A bipartisan group of representatives reintroduced a cannabis banking reform bill to the U.S. House of Representatives on Thursday. The Secure and Fair Enforcement (SAFE) Banking Act is expected to pass the Democrat-controlled House, where it passed before in 2019 and 2020, but could face a tougher battle in the split Senate.
"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," Rep. Ed Perlmutter (D-Colo. 7th District) said in a statement.
Sponsors of the bill include Perlmutter, who authored it, and Reps. Nydia Velázquez (D-N.Y. 7th District), Steve Stivers (R-Ohio 15th District), and Warren Davidson (R-Ohio 8th District). It currently has more than 100 co-sponsors in the House.
The SAFE Banking Bill seeks to grant a safe harbor to banks that choose to serve the cannabis industry, permitting cannabis businesses to access basic banking services like loans, credit, and debt funding. Current federal law prohibits banks from working with cannabis businesses because they are federally illegal. Although many cannabis companies have managed to strike deals with banks and credit unions, the cannabis industry still tends to be very cash-heavy.
The SAFE Banking bill passed the U.S. House of Representatives as a standalone bill in November 2019. Although a majority of support came from House Democrats, 91 Republicans also threw their support behind the bill. The House approved the text of the bill two additional times in 2020 while attempting to shoehorn the legislation into broader COVID-19 relief, according to Marijuana Moment. Lawmakers echoed arguments from industry insiders and advocates that operating cash-heavy businesses amid the pandemic posed a considerable health risk.
"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," Perlmutter said in a statement.
However, SAFE Banking never made it into the Senate's COVID-19 relief bill. At the time, Democrats faced heated criticism from Republicans that they were prioritizing the cannabis industry over pandemic relief.
The cannabis industry is more hopeful this time around. Not only do Democrats have unified control of the government, but cannabis banking reform has typically enjoyed more bipartisan support than decriminalization or legalization efforts.
"We are grateful to the sponsors of this legislation who have generated strong and consistent bipartisan support year after year, and we are confident that it has a clear path to approval again," Aaron Smith, co-founder and CEO of the National Cannabis Industry Association (NCIA), said in a statement.
SAFE Banking could, however, face a tougher fight in the Senate, which is split 50-50 between Democrats and Republicans. Several more moderate Democrats have already proved their willingness to break with the majority on certain issues, like the minimum wage hike. Even the more mainstream coronavirus relief bill required a tiebreaker vote from Vice President Kamala Harris. Cannabis lost its most vocal Republican proponent when Sen. Cory Gardner (R-Colo.) lost his reelection race in November, but SAFE Banking already had a handful of Republican co-sponsors in the Senate back in 2019 when Gardner and Sen. Jeff Merkley (D-Ore.) introduced it.
Senate Majority Leader Chuck Schumer (D-N.Y.), however, has continued to affirm his support for federal cannabis reform. On Thursday, shortly after Perlmutter reintroduced SAFE Banking to the House, Sen. Ron Wyden (D-Ore.) tweeted an eight-minute video of himself, Sen. Schumer, and Sen. Cory Booker (D-N.J.) talking about cannabis decriminalization and teasing legislation they pledge to release "shortly."
"We want to move this, and we urge all of our friends out there to let their senators, let their congressmen know this is long overdue. It's an issue of justice, justice, justice, as well as freedom," Schumer said.
During the clip, the senators, who pledged in early February to advance federal cannabis reform, outlined their several areas of focus. Schumer underscored the need for cannabis decriminalization, record expungement, and reinvestment of cannabis tax revenue into communities harmed by cannabis. Sen. Booker emphasized the disproportionate impact cannabis criminalization has had on people of color, veterans, and low income communities, mentioning the ACLU statistic that Black Americans are 3.7 times more likely to be arrested for cannabis possession than white Americans. Wyden added that federal laws have impacted cannabis business prospects, in part through punitive tax codes that prevent cannabis businesses from taking deductions.
"We don't want the big tobacco companies and the big liquor companies to swoop in and take over. The legislation we have will make sure that smaller businesses, businesses in communities of color, get the advantage because the communities of color have paid the price for decades. They should at least get something back," Schumer said.