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.