Senate Banking Committee Set To Consider Cannabis Banking Bill

The Senate Banking Committee will be marking up a bill next week that could, if passed, make doing business much easier and safer for America’s growing legal cannabis industry.The Secure and Fair Enforcement Regulate Banking Act was introduced Wednesday by Majority Leader Schumer alongside Senator Merkley, a Democrat of Oregon, Senator Dains, a Republican of Montana, Senator Sinema, an independent of Arizona, and Senator Lumis, a Republican of Wyoming.They reintroduced a version of a bill that was considered earlier this year, and it is being billed as a bipartisan measure to “help make our communities and small businesses safer by giving cannabis businesses access to traditional financial institutions,” according to a joint statement from the senators.The Safer Banking Act, as it is known, would allow businesses to use bank accounts, acquire small business loans, and prevent federal law enforcement from ordering banks and credit unions to close accounts that are associated with legal cannabis businesses. “We look forward to the markup of this bill in the Senate Committee on Banking, Housing, and Urban Affairs on September 27,” the senators said.The reintroduction of the bill is the first move in a renewed Senate push to end one of the biggest logistical barriers the legal cannabis operations face — being locked out of financial institutions. Because cannabis remains illegal at the federal level, despite being legal in many states, banks have been generally reluctant to do business with these legal cannabis operations, according to the American Bar Association.“This state of legal limbo exposes businesses to greater risks,” attorneys James Black and Marc-Alain Galeazzi write for the ABA. “By being forced to deal in cash, robbery risks increase and it is difficult to render payment to others.”They add that being forced to deal in cash also makes cannabis businesses “more readily exploited for money laundering and other nefarious purposes, which undermines the public-policy goal of creating legal and regulated markets.”Reports of cannabis businesses being robbed are easy to find, as robberies have plagued the legal cannabis industry since its infancy. On Tuesday night, thieves rammed a car through the front window of a Seattle dispensary in a late-night smash and grab.Because dispensaries have become a common target for robbery, it’s also become expensive for businesses to get insurance, compounding the difficulty of doing business in the burgeoning industry.The Safer Banking Act would be a first step along the way to solving some of these problems. Yet, despite a strong bipartisan coalition of senators supporting the bill, it’s still far from certain that it will become law. That’s in large part because of the uncertainty of getting the bill passed in the House. The chairman of the House Financial Services Committee, Patrick McHenry, has not been coy about his opposition to the bill.“I’ve voiced my concerns,” Mr. McHenry said when the first version of the bill was introduced nearly three years ago. “There are many questions left to be answered — we do not fully understand the sweeping implications of this legislation. We do not yet know what the resulting regulatory regime will look like.”Mr. McHenry based his opposition to the bill around his concerns that allowing legal cannabis banking might expose financial institutions to criminal activity and concerns that legal cannabis banking could have public health implications.Whether the new version of the bill will satisfy Mr. McHenry’s concerns is unclear, but it’s certain that he will be primarily responsible for the treatment the bill gets in the House following the Senate’s markup next week, and Mr. McHenry told Punchbowl News that he’d “look forward to seeing their markup.”An expected sticking point will be a provision in the bill that focuses on banks choosing to deny service due to “personal beliefs or political motivations,” an issue first unearthed in a memo obtained by Politico.This section of the act is expected to generate debate because it relates to a bank’s power to choose to do business with specific businesses based on the impact on its reputation. While the specific purpose of this measure is having to do with cannabis businesses, it could also have implications for other industries that often find themself under public scrutiny, like oil and gas companies and firearm manufacturers.

Senate Banking Committee Set To Consider Cannabis Banking Bill

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