Their bill even goes out of the way to include provisions on, listen to this, marijuana banking,” McConnell told the Senate Chamber on Monday. “China has been steadily building up its military and economic might, and the Democrats’ answer is to help Americans get high.”
The nation’s oldest cannabis advocacy group NORML noted a Whitney Economics survey of 396 licensed cannabis companies. Over 70% called a “lack of access to banking or investment capital” their top business challenge.
““It is imperative for the interests of public safety, transparency, and the economic viability of small cannabis businesses that this legislation is approved as soon as possible,” said NORML Political Director Morgan Fox.
Fox argued the fact that the people’s chamber has approved this measure in various forms so many times is a clear indicator of where voters stand on this issue.
“Continued inaction by the Senate on this popular bipartisan reform puts workers and customers at risk of violence, makes it harder for regulators to accurately track cannabis revenue, and perpetuates the high costs and lack of access to capital that are increasingly widening the gap between large and small businesses in the cannabis space when it comes to their chances to succeed,” Fox said. “The Senate should ensure this provision remains in the final version of this funding package and approve it swiftly.”
Toi Hutchinson, president and CEO at the Marijuana Policy Project, also weighed in.
“I am pleased that the U.S. House of Representatives saw fit to include and pass the provisions of the SAFE Banking Act in the America COMPETES Act. Today’s vote was a positive step in the right direction,” Hutchinson said in a statement. “A lack of access to banking is a constant obstacle for state-legal cannabis businesses across the country and hinders social equity efforts. The reality is that states are going to continue to move forward with legalizing cannabis. We at the Marijuana Policy Project are delighted that Congress is beginning to recognize that they can no longer ignore this issue.”
Should this effort crash and burn, it sounds like the next opportunity to make something happen is Senate Majority Leader Chuck Schumer’s legalization plan said to be dropping in April.