Bill to allow marijuana businesses to use banks may have enough votes to pass Senate

A bipartisan group of Senators believes this is the year the SAFE Banking Act will pass.
Published: May. 8, 2023 at 5:09 PM EDT
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WASHINGTON (Gray DC) - Forcing marijuana businesses to operate all in cash is downright dangerous, says bipartisan duo Sen. Jeff Merkley (D-Ore.) and Sen. Steve Daines (R-Mont.). That’s why the pair have spent nearly 8 years trying to get a bill passed in the Senate that would allow those businesses to use banking and financial services.

They believe this year is the ‘magic’ moment the Secure and Fair Enforcement Banking Act (SAFE Banking Act), which has passed the U.S. House of Representatives 7 times, will finally pass the Senate.

“The concept of operating in cash is an absolute disaster. It has meant that employees are mugged and attacked, robbed. It means that the stores are broken into. We had over 100 break-ins last year for stores in Oregon. We’re on a pace to exceed that this year,” said Sen. Merkley. “I was talking to an entrepreneur the other day who I think he had some 18 break-ins in his outlets because people know there’s a tremendous amount of cash. Not to mention that when you are operating in cash, it proceeds to become an opportunity to maybe keep two sets of books or an opportunity for money laundering by organized crime.”

Most marijuana businesses currently do not have access to banks or financial services due to federal law, which maintains that cannabis is illegal. Federally, marijuana is considered a Schedule I drug which is defined by the United States Drug Enforcement Administration as having “no currently accepted medical use and a high potential for abuse.”

Sen. Daines added, “these cannabis businesses are only allowed to deal in cash. They’re prohibited from getting into the banking system. That creates a lot of crime. And that’s why I’ve got Sheriffs across the state of Montana supporting this legislation, as well as Attorneys General across the country, because they know this is a way to reduce crime.”

Learn the history of the SAFE Banking Act in the U.S. House here

The pair said the SAFE Banking Act also maintains states rights. While the legislation creates a safe harbor from criminal prosecution and liability for banks that serve state-sanctioned cannabis businesses, it maintains the right to choose not to offer those services. In addition, the legislation provides protections for hemp businesses.

“This is just, I think, doing the right thing for the people of Montana going forward when we’ve got law enforcement supporting it. You’ve got our banks supporting it. You got small businesses supporting it. This is a good thing. And that’s why I believe we’re going to get a good bipartisan vote in the Senate this time to match the House votes that have occurred seven different times supporting this legislation and get this signed into law,” said Daines.

This legislation extends safe harbor to Community Development Financial Institutions (CDFI) and Minority Depository Institutions (MDI). The Senators included that measure, they said, because those organizations assist underserved communities “who face challenges in accessing capital and provide affordable access to financial services.”

“We now have momentum in that we have quite a substantial number of Republicans on the bill. We have 40 sponsors. We have the support of the Majority leader. We’ve been working very closely with the chair of the Banking Committee, where this bill will go next. And so, the path is looking (like) the best opportunity we’ve ever had,” said Merkley.

This month, the American Bankers Association also sent a letter to Congress. It calls the SAFE Banking Act “urgently needed” and “widely supported.”

U.S. Representatives Earl Blumenauer (D-Ore.) and Dave Joyce (R-OH) are two main supporters of the SAFE Banking act in the U.S. House.