A bipartisan coalition of state treasurers sent a letter to congressional leaders on Wednesday, asking that they include marijuana banking protections in the next piece of coronavirus relief legislation.
The letter, led by Oregon Treasurer Tobias Read, says that the current pandemic has underscored the need to pass the Secure and Fair Enforcement (SAFE) Banking Act, which would protect banks that service the cannabis industry from being penalized by federal regulators.
“This provision would not only address new safety issues created by the COVID-19 crisis, but also those caused by the existing conflict between federal and state cannabis laws,” they said. “The 28,000 cannabis related legitimate businesses and their 243,700 employees, who already faced significant burdens before the pandemic, are now confronting dangerous new obstacles as they attempt to address the changed circumstances. To keep workers, patients and consumers safe, it is essential that we reduce the use of cash by creating access to financial services for these state-licensed businesses.”
The House did include the SAFE Banking Act in its COVID-19 relief bill that it approved in May, but Senate leadership has indicated that the larger bill as such will not advance in the chamber and President Trump said he would veto it. Some Republicans, including Majority Leader Mitch McConnell (R-KY), have specifically criticized aspects of the cannabis banking language itself.
The standalone SAFE Banking Act previously passed the House in a largely bipartisan vote last year.
“Lack of access to financial services forces businesses to operate exclusively using cash making these businesses, their employees, and customers targets for violent crime,” the 16 state treasurers wrote to McConnell and other congressional leaders in the new letter. “In many cases, cannabis stores and dispensaries are limiting sales to curbside pickup or delivery, forcing these all-cash transactions to take place outside, without the option of no-contact exchanges.”
The letter explains how the use of cash “is particularly dangerous” for the millions of registered medical cannabis patients” because the virus can live on surfaces, including cash and coin, for extended periods of time.”
“In response to the coronavirus, the international financial community, many major businesses, and even governmental entities have looked for cashless alternatives to financial transactions. However, the overwhelming majority of medical cannabis transactions still involve cash. This is particularly dangerous for medical cannabis caregivers and patients who are already at a higher risk for contracting the virus. Allowing cannabis-related legitimate businesses access to traditional banking could reduce the spread and protect many of the most vulnerable among us.”
The letter goes on to discuss the growing economic impact of the marijuana industry as more states legalize and the importance of securing protections for the financial institutions that service these businesses. It also points out how, despite the fact that many states have deemed cannabis providers as essential, they are ineligible for federal coronavirus-relief loans due to ongoing prohibition.
“With millions of dollars in cash transactions putting employees, patients, and consumers at risk, it is vital that Congress act swiftly to pass this important legislation,” Read said in a press release.
Rep. Ed Perlmutter (D-CO), sponsor of the SAFE Banking Act, said, “I appreciate the ongoing support of the SAFE Banking Act by our nation’s state treasurers.”
“Legitimate cannabis-related businesses and their employees already faced significant burdens before the pandemic, but now they face even greater risk during the COVID-19 crisis,” he said. “The SAFE Banking Act respects states’ rights and allows critical access to the banking system while making our communities safer by reducing the public safety risk associated with all-cash transactions and helping to reduce the spread of the coronavirus through banknotes and coins.”
I appreciate the ongoing support of our nation’s state treasurers. The #SAFEBankingAct respects states' rights and allows critical access to the banking system while making our communities safer and helping to reduce the spread of #COVID19 through banknotes and coins. https://t.co/Lo20gMbHPa
— Rep. Ed Perlmutter (@RepPerlmutter) July 9, 2020
The congressman said in May that he felt there was a 50-50 chance that his legislation is approved in the Senate through a COVID-19 package.
Treasurers from Alaska, California, Colorado, Illinois, Iowa, Maine, Massachusetts, Nevada, New Mexico, North Dakota, Oregon, Pennsylvania, Rhode Island, Vermont, Virgin Islands and West Virginia each signed the letter.
Another bipartisan coalition of 34 state attorneys general similarly wrote to Congress in May, urging the passage of coronavirus relief legislation that contains marijuana banking provisions.
As for the standalone cannabis banking bill, it remains pending before the Senate Banking Committee, where negotiations about the details of the proposal are ongoing.
Meanwhile, recent federal data shows that the number of banks and credit unions that are working with marijuana businesses declined slightly in the last quarter. It’s not entirely clear what’s behind that trend, however.
Separately, a House appropriations subcommittee released a spending bill this week that includes a provision that would bar the Treasury Department from using its funds to penalize financial institutions that service the industry if the business client activity is legal under state or tribal law.
Read the letter about cannabis banking from the state treasurers below: