“A $3 trillion left-wing wish list” is the moniker that Senate Majority Leader Mitch McConnell gave to the latest coronavirus stimulus package that passed the House of Representatives on Friday, May 15. The Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act, approved 208-199 along party lines, includes provisions seemingly disconnected from immediate needs related to the pandemic, such as access to banking for cannabis businesses.
This is a key measure that has been requested by the legal cannabis industry all over the country for years, now. As it stands, even in states where cannabis is fully legal, most cannabis businesses are denied access banking services like opening an account or accepting credit cards. This is due to the fact that cannabis is still a federally illegal Schedule I drug. “Any contact with money that can be traced back to state marijuana operations could be considered money laundering and expose a bank to significant legal, operational and regulatory risk,” the American Bankers Association explains. As a result, countless cannabis companies are forced to conduct business exclusively with cash. Forbes estimate that as many as 70% of the industry operates without a bank account.
This is something that the Secure And Fair Enforcement (SAFE) Banking Act of 2019 set out to correct last year. The bill, which passed the House with overwhelming bipartisan support, aimed to prohibit federal actors from penalizing banks that provide financial services to legal cannabis businesses. The Senate pumped the metaphorical brakes, and the SAFE Banking Act seems dead. That is why its sponsor, Rep. Ed Perlmutter, fought to include it in the HEROES Act.
In the version that was approved by the House on May 15, a section of the HEROES Act is directly dubbed the SAFE Banking Act of 2020. The bill, if it passes, would ensure that no action can be taken by a federal regulator against financial institutions that work with legal cannabis companies. That would grant the entire industry access to bank accounts, loans and insurance; for customers, it would mean being able to pay with a credit card, a check or online.
The last point is one that directly relates to the current concerns surrounding COVID-19. Despite many cannabis businesses being labeled as essential during quarantine and implementing common-sense measures to protect workers and customers—like delivery and curbside pickup—most of their transactions still have to be a physical exchange of cash. “The SAFE Banking Act of 2020 would address the increased health risk of spreading COVID-19 on bank notes and coins, as well as the increased public safety risk associated with this cash-only industry. At a critical time, safe banking will help protect jobs and encourage lending in our communities,” Rep. Perlmutter said in a speech in support of the HEROES Act.
A Partisan Disagreement
Before being able to provide relief to the 250,000 Americans working in the legal cannabis industry, the HEROES Act still needs to pass through the Republican-controlled Senate. Sen. Mitch McConnell was particularly outspoken about his opinion of the bill: “It strikes me as hardly salvageable. Just to give you an example of some of the absurdity, there is money in there for illegal immigrants. It mentions the word cannabis 68 times, more than the words jobs or hire are mentioned in the entire bill. It’s a parade of absurdities that can hardly be taken seriously.”
The fact that cannabis is mentioned numerous times in the text of the bill has become a rallying cry for Republicans who oppose it. The list includes Sen. Ted Cruz, Rep. Jodey Arrington, Sen. Bill Cassidy,Sen. John Thune, Rep. Doug Lamborn, Rep. Ross Spano, Rep. Mike Johnson, Sen. John Kennedy, Rep. Kevin Brady, Rep. Doug Collins and many more who specifically zeroed-in on the use of the word cannabis. This convenient factoid ignores the fact that the word cannabis is not used even once outside of the small section dedicated to the SAFE Banking Act, where it is used up to three times per sentence.
On the other side of the political compass, voices are also raising to defend the HEROES Act. “This is a change in policy that the banks are asking for even more than the cannabis companies. We urge the Senate Banking Committee to adopt the SAFE Banking provisions to ensure financial institutions can provide basic banking services to businesses that are compliant with state law,” said Don Murphy, director of federal policies at the Marijuana Policy Project.
Prior to the vote in the House, a coalition of 34 Attorneys General, including Josh Kaul of Wisconsin and Karl Racine of Washington, D.C., came together to urge Congress to include the SAFE Banking Act in the COVID-19 relief package:
“The COVID-19 pandemic has sharply focused the need for legislative relief in three key respects. First, threats to public safety caused by a cash-intensive business model, often the target of criminal activity, have intensified in the months since the pandemic began. Next, the presence of large cash transactions places law enforcement, tax regulators, consumers and patients at heightened risk of exposure to the virus. Finally, the ability to efficiently collect tax revenue from the marijuana industry, estimated to have generated $15 billion in sales in 2019, will provide critical relief for state and local governments predicting budget shortfalls due to the pandemic,” the letter reads. “The current predicament of a rapidly expanding national marketplace without access to the national banking systems has resulted in an untenable situation. We stress that current legislative models are available to fix this situation.”
“Instead of holding a vote on the HEROES Act, Senate Republicans are engaging in a clear act of political retribution designed to help the President keep his job,” denounced House Speaker Nancy Pelosi. While Democrats and Republicans are playing tug of war with the bill, it is unclear when the relief bill will be granted a vote in the Senate—or even if it will be voted on at all. For now, the future of the HEROES Act remains uncertain.
This is a key measure that has been requested by the legal cannabis industry all over the country for years, now. As it stands, even in states where cannabis is fully legal, most cannabis businesses are denied access banking services like opening an account or accepting credit cards. This is due to the fact that cannabis is still a federally illegal Schedule I drug. “Any contact with money that can be traced back to state marijuana operations could be considered money laundering and expose a bank to significant legal, operational and regulatory risk,” the American Bankers Association explains. As a result, countless cannabis companies are forced to conduct business exclusively with cash. Forbes estimate that as many as 70% of the industry operates without a bank account.
This is something that the Secure And Fair Enforcement (SAFE) Banking Act of 2019 set out to correct last year. The bill, which passed the House with overwhelming bipartisan support, aimed to prohibit federal actors from penalizing banks that provide financial services to legal cannabis businesses. The Senate pumped the metaphorical brakes, and the SAFE Banking Act seems dead. That is why its sponsor, Rep. Ed Perlmutter, fought to include it in the HEROES Act.
In the version that was approved by the House on May 15, a section of the HEROES Act is directly dubbed the SAFE Banking Act of 2020. The bill, if it passes, would ensure that no action can be taken by a federal regulator against financial institutions that work with legal cannabis companies. That would grant the entire industry access to bank accounts, loans and insurance; for customers, it would mean being able to pay with a credit card, a check or online.
The last point is one that directly relates to the current concerns surrounding COVID-19. Despite many cannabis businesses being labeled as essential during quarantine and implementing common-sense measures to protect workers and customers—like delivery and curbside pickup—most of their transactions still have to be a physical exchange of cash. “The SAFE Banking Act of 2020 would address the increased health risk of spreading COVID-19 on bank notes and coins, as well as the increased public safety risk associated with this cash-only industry. At a critical time, safe banking will help protect jobs and encourage lending in our communities,” Rep. Perlmutter said in a speech in support of the HEROES Act.
A Partisan Disagreement
Before being able to provide relief to the 250,000 Americans working in the legal cannabis industry, the HEROES Act still needs to pass through the Republican-controlled Senate. Sen. Mitch McConnell was particularly outspoken about his opinion of the bill: “It strikes me as hardly salvageable. Just to give you an example of some of the absurdity, there is money in there for illegal immigrants. It mentions the word cannabis 68 times, more than the words jobs or hire are mentioned in the entire bill. It’s a parade of absurdities that can hardly be taken seriously.”
The fact that cannabis is mentioned numerous times in the text of the bill has become a rallying cry for Republicans who oppose it. The list includes Sen. Ted Cruz, Rep. Jodey Arrington, Sen. Bill Cassidy,Sen. John Thune, Rep. Doug Lamborn, Rep. Ross Spano, Rep. Mike Johnson, Sen. John Kennedy, Rep. Kevin Brady, Rep. Doug Collins and many more who specifically zeroed-in on the use of the word cannabis. This convenient factoid ignores the fact that the word cannabis is not used even once outside of the small section dedicated to the SAFE Banking Act, where it is used up to three times per sentence.
On the other side of the political compass, voices are also raising to defend the HEROES Act. “This is a change in policy that the banks are asking for even more than the cannabis companies. We urge the Senate Banking Committee to adopt the SAFE Banking provisions to ensure financial institutions can provide basic banking services to businesses that are compliant with state law,” said Don Murphy, director of federal policies at the Marijuana Policy Project.
Prior to the vote in the House, a coalition of 34 Attorneys General, including Josh Kaul of Wisconsin and Karl Racine of Washington, D.C., came together to urge Congress to include the SAFE Banking Act in the COVID-19 relief package:
“The COVID-19 pandemic has sharply focused the need for legislative relief in three key respects. First, threats to public safety caused by a cash-intensive business model, often the target of criminal activity, have intensified in the months since the pandemic began. Next, the presence of large cash transactions places law enforcement, tax regulators, consumers and patients at heightened risk of exposure to the virus. Finally, the ability to efficiently collect tax revenue from the marijuana industry, estimated to have generated $15 billion in sales in 2019, will provide critical relief for state and local governments predicting budget shortfalls due to the pandemic,” the letter reads. “The current predicament of a rapidly expanding national marketplace without access to the national banking systems has resulted in an untenable situation. We stress that current legislative models are available to fix this situation.”
“Instead of holding a vote on the HEROES Act, Senate Republicans are engaging in a clear act of political retribution designed to help the President keep his job,” denounced House Speaker Nancy Pelosi. While Democrats and Republicans are playing tug of war with the bill, it is unclear when the relief bill will be granted a vote in the Senate—or even if it will be voted on at all. For now, the future of the HEROES Act remains uncertain.
