by Michelle Rutter, NCIA Government Relations Manager
While you, your business, and much of the NCIA team were busy at our Cannabis Business Summit in San Jose, we’ve still been working hard for you back in Washington, D.C.
Just yesterday morning, the Senate Committee on Banking, Housing, and Urban Affairs held a public hearing, “Challenges for Cannabis and Banking: Outside Perspectives,” to discuss the current banking challenges faced by the legal cannabis industry and to assess the unintended consequences and public safety risks associated with commercial businesses operating in an all-cash environment. Earlier this year, to help find close the gap between federal and state cannabis laws, Senators Jeff Merkley (D-OR) and Cory Gardner (R-CO) introduced S. 1200 – The Secure And Fair Enforcement (SAFE) Banking Act, to provide protections for financial institutions that engage with state-legal cannabis-related businesses, including ancillary businesses that have a connection with cannabis businesses.
During the hearing, much of the discussion surrounded how financial institutions currently provide services to cannabis-related businesses under the Treasury Department’s Financial Crimes Enforcement Network 2014 guidance, the implementation of the SAFE Banking Act, and potential threats to the general public. One of the witnesses, Ms. Rachel Pross, Chief Risk Officer at Maps Credit Union, cited a 2015 report by the Wharton School of Business estimating, “one in every two cannabis dispensaries were robbed or burglarized with the average thief walking away with anywhere from $20,000 to $50,000 in a single theft.”
Banking Committee Chairman Mike Crapo (R-ID) dedicated much of his time to understand how the SAFE Banking Act would regulate financial institutions and ensure the banking industry could and operate in compliance with a business selling a Schedule I product. Towards the end of the hearing, Crapo said, “I think the case has been made pretty strongly here today about the need to get the banking industry issues relating to cannabis resolved.”
• Chairman Crapo acknowledged the disconnect between federal and state cannabis banking laws, and implied an openness to advancing the SAFE Banking Act if certain compliance and regulatory issues were clarified, even if marijuana was not necessarily de-scheduled.
• Chairman Crapo’s line of questioning overwhelmingly focused on how financial institutions, operating under varying state cannabis laws, would comply with federal regulation for a federally illegal product, rather than rescheduling marijuana before attempting banking reforms. Also, Chairman Crapo addressed questions mostly to all the witness rather than to one person and did not push one position over another.
• Besides Chairman Crapo, no other Republican Senators on the Banking Committee attended the hearing.
• The SAFE Banking Act is still the best and most supported legislative vehicle to address cannabis-related banking issues.
You can take action to help our industry TODAY. Call your Senators and ask them to support S. 1200: the Secure And Fair Enforcement (SAFE) Banking Act.