Bill to Allow Cannabis Banking Passed by US House of Representatives, Still Stalled in Senate

On January 5th of this year, two armed men wearing ski masks entered Dockside Cannabis in Seattle, Washington. After holding employees at gunpoint and robbing the store of cash and weed, the invaders shot one of the store’s budtenders twice, severely injuring him. This year (and we are only in February), there have been 32 armed robberies of cannabis retail outlets in Western Washington because businesses selling weed in the state can only deal in cash because of federal laws.

The National Organization for the Reform of Marijuana Laws (NORML) reports that legislation just passed by the House is seeking to change that and allow cannabis retail outlets across the nation to partner with banks and take credit card payments. The America COMPETES Act of 2022 was passed by a majority of the US House of Representatives and includes provisions of the Secure and Fair Enforcement (SAFE) Banking Act.

But don’t get your hopes up just yet. The House has to date approved the legislation six times, either in the form of an amendment or as a stand-alone piece of legislation. Offered as an amendment by sponsor Rep. Ed Perlmutter (D-CO), the bill would allow banks and similar financial institutions to work with state-licensed cannabis businesses which is currently prohibited by federal law, making retail cannabis outlets highly vulnerable to crime and violence. But the Senate has yet to approve the measure.

According to NORML, Whitney Economics surveyed 396 licensed cannabis businesses. The survey revealed that over 70 percent of those that responded reported a “lack of access to banking or investment capital” as their primary business challenge, more so even than state regulations or competing with the black market.

“It is imperative for the interests of public safety, transparency, and the economic viability of small cannabis businesses that this legislation is approved as soon as possible,” said NORML Political Director Morgan Fox. “The fact that the people’s chamber has approved this measure in various forms so many times is a clear indicator of where voters stand on this issue. Continued inaction by the Senate on this popular bipartisan reform puts workers and customers at risk of violence, makes it harder for regulators to accurately track cannabis revenue, and perpetuates the high costs and lack of access to capital that are increasingly widening the gap between large and small businesses in the cannabis space when it comes to their chances to succeed. The Senate should ensure this provision remains in the final version of this funding package and approve it swiftly.”

Fox continued:

“The SAFE Banking Act is only the first step toward making sure that state-legal marijuana markets operate safely, efficiently, and fairly. But unfortunately, the sad reality is that those who own or patronize these currently unbanked businesses are still nonetheless recognized as criminals in the eyes of the federal government and by federal law. This situation can only be rectified by removing marijuana from the list of controlled substances, and there are several pending legislative vehicles before Congress that can accomplish this goal. In the meantime, the passage of the SAFE Banking Act is a step in the right direction that will directly improve many people’s lives.”

Current federal restrictions mean that thousands of cannabis businesses in states that have legalized the recreational sale of cannabis to adults cannot accept credit cards, deposit revenues, get loans, write checks to satisfy payrolls, or pay their taxes. Imagine if the wine industry, for example, was unable to operate under routine business practices. The industry would be hobbled and much smaller than it is today.

State-compliant cannabis businesses operate under draconian restrictions that restrict the industry and increasingly put employees at risk as crime skyrockets across America.

It is time for the Senate to place the Secure and Fair Enforcement (SAFE) Banking Act into law. The result will increase job production and tax revenues. It will also create a safer environment for those who work in America’s cannabis stores while protecting the assets of ganjapreneurs whose economic activism has made the cannabis industry a billion-dollar player in this nation.