The House Financial Services Committee is on its way to making marijuana history. By a vote of 45 in favor, 15 opposed, the Committee approved a bipartisan bill that would allow state-licensed cannabis businesses to access banking and financial services.
The March 28 hearing marked the first time a bill pertaining to pot-banking was approved by a congressional committee.
HR 1595, also known as the Secure and Fair Enforcement Banking Act, was introduced by Rep. Ed Perlmutter in early March. Thus far, the bill has received bipartisan support and boasts 108 original cosponsors. It has 152 total cosponsors in the House — more than one-third of the House of Representatives.
The SAFE Banking Act would allow financial institutions to provide services to licensed marijuana businesses without having to fear interference from federal regulators. While some cannabis businesses have been able to find banking services, most banks are unwilling to deal with the cannabis cash-only businesses for fear of federal prosecution.
“Many cannabis-related businesses are currently unable to get bank accounts and must operate entirely in cash, making them, their employees, and their customers, potential targets for crime,” Executive Director Steve Hawkins of the Marijuana Policy Project said in a statement.
“Cannabis companies that are operating in full compliance with state and local laws should have the same ability to access banking services as any other legal business,” Hawkins concluded.
Congressman’s pro-cannabis stance
Perlmutter argued that safe banking policies support local businesses and enforce the will of the people.
“It is our job to address this and no longer ignore it," Perlmutter said prior to the Committee vote. "I have brought this legislation up for six years. The people of this country sort of took it into their own hands, state-by-state, to pass initiative for medical marijuana, or for cannabis oil, or fully legal.”
As marijuana is still classified as a Schedule I drug, financial service businesses often don’t partner with cannabis businesses, regardless of whether they are licensed and approved by the state. The main reason being that a bank could potentially be charged with federal racketeering or trafficking.
The SAFE Banking Act, if passed, would allow financial institutions to partner with pot businesses, as well as cannabis-auxiliary businesses such as real estate owners who rent to cannabis growers, accountants who manage marijuana business' books, and other such vendors.
“The SAFE Banking Act is about public safety, accountability, and respecting states’ rights," Perlmutter said in a statement. "Our federal banking laws were designed to prevent illicit activity and help law enforcement do their jobs. These laws need to be applied to legitimate marijuana businesses and employees in order to improve transparency and accountability and help root out illegal transactions.”
“Most importantly, the SAFE Banking Act will get cash off our streets, reducing the risk of violent crime and making our communities safer. While Congress has stuck its head in the sand for many years, this Committee has shown leadership on this issue, and I want to thank my cosponsors and members of the Committee for their support,” Perlmutter concluded.
Prior to the Committee vote to move the bill to the House floor, Perlmutter added an amendment to his bill which was adopted by the Committee via voice vote. The amendments provided a clarifying definition of the financial services that are protected by the bill, including services provided by Federal Reserve Banks.
Additionally, Perlmutter added that, if the bill is passed as amended, the federal government would be required to conduct a study on diversity and inclusion in the marijuana industry.
Marijuana is making moves in the legislature
According to Perlmutter’s statement on the committee vote result, a companion bill to the SAFE Act is expected to be introduced to the U.S. Senate in the next few weeks.
Representative Diana DeGette, a proud supporter of Colorado's cannabis industry, is a co-sponsor of the SAFE Banking Act, and is planning to introduce a bill which would block the federal government from enforcing anti-marijuana laws in states that have legalized it.
Additionally, Sens. Jeff Merkley and Cory Gardner will follow suit in the Senate, introducing legislation to address protection for banks serving marijuana businesses. A bill on this issue had been introduced in the last Congress, having gained 20 cosponsors. However, it never made it to a vote.
With the large amount of registered support for HR 1595, pot politicos can hope to see this bill survive for a similar hearing process in the Senate. Hawkins from the MPP says that voters and lawmakers alike cannot overstate the importance of this bill’s survival.
“This is an historic and critical step forward for the nation’s burgeoning cannabis industry. Lawmakers seem to recognize the urgency and public safety implications of ensuring cannabis businesses can access banking services.
“Regardless of where members stand on legalization, they can agree that it is in the public interest to make banking available to cannabis businesses in states where it is legal. We hope the full House will follow the committee’s recommendation and advance this important legislation,” Hawkins concluded.