An association of state treasurers has agreed to reaffirm its support for a resolution calling on Congress to enact federal marijuana banking reform legislation.
The National Association of State Treasurers (NAST) moved to renew its support for the measure during its Annual Business Meeting on Monday. The measure states that NAST is not taking a position on cannabis legalization, but the bipartisan treasurers do back legislation to fix the marijuana banking problem stemming from federal prohibition.
There’s an “ongoing conflict between states’ laws legalizing cannabis and current federal laws, resulting in the vast majority of financial institutions refusing to provide banking services to legal cannabis businesses,” the whereas section of the updated resolution, which was originally adopted in 2019, says.
During today’s @StateTreasurers Annual Business Meeting, state treasures from across the country agreed to renew a resolution on advancing legislation allowing legal #cannabis states the ability to safely participate in the national #banking system. #SafeBankingAct must pass!
— WA State Treasurer (@WaTreasurer) September 19, 2022
Because of the limited access to traditional financial systems, cannabis businesses frequently operate on a cash-only basis, which the associations says is “inefficient, expensive, and opaque, making illicit activity more difficult to track and posing a significant risk to public safety by increasing the likelihood of violent crime.”
It goes on to say that the “inability to access banking services impacts not only legal cannabis businesses, but also employees in the cannabis industry and secondary service providers who contract or do business with cannabis businesses.”
A new line added to the 2022 version of the resolution also notes that “states must collect fines, fees, and taxes from state legalized cannabis related businesses.”
Therefore, NAST resolved that it supports “common sense federal laws and regulations to provide essential banking services to state legalized cannabis businesses, promote public safety and financial transparency, and facilitate local, state and federal tax and fee collection without compromising federal enforcement of anti-money laundering laws against criminal enterprises.”
While the House has passed the Secure and Fair Enforcement (SAFE) Banking Act in some form seven times at this point, the Senate has consistently stalled on the legislation.
The banking reform is part of ongoing talks about introducing a package of incremental cannabis reforms during the lame duck session. Advocates and lawmakers are pushing for a more equity-centered “SAFE Plus” bill that goes beyond banking to also address issues such as expungements, veterans medical marijuana access and research, among other proposals.
“I am pleased that my fellow state treasurers reaffirmed their support today for cannabis banking,” Washington State Treasurer Mike Pellicciotti told Marijuana Moment on Monday. “It’s past time for the Senate to now do the same and pass the SAFE Banking Act.”
Colorado State Treasurer Dave Young told Marijuana Moment that, in the years since states started moving to legalize cannabis, the “industry has operated without equitable access to banking, forcing cannabis retailers to operate primarily in cash.”
“The result is a 21st century Wild West in which armed hold ups and storefront heists are becoming an all-too-common risk,” he said. “I strongly support efforts to ensure that Colorado’s cannabis industry can operate safely and without fear of leaving employees vulnerable as targets for one-off opportunists and organized criminals alike. We must allow our legal cannabis businesses to participate in the federal banking system.”
The resolution concludes by voicing support for “financial law enforcement authorities’ consistent interpretation of the FinCEN guidance and, barring changes to federal law, the continued application of the guidance to allow some financial institutions to offer banking services to the state legalized cannabis industry.”
At a NAST conference earlier this year, treasurers held a panel to discuss the “history, challenges, and prospects for SAFE banking laws that would allow legal cannabis businesses into the mainstream banking system.”
State treasurers have been among the consistent voices pushing Congress to take action on the issue, submitting multiple letters to leadership on the issue over the years, for example.
Bipartisan congressional lawmakers have been stepping up the push to pass a marijuana banking bill this year, and over 100 cannabis business leaders were in Washington, D.C. last week for lobby days organized by a leading cannabis industry association.
Sources familiar with the state of negotiations over SAFE Plus have signaled that the bill drafting is fairly far along. Sen. Cory Booker (D-NJ) recently said that he expects the legislation to be introduced sometime after the November midterms, and Rep. Dave Joyce (R-OH) told Marijuana Moment that he felt the timeline for a filing would likely fall between November and December, though nothing is set in stone.
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SAFE Banking Act sponsors Rep. Ed Perlmutter (D-CO) and Sen. Jeff Merkley (D-OR) also laid out next steps for the cannabis banking reform at a briefing organized by the U.S. Cannabis Council (USCC) in July.
Senate Majority Leader Chuck Schumer (D-NY) and Sen. Cory Booker (D-NJ), who filed a comprehensive legalization bill in July—have more openly embraced the idea of a “compromise” as the leader has worked to build consensus on the alternative package of incremental reforms.
While lawmakers have been discussing plans to pass some kind of cannabis standalone legislation to resolve the banking problem, another option that’s still on the table is enacting the SAFE Banking Act as a provision of a large-scale defense bill.
The House-passed version of the National Defense Authorization Act (NDAA) contains the banking language, though it was not in the Senate version, and it remains to be seen whether it will be included in the final, must-pass package sent to the president’s desk.
Cannabis Regulators of Color Coalition (CRCC) released a paper in August that outlined what they view as shortcomings of the standalone SAFE Banking Act and recommended several amendments to bolster its equity impact.
Booker said at an event organized by CRCC that the standalone legislation “requires changes” if it’s going to advance before cannabis is federally legalized.
The senator initially signaled that he was coming around to marijuana banking reform (contingent on equity provisions) at a Senate Judiciary subcommittee hearing in July that he convened as chairman.
Meanwhile, Perlmutter also said in a recent interview that he feels the introduction of the Senate legalization bill alone means that lawmakers have overcome a legislative “hurdle” that’s kept SAFE Banking from advancing in the chamber.
Meanwhile, a recent poll found that Republican voters are on board with a number of marijuana reform proposals—from banking to medical cannabis legalization to expungements for prior marijuana convictions to letting states set their own policies without federal interference.
According to a poll from Independent Community Bankers of America (ICBA) that was released this month, a majority of American voters (65 percent) support allowing banks to work with state-legal marijuana businesses—and most people believe it will both improve public safety and promote social equity.
The survey results are consistent with the findings of a separate poll from the American Bankers Association (ABA) that was released in March. It also showed that 65 percent of Americans back the marijuana banking reform.
Separately, the non-partisan National Conference of State Legislatures (NCSL) recently voted to adopt a revised policy directive that expresses support for federal marijuana descheduling and cannabis banking reform amid the state-level legalization movement.
Read the text of the revised 2022 NAST resolution on federal marijuana banking reform below: