As congressional lawmakers continue to push for the passage of federal marijuana banking legislation, state treasurers across the U.S. are making clear their support for the policy change. And Colorado Treasurer Dave Young has been among the most vocal in his advocacy for the banking fix.
Young, who moderated a panel focused on cannabis banking issues at an annual conference of the National Association of State Treasurers (NAST) this week, spoke to Marijuana Moment on Thursday about the importance of ensuring that financial institutions are protected from being penalized by federal regulators for working with state-legal marijuana businesses.
Moderated by Colorado Treasurer Dave Young, the panel discussed the history, challenges, and prospects for #SAFEbanking laws that would allow legal #cannabis businesses into the mainstream banking system. https://t.co/aNykMX8050 pic.twitter.com/TWC1eQwUS0
— Colorado Treasurer Dave Young (@ColoTreasurer) March 15, 2022
The enactment of the Secure and Fair Enforcement (SAFE) Banking Act, sponsored by Rep. Ed Perlmutter (D-CO), would accomplish that, he said. The bill has cleared the House in some form six times at this point, but it’s yet to advance in the Senate under Republican or Democratic control.
At Tuesday’s NAST panel, Young conveyed to policymakers and congressional officials in the audience that this is not simply a matter of normalizing an industry that has been largely cut off from the federal financial system—it’s also a public safety imperative. Marijuana businesses in his and other states have been routinely targeted by criminals because many are forced to operate on a largely cash-only basis, he said.
It’s also a point that Perlmutter, who is retiring from Congress at the end of this session, has made. It’s part of why he’s expressed frustration with Senate Democratic leadership, which has declined to take up the SAFE Banking Act before advancing comprehensive legalization, in part because they feel it’s primarily meant to benefit the industry.
What he said 👇
— Rep. Ed Perlmutter (@RepPerlmutter) March 15, 2022
The congressman has pledged to “continue to be a real pest, and persistent in getting this done,” he said at a recent event organized by the American Bankers Association (ABA), which also recently released a poll showing majority public support for marijuana banking reform. Young said that he appreciates the sponsor’s resolve and would continue to do what he could to advance the issue.
Despite recently saying that he’s “confident” that the Senate will take up his bill this session, Perlmutter recognized that while he’s supportive of revisions related to criminal justice reform, taxation, research and other issues, he knows that “as we expand this thing, then we start losing votes, particularly Republican votes and we got enough votes in the Senate to do it” as is.
Meanwhile, the number of banks that report working with marijuana businesses ticked up again near the end of 2021, according to recently released federal data.
Marijuana Moment spoke to the Colorado treasurer about the push for marijuana banking reform, the consequences of Senate inaction and more. The following interview has been edited for length and clarity:
Marijuana Moment: Can you talk about the SAFE Banking Act in the context of public safety? I understand that many cannabis businesses in Colorado and other states have been targeted by crime over the years because of this federal policy conflict.
Dave Young: Any time you have large amounts of money flowing around in cash, it’s a huge danger. This is different than what you see with convenience stores that gets robbed—the amount of money here is extraordinary.
Then there are stories about the fact that, because of the uncertainty that ancillary businesses have for engaging with these companies, [cannabis businesses] have a hard time finding an armored car service that will actually take them up on a contract and move the money. I’m not sure if that’s consistent across the country, but I think it’s the inconsistency that businesses find themselves in that’s the problem.
We’ve seen some banks are willing to take risks—credit unions or whatever—to take some of these deposits, but the fee that they have to pay and the [suspicious activity reports] that they have to do—and really what they can and can’t do with the money—is pretty limited. As a result, this just isn’t conducive to taking that money out to the streets. So you’ve got large amounts of cash moving around. And so you’ve got robberies, you’ve got violence. And even, my understanding is, there’s been murder in in the midst of that. Not doing something isn’t going to improve that situation.
As lawmakers continue to push for the passage of federal marijuana banking legislation, state treasurers across the U.S. are making clear their support. And Colorado Treasurer Dave Young has been among the most vocal in his advocacy for the banking fix. https://t.co/hBiG5DIfXb pic.twitter.com/L5qWwK10fe
— Colorado Treasurer Dave Young (@ColoTreasurer) March 18, 2022
MM: Adult-use marijuana sales have dipped slightly over the past couple months in Colorado. Do you feel like the state’s market is stabilizing? To what extent would you attribute the dip to legalization being enacted in other states?
DY: I think that’s always been the speculation of what would happen as other states move forward. Certainly, when you were one of two or one of five [legal states], you’re certainly going to attract more attention than when it’s more prevalent as it’s becoming now.
Before I became treasurer, I was in the state House, and I was on the Budget Committee for four years. We had a number of programs that are funded through various revenues that come in through marijuana taxation. And one of them that I manage now is a program to help us repair or build schools in locations around the state that that are struggling with health and safety issues with their school building.
In part—not all the revenues, but in part—some of the marijuana revenues and other sources of revenues is going to pay the debt service for that program. And we’ve essentially run into our own little bit of a stalemate on raising the debt service limit—that we can take on more more debt so that we can move more projects forward—due to the concern about the consistency of the revenue stream coming from there.
This uncertainty about [federal] legalization as well—particularly when the [Justice Department] Cole Memo was rescinded—raised some concerns. What can we count on in the future? It’s always a little bit more uncertain when those things happen.
There’s tremendous need right now, and that’s increased somewhat. But I think everybody’s got eyes on what is happening with the industry. What can we estimate for revenues?
MM: Perlmutter has frequently talked about his frustration over inaction in the Senate on the SAFE Banking Act. Do you share that frustration? And what would you say to Senate Majority Leader Schumer, who the congressman has largely placed blame on for that inaction based on the leader’s insistence on passing broad legalization first?
DY: I think Congressman Perlmutter is in a much better place to assess that than I am I. I don’t live there [in D.C.] and work there day in and day out like those in Congress must do. I get a flavor of what’s happening, but having served in a much different kind of role, but similar role as a state representative, there are always a lot of advocacy interests, stakeholders that are involved in any process. And if a problem was easy to solve, it would have been solved long before it got to a state legislature or to Congress, right?
The fact that we struggled with these is because there’s a wide diversity of opinion about how to move forward. And sometimes it’s not even a majority—you can’t find a majority no matter how you put the pieces together. And so to point a finger at anybody—I’m going to not blame, I’m just going to say, I think that every every elected official is always looking for a way to put a coalition together to get enough votes to get the work done. And if they can’t, then how do they refashion a bill so they can create that coalition, create that at least majority, if not consensus, on how to move forward? This is obviously a very difficult topic.
Maybe the broader bill gets tried and maybe it passes, maybe it doesn’t, but maybe once something happens—if it doesn’t pass, it gives a little momentum to a more narrow approach, an effort to come back and say, well, doing nothing really doesn’t make sense there. If we can’t get a broader bill across the finish line, not doing anything means that these public safety issues are going to continue to be a problem. There’s going to be continued crime and harm and and lots of uncertainty among not just the businesses directly [in cannabis], but these ancillary businesses that are anxious to support them.
— Colorado Treasurer Dave Young (@ColoTreasurer) March 15, 2022
MM: During your time in Washington, D.C. for the NAST conference, can you share the kinds of conversations you had with lawmakers on the Hill about advancing SAFE Banking?
DY: I met with both [Sen. John Hickenlooper (D-CO) and Michael Bennett (D-CO)] and had great conversations with them. I think they’re obviously supportive of getting a bill in some form or another across the finish line. And I think both are trying to work on that given some political realities that they see.
They support [Perlmutter’s] bill. But there’s just the question of, can the Senate, can Congress, get a broader bill through? And if so, what does it look like? And if not, what happens then? I think that what I said earlier pretty much echoes the conversations that I had with them.
Legal retailers must be allowed out of the cash business to stop the inequities and traumatic daily robberies taking place in #WA state and around the country.
— WA State Treasurer (@WaTreasurer) March 16, 2022
MM: Absent the passage of the SAFE Banking Act, we still have 2014 federal FinCEN guidance for banks to offer some level of protections for financial institutions that work with state-legal marijuana businesses. Do you feel it’d be helpful for the agency to provide any additional clarity as lawmakers work on a more permanent fix?
DY: I haven’t thought about that much, to be honest with you. But I don’t think clarity ever hurts. What you can do as an agency versus actual work legislatively sometimes is limited, just because of the configuration of the statutes or the law. But I think clarity always helps.
Some parts of our economy are a little bit more risk-tolerant and are okay waiting without that clarity. But for the most part, many are not—both within the financial industry itself and these ancillary businesses included. Clarity would help a bit. Though how far it can go? I don’t know.