Search Results for: SAFE Banking

SAFE Banking Act Reintroduced as Momentum for Cannabis Reform Continues to Grow

Landmark, bipartisan legislation passed U.S. House multiple times in last two years

DISTRICT OF COLUMBIA: U.S. Rep. Ed Perlmutter (CO-07) reintroduced his landmark legislation to reform federal cannabis laws and reduce the public safety risk in communities across the country. The bipartisan Secure and Fair Enforcement (SAFE) Banking Act of 2021 – authored by Perlmutter and sponsored by Reps. Nydia M. Velázquez (D-NY-07), Steve Stivers (R-OH-15), and Warren Davidson (R-OH-08) and cosponsored by more than 100 members – would allow marijuana-related businesses in states with some form of legalized marijuana and strict regulatory structures to access the banking system. The SAFE Banking Act is seen as the first of many cannabis reforms Congress needs to address.

Forty-seven states, four U.S. territories, and the District of Columbia – representing 97.7 % of the U.S. population – have legalized some form of recreational or medical marijuana, including CBD. Yet current law restricts legitimate licensed marijuana businesses from accessing banking services and products, such as depository and checking accounts, resulting in businesses operating in all cash. This is a serious public safety risk for our communities, inviting theft, robberies, burglaries, or worse, as Colorado saw with the murder of Travis Mason in June 2016 and Michael Arthur in Portland, Oregon in December 2020.

“The genie is out of the bottle and has been for many years. Thousands of employees and businesses across this country have been forced to deal in piles of cash for far too long, and it is the responsibility of Congress to step up and take action to align federal and state laws for the safety of our constituents and communities. The public safety need is urgent, and a public health and economic need has also emerged with the pandemic further exacerbating the cash-only problem for the industry,” said Congressman Perlmutter. “In many states, the industry was deemed essential yet forced to continue to operate in all cash, adding a significant public health risk for businesses and their workers. As we begin our economic recovery, allowing cannabis businesses to access the banking system would also mean an influx of cash into the economy and the opportunity to create good-paying jobs. Thank you to Reps. Velázquez, Stivers and Davidson for their continued support and input on the bill, and I look forward to working with Senators Merkley and Daines to get the SAFE Banking Act passed in the Senate and signed into law.”

“The cannabis industry has been operating with great success, with many of these businesses deemed essential as the coronavirus pandemic took hold,” said Congresswoman Velázquez. “However, without the ability to safely utilize the banking system, cannabis-related businesses are left behind and stuck resorting to tactics that can threaten public safety and economic success. That’s why I am proud to join to Reps. Perlmutter, Stivers, and Davidson in introducing the SAFE Banking Act, to allow these business in states that have legalized cannabis to access to the banking system, just as any other business currently enjoys. Doing so will help create jobs in communities throughout America, while stimulating the economy as we recover from the fallout of the pandemic.”

“We have a responsibility to legislate for the reality we live in, and the reality is that legal businesses in thirty-three states, including Ohio, are being denied access to the banking system and forced to assume huge risks as a result of operating solely in cash,” Congressman Stivers said. “The SAFE Banking Act is about keeping people safe, something that 321 of my colleagues recognized last year. I look forward to seeing this bill make it all the way to the President’s desk this Congress.”

“I’m excited we’re reintroducing SAFE Banking, again with bipartisan support. This bill is an important hedge against financial cancellation, and it will protect businesses and industries that find themselves out of favor with the latest trends of the day,” said Congressman Davidson. “Today we’re talking about banking cannabis, hemp, and firearms, but tomorrow there could be another industry that has its access to the banking system threatened by statute or by public opinion. With SAFE Banking, as long as its legal in the jurisdiction, no bank should be compelled to cancel their customers by a mob saying, ‘You aren’t going to bank THOSE people are you?’ Sadly, that has already happened too often in American history and it must end.”

“No one working in a store or behind a register should have to worry about experiencing a traumatic robbery at any moment. 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,” said Senator Merkley (D-OR). “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.”

“The ‘SAFE Banking Act’ will help Montana small businesses, create jobs, boost local economies, and improve public safety,” stated Senator Daines (R-MT). “I’m glad to be working on this bipartisan legislation to provide certainty for small businesses in Montana. Montana business owners should have the ability to freely use banks, credit unions and other financial institutions without the fear of punishment.”

In the 116th Congress, 206 members cosponsored the SAFE Banking Act and it passed the U.S. House in a broad bipartisan vote of 321 to 103, with 91 Republicans and one Independent voting in support. The bill also passed as part of the Heroes Act, an earlier COVID relief package which was approved by the House on two separate occasions. In February 2019, the SAFE Banking Act prompted the first-ever congressional hearing on the issue of cannabis banking.

The SAFE Banking Act provides protections from money laundering laws for any proceeds derived from these state-legal marijuana businesses. This will get cash off the streets and into the financial system which is built to root out fraud and illicit activity. This bill also includes protections for hemp and hemp-derived CBD related businesses, which still struggle in accessing financial services despite the legalization of hemp in the 2018 Farm Bill. The current version of the bill has been updated slightly to include minor technical changes to the safe harbor, strengthened hemp provisions, and other technical updates.

The U.S. cannabis industry continues to grow at a rapid rate, with the current value estimated at $17.7 billion, a substantial amount of which remains unbanked. As of January 2021, the legal cannabis industry supports 321,000 jobs across the country. Over the 2018-2028 period, job growth in this market is projected to climb 250%, the fastest rate for any sector in the U.S. Bringing in this cash will make the industry safer and give banks and credit unions more capital to lend during the economic recovery as a result of the COVID-19 pandemic.

Cresco Labs Comments On The Passage Of The Safe Banking Act In The U.S. House Of Representatives

ILLINOIS:  Cresco Labs, one of the largest vertically integrated multi-state cannabis operators in the United States, today provided comments on the passage of the Secure and Fair Enforcement Banking Act of 2019 (“SAFE Banking Act.”)

“The passage of the SAFE Banking Act by the U.S. House of Representatives represents a significant first step in the effort to provide stability and security to the multibillion-dollar cannabis industry,” said Cresco Labs CEO and Co-founder Charlie Bachtell.

“By allowing cannabis companies to access commercial banking services and end their reliance on cash, the SAFE Banking Act would facilitate a safer operating environment for all stakeholders. We continue to see extremely encouraging progress made from a legislative standpoint at both the federal and state levels that is contributing to the normalization of the cannabis industry. The passage of the SAFE Banking Act will also provide access to banking and capital to fuel diversity and make the cannabis industry more inclusive for everyone. The bipartisan support shown in passing the SAFE Banking Act through the House demonstrates the clear merits of this legislation, and we look forward to similar support being shown as the bill moves to the Senate.”

House Financial Services Committee Passes SAFE Banking Act

DISTRICT OF COLUMBIA: Today, the House Financial Services Committee voted 45 to 15 to pass H.R. 1595, the Secure and Fair Enforcement (SAFE) Banking Act of 2019. Authored by U.S. Reps. Ed Perlmutter (D-CO-07) and Denny Heck (D-WA-10) and cosponsored by Reps. Warren Davidson (R-OH-08) and Steve Stivers (R-OH-15). The bill allows marijuana-related businesses in states with existing regulatory structures to access the banking system.

Today, voters in 47 states plus the District of Columbia – 97.7 percent of the population – have legalized some form of adult recreational and medical marijuana, including cannabidiol. Today’s vote marks a significant milestone considering Congress has failed to act on this issue since similar legislation was first introduced in 2013.

Cannabis is currently considered illegal under the federal Controlled Substances Act therefore financial institutions providing banking services to legitimate and licensed marijuana businesses are subject to criminal prosecution. Since state and federal law are not aligned on the issue, legal and legitimate businesses are forced to operate on a cash-only basis creating a serious public safety risk for employees, businesses and communities, as well as providing an opportunity for tax evasion, money laundering and other white-collar crimes. The SAFE Banking Act is seen as the first of many cannabis reform measures.

With 152 cosponsors at the time of the committee vote – over a third of the entire House – the bill will next move to the floor of the House. A Senate companion bill is also expected to be introduced in the coming weeks. The bill’s sponsors applauded the committee vote and reiterated the need to continue to advance the legislation.

“The SAFE Banking Act is about public safety, accountability and respecting states’ rights. 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,” said Perlmutter. “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.”

“With this vote, the Financial Services Committee took a stand for public safety and transparency. The SAFE Banking Act will enhance public safety by giving those operating legitimate marijuana establishments access to banking services available to other industries,” said Heck. “These businesses will no longer need to deal exclusively in cash. The SAFE Banking Act will help ensure the fair treatment of those who work for or do business with a legitimate marijuana business. Finally, the SAFE Banking Act will make the marijuana industry more transparent and accountable by ensuring compliance with current regulations and norms.”

“Today’s markup allowed for input from both sides of the aisle that ultimately made the SAFE Banking Act a stronger bill, including my amendment to give safe harbor to insurers, and I look forward to working with Representative Perlmutter to continue improving it as it moves through the legislative process,” Stivers said. “This isn’t a bill about condoning marijuana use, it’s about ensuring businesses are not forced to operate in cash and open themselves up to risk, and I believe the improvements made today reflect that goal.  Again, I want to thank Mr. Perlmutter, as well as Mr. Heck and Mr. Davidson for their leadership on this issue.”

“Government regulators have deemed cannabis business owners to have certain reputational risks. From a civil liberties standpoint, we need to move away from this. Allowing these businesses access to the safety of our American financial institutions minimizes risk for owners and enhances our national security. I thank my colleagues for their work on this critical legislation,” said Davidson.

A draft version of the SAFE Banking Act was discussed during the first-ever congressional hearing about cannabis banking on February 13, 2019. Compared to previous iterations of the bill, the SAFE Banking Act of 2019 adds protection for ancillary businesses like real estate owners, accountants, and other vendors from money laundering and other laws as well as adjusts the tribal language and the definition of “cannabis-related legitimate business.” The final version of H.R. 1595 voted on in Committee also includes two provisions aimed at expanding access to financial services for minority-owned and women-owned cannabis-related businesses.

H.R. 1595 has the support of the American Bankers Association, Credit Union National Association, Independent Community Bankers of America, the Electronic Transactions Association, the National Cannabis Industry Association, Mid-Size Bank Coalition of America, The Real Estate Roundtable, and various U.S. trade associations such as American Land Title and American Property Casualty Insurance Association, among others.

Dama Financial Introduces Smart Safe Solution

CALIFORNIA: Dama Financial, the nation’s largest provider of access to banking and financial services for the cannabis industry, has added Dama Smart Safe to its business toolkit.

Smart safes allow business owners to authenticate and monitor their cash at every step of the handling process. With rapid advancements in counterfeit technology, the detection of fake currency with the naked eye has become nearly impossible. Smart safes are equipped with bill validators that significantly decrease the risk of fraud. At the same time, the cash is reconciled automatically, eliminating the need to spend hours doing it manually. 

With Dama Smart Safe, the safe can promptly record any deposit as a credit to the customer’s Premier Business account, providing access to the money the next business day. Dama Smart Safes can be configured to meet the needs of any size operation.

“Cannabis businesses deserve solutions that solve real problems.” said Anh Hatzopoulos, Dama co-founder and chief executive officer. “Between human error and the risk of theft, handling cash has become one of the more difficult processes for any business to manage, so we’re proud to roll out Dama Smart Safe to help cannabis operators improve both efficiency and public safety.”

Comments from Dama Smart Safe customers:

“We love the quick access to funds. It’s like having a bank teller inside our store twenty-four hours a day to accept our deposits,” said Kaz Ajir, co-founder of Grupo Flor, which owns the dispensary East of Eden.

“Dama’s Smart Safe Solution saves our operation hours every single day,” said Monica Gray, chief operating officer of Nice Guys Delivery.

Dama’s other offerings include access to Premier Banking (FDIC-insured accounts), credit, cash management, and merchant services.

Congressman Blumenauer Lauds House Passage of Federal Legislation to Give Cannabis Businesses Access to Banking Services

Under SAFE Banking Act, cannabis businesses would not have to operate in cash, which has made Portland-area stores and workers a target for violent robberies.

DISTRICT OF COLUMBIA: On April 19th, 2021 the U.S. House of Representatives passed federal legislation to provide legitimate cannabis businesses access to banking services, an issue that has long been championed by U.S. Rep. Earl Blumenauer (D-OR), founder and co-chair of the Congressional Cannabis Caucus. The bipartisan passage of the Secure And Fair Enforcement (SAFE) Banking Act in the 117th Congress comes as Portland-area cannabis businesses and their workers continue to be targeted with violent robberies that have been linked to a system that forces cannabis businesses to deal almost exclusively in cash.

“Cannabis will soon be a $20 billion industry and is overwhelmingly supported by the American public. The insane prohibition on banking services serves no one’s interest, except for money launderers, tax evaders, or those who are going to rob these cash-rich businesses,” Blumenauer said. “As we continue to push forward with full legalization, addressing this irrational, unfair, and unsafe denial of banking services to state-legal cannabis businesses is a top priority. This is a critical element of reform that can’t wait, and I urge our cannabis champions in the Senate to take up this legislation as soon as possible.”

Under the federal prohibition on cannabis, banks and credit unions are currently prohibited from serving cannabis businesses, even with financial products as simple as savings accounts or payroll checks. Notwithstanding the financial and practical hardships facing legal cannabis businesses, forcing these businesses to operate on a cash-only basis creates a public safety risk and makes tracking revenue more difficult for tax purposes.

The cash-only nature of cannabis businesses also makes them easy and frequent targets for robberies, which puts workers at risk. According to a March 2021 report by Willamette Week, in the preceding 10 months, Portland cannabis shops were robbed, burglarized, or looted 95 times – often at gunpoint – resulting in one tragic fatality.

The legislation passed in the House would prohibit federal regulators from taking punitive measures against depository institutions that provide banking services to legitimate cannabis-related businesses and ancillary businesses like the electricians, plumbers, and the landlords that serve them. The SAFE Banking Act also requires a GAO study and annual regulator reports to Congress to ensure equal access to credit and to reduce barriers to marketplace entry for potential and existing minority- and women-owned cannabis-related businesses.

Full text of the SAFE Banking Act can be found here.

Dama Financial, Leading Provider of Access to Banking & Financial Solutions for Cannabis Businesses, Announces Completion of $12.6 Million Growth Equity Raise

Dama will leverage the new round of investment to accelerate its already impressive growth, continue to address the lack of financial service products being offered to the cannabis industry, recruit top talent, and scale the business with the backing and support of its investors.

CALIFORNIA: Dama Financial, the premier provider of access to banking and payment solutions through its FDIC-insured banking partners for the rapidly growing legal cannabis industry, today announced the completion of its $12.6 million Series B funding round, bringing Dama’s total funding to approximately $24 million to date. The round was led by a group of strategic new investors.  Currently serving over 7% of the legal cannabis businesses in California, operational in 12 states and with over 50,000 consumers with digital wallets in the United States, Dama has processed over $2 billion in transaction value since inception.

“In one of the fastest-growing industries in the world, Dama is bringing desperately needed financial services to businesses and consumers alike that are safe, secure, compliant and efficient,” said Anh Hatzopoulos, CEO and Co-founder at Dama. “We have spent four years building a platform to enable safe, compliant financial services for cannabis businesses and now is the time to take Dama to the next level.”

“Dama has brought together the right team and technology that will position them as a clear payment solutions leader in the cannabis industry for years to come,” said Dan Englander, of Ursula Investors. “Dama continues to innovate solutions for the serious payments problems faced by the industry and we are excited to see that accelerate. ”

Since November 2020, six new states have passed legalization measures for cannabis and a record-high percentage of Americans now support legalization. The cannabis industry is one of the fastest-growing in the world with the global cannabis market expected to hit $47 billion and U.S. sales of legal cannabis expected to quintuple by 2025. According to Arcview Research, legal cannabis sales in 2019 grew by 46% to $14.8 billion, which represents the highest annual rate of growth to date. Dama’s payment solutions solve complicated banking problems for cannabis dispensaries and facilitate seamless consumer transaction at mobile points of sale.

U.S. House Of Representatives Approves Cannabis Banking Reform In Larger COVID-19 Relief Package

Lawmakers voted 208-199 (23 not voting) in favor of coronavirus “HEROES” relief package

DISTRICT OF COLUMBIA: On Friday evening (5/15/20) lawmakers in the United States House of Representatives passed additional coronavirus relief legislation to provide continued economic and government support to the country. The Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act includes the language of the SAFE Banking Act, which would prevent federal financial regulators from punishing financial institutions that provide services to state-legal cannabis businesses.

Since the onset of the COVID-19 pandemic, cannabis businesses across the country have been deemed essential and continue to operate. However, many of these businesses still lack access to the same financial services that are granted to every other industry in the United States. Because it is possible that coronavirus can be transmitted on currency — placing private industry and government workers at risk when handling large amounts of cash — allowing the cannabis industry to access banking services is now more crucial than ever. This policy change would also ensure that small and minority-owned businesses can access the financial assistance designed for them in many state programs.

The HEROES Act, which includes provisions to allow banks and financial institutions to provide services to the cannabis industry without fear of criminal prosecution, will now head to the Senate for consideration. In September 2019, the House of Representatives voted in favor of the SAFE Banking Act, but the legislation has since stalled in the Senate.

Statement from Steve Hawkins, executive director at the Marijuana Policy Project:
“I’m encouraged that the House recognizes the urgency of this issue and has taken this strong and necessary position. We thank Chairwoman Maxine Waters and Rep. Ed Perlmutter for their leadership on the issue.

“Continuing to exclude the cannabis industry from accessing basic and essential financial services during this time will result in more harm than good. Not only will it make the country’s economic recovery that much harder, but the provisions intended to help minority-owned businesses would continue to be absent within the industry.”

Statement from Don Murphy, director of federal policies at the Marijuana Policy Project:
“In light of the public health and public safety benefits of this specific change in policy, the Senate has good reason to pass this language into law. This is a change in policy that the banks are asking for even more than the cannabis companies. We urge the Senate Banking Committee to adopt the SAFE Banking provisions to ensure financial institutions can provide basic banking services to businesses that are compliant with state law.”

Read more

CannaScore Wins Banking Appeal – Has Account Fully Restored

COLORADO: CannaScore announced it is has been successful in its appeal, and its banking privileges have been restored. As reported here on MJ News Network last month, the company had certain banking privileges revoked when its financial services provider discovered the company was providing services to the marijuana industry. During the appeal, the company offered its products free of charge.

“Although we have full banking access again, we are still giving all customers a free trial of our award-winning cloud-based software,” said Thomas Smith, Managing Partner.

The CannaScore system audits compliance with a wide range of regulations governing the cannabis industry, including licensing, security, personnel safety, food handling, pesticides, and chemical exposure.

Legal cannabis growers, producer/processors, and retailers can use the system to identify areas of non-compliance before problems occur, and provide assurance that they are adhering to the myriad of state and local regulations. Failure to comply with regulations can often result in fines, shutdowns, license revocation and even prison.

Additionally, banks, insurance firms, accountants and real estate developers can use CannaScore as a tool to ensure that their clients operating in the cannabis sector are in compliance as mandated in the Cole Memo and finCEN Guidance.

CannaScore is easy to use, and quickly analyzes compliance that exceeds state parameters. The system also produces a score, which is useful for anyone in the cannabis industry, including consumers, to quickly evaluate the quality of an organization.

“Companies that score high may be more likely to attract funding, obtain favorable rates, demonstrate reliability to landlords, and even attract new customers,” Smith said.

Cannabis Business Summit Takes Debate Over Pot Edibles Safety Seriously

COLORADO:  Between the hotel room antics of Maureen Dowd and a tragic pot-related tourist death and a fatal earlier this year, marijuana’s national image has taken some heavy hits recently. All of those incidents involved edibles — and like members of any industry, marijuana salespeople (medical and adult-use alike) are concerned about the effect this could have on the potential future viability of their businesses.

But unlike other industries, the marijuana businesspeople in Colorado are hyper-aware that their fortunes could turn on a legal or political dime at any moment. And judging from some of the new products and in-depth discussion at the ongoing Cannabis Business Summit at the Colorado Convention Center, some thoughtful and serious steps are being taken to mitigate the damage done to pot’s reputation.

During a morning panel about successes and challenges here and in Washington, Andrew Freedman, the director of marijuana coordination for Governor John Hickenlooper‘s office, noted that an edibles task force (and a solution to the banking issues that dispensaries face) are priorities for his office. And in a question-and-answer session after the discussion, more than one authority on stage acknowledged that if the nationwide trend toward marijuana legalization can be reversed at this point, the turning point could hinge on edibles. After all, on top of being associated with such high-profile incidents as Dowd’s edible nightmare and two deaths, they’re also perceived to be inherently appealing to children.

Banking Marijuana Requires “Act Of Congress”

DISTRICT OF COLUMBIA:  Despite bankers’ varied attitudes about legalizing marijuana, now that it is legal in Colorado, banks are supportive of government efforts to permit financial services for marijuana businesses. However, numerous obstacles prevent banks from serving marijuana businesses and their customers as they conduct legal activities.

Colorado can’t regulate or tax an industry for which it cannot track money. Public safety risks associated with cash-heavy businesses cause concern. And several federal laws preclude banks from serving these businesses, regardless of state law. Only Congress can resolve this. [Read more…]