Legislation allowing banks to offer credit cards, checking accounts and other financial services to legal cannabis businesses passed the US House on Friday, the sixth time the Democratic-controlled chamber has approved such a measure.
the Secure and Fair Enforcement, or SAFE Banking Act was included in legislation providing federal assistance to help US manufacturers better compete with China. This measure was approved largely along party lines, 222-210.
The Senate previously passed a similar bill on a bipartisan basis, so both houses will try to come up with a final version that Congress can approve.
“Cannabis businesses – large and small – and their employees desperately need access to banking and access to capital in order to operate efficiently and securely and compete in the global cannabis market. growing,” the measurement said. main sponsor, Rep. Ed Perlmutter, D-Colo.
Booker, who is lead efforts in the Senate to end federal cannabis prohibition, opposed efforts to adopt SAFE Banking without also including restorative justice provisions to largely help minority communities and those most hurt by the War on Drugs .
Federally regulated banks have been caught between US law, which bans cannabis, and the laws of dozens of states, including New Jersey, which now allow some cannabis use.
Concerns about who actually benefits
Some cannabis advocates say they support the criminal justice provisions, but would rather see something than nothing. Even a few minority-owned cannabis businesses endorsed SAFE Banking’s move on its own, saying it would allow them to raise the funds they need to compete with well-heeled cannabis companies.
One of Capitol Hill’s strongest advocates has been the US Cannabis Council, a powerful lobbying arm that represents a substantial portion of America’s largest legal cannabis operators.
“The US cannabis industry is growing rapidly and already supports more than 300,000 American jobs,” said Steven Hawkins, CEO of the US Cannabis Council. “Yet the industry is subject to banking restrictions and unprecedented levels of taxation elsewhere in the economy. The SAFE Banking Act would make US cannabis businesses of all sizes more competitive.
Another influential organization, the Cannabis Regulators of Color Coalition (CRCC), a group representing several government officials responsible for overseeing cannabis programs, met with Senate Majority Leader Chuck Schumer alongside other cannabis advocates to push back this story.
The coalition said the bill would do little to help small businesses and would make it easier for big business to control the legal market.
In a discretionary process dealing with markets designated as high-risk, banks are shunning smaller companies and generally continuing to opt for larger companies, said Dasheeda Dawson, cannabis czar of Portland, Oregon and chairwoman of the CRCC.
“Anytime it depends on discretion, banks are mostly risk averse – that the story is clear, that the data is on display, so we expect to only see the benefits go to larger, more capitalized companies and well established, which is actually the opposite of the story they say,” she says.
The SAFE Banking Act may seem like a good idea because it has found people in desperate positions for any sense of relief or perceived progress, Dawson said. Taking advantage of this, without legislative provisions that could ensure that small businesses would not be excluded from an opportunity that some of them are advocating is something she described as akin to predatory behavior.
“It’s selling well because we’re in a crisis,” she said.
Dawson also added that states could help by setting up their own cannabis banking infrastructure and providing emergency relief funds to small cannabis businesses locally.
Many cannabis businesses operate in what are known as limited license states, where the number of licenses that can be applied for in certain cannabis license categories is capped. Companies with access to large amounts of capital have dominated these markets.
New Jersey is one such market.
If large cannabis companies in markets that have already been built on oligopolistic structures gain more power, it could widen the disparity, a factor worth acknowledging, Dawson said.
“That’s exactly what we hope will happen,” Dawson said, assuming banks would open up to small businesses and people of color. “Everybody wants to have hope, we all really want to believe in hope, it’s something that’s easy to get people to buy into. I also think it’s important for us to rally us to the truth.
“Call everyone back and say ‘hey here’s what’s really going on and here are some of the real solutions that will bring relief’, (they) will be very upset if this passes and we’re still suffering from the same issues.”
What’s on the horizon
Perlmutter said conversations are ongoing with Booker’s aides. While there may not yet be votes for comprehensive cannabis legislation, he said there were at least 60 votes in the Senate to pass SAFE Banking.
If the Senate does not accept the provision this time around, Perlmutter said he would introduce the bill again and again as amendments to other laws.
“I’m determined to put it on everything I can,” he said. “I hope the Senate sees this as inevitable.”
For the bill to have a chance of receiving coalition support, Dawson said the bill would need to include provisions that could secure opportunities for small businesses that would normally be overlooked under the discretionary process, measures that would protect against interests that dominate or monopolize the markets.
Booker also reiterated his support for more comprehensive measures.
“I was hoping that the side of the industry that backs SAFE Bank, the companies that are now creating hundreds of millions, if not billions of dollars in profits, and this is important to them, use your power to help us make sure we get the restorative justice provisions as part of that,” he said.