Thirty U.S. senators attached their names to the Secure And Fair Enforcement (SAFE) Banking Act of 2021, legislation that was reintroduced March 23 in the upper chamber of Congress. Among them, seven Republicans are on board.
Sens. Jeff Merkley (D-OR) and Steve Daines (R-MT) are leading the charge as primary sponsors of the bill, which would create protections for financial institutions that provide services to state-legal cannabis businesses. The Senate version of the bill comes on the heels of SAFE Banking being refiled in the House on March 18, where it carries more than 100 co-sponsors. The lower chamber overwhelmingly passed a standalone version of the bill in 2019, and then House members passed the measure two more times as part of federal coronavirus relief bills in 2020.
None of those previous efforts cleared the Senate, where there now lies new optimism with Democrats taking control of a 50-50 split via Vice President Kamala Harris representing the tiebreaker vote. In the last Congress, the SAFE Banking Act of 2019 had 35 senators signed on for sponsorship, including then-Sen. Harris, but former Majority Leader Mitch McConnell (R-KY) never acted on calendaring it for floor debate.
Many state-legal medicinal or adult-use cannabis businesses are denied access to the banking system because banks fear they may be prosecuted under federal law given the ongoing federal restrictions on cannabis, Merkley said in a press release March 23. The lack of access to bank accounts, credit cards and checks has forced some state-legal cannabis businesses to operate in cash, opening the door to tax evasion and to a dangerous pattern of robberies, including one that resulted in the murder of a store clerk in Portland, Ore., Merkley said.
“No one working in a store or behind a register should have to worry about experiencing a traumatic robbery at any moment,” Merkley said. “That means we can’t keep forcing legal cannabis businesses to operate entirely in cash—a nonsensical rule that is an open invitation to robbery and money laundering. Let’s make 2021 the year that we get this bill signed into law so we can ensure that all legal cannabis businesses have access to the financial services they need to help keep their employees safe.”
Helping motor more than $17.5 billion of legal cannabis sales in the U.S. in 2020, there were 515 banks and 169 credit unions providing services to cannabis-related businesses at the end of last year, according to Financial Crimes Enforcement Network’s (FinCEN) quarterly cannabis banking update. But, like Merkley said, not all cannabis-related businesses have access to those financial institutions, and those financial institutions don’t have guaranteed safe harbor for taking on clients who operate in a sector that is not federally legal.
Providing all state-legal cannabis businesses access to banking services would not only improve community safety, but also make it easier for Americans of color—who have long been disproportionately impacted by America’s war-on-drugs policies and generations of asset-stripping policies and practices—to access the capital necessary to participate in the merging cannabis industry, Merkley said in