Will banks finally get to take a hit of the legal marijuana business?
After years of failed attempts, a bill that would provide banks and other financial institutions with a safe harbor from sanctions for doing business with licensed marijuana businesses will be marked up by the House Financial Services Committee on March 26.
Introduced by Rep. Ed Perlmutter (D-Colo.) and Rep. Denny Heck (D-Wash.), the SAFE Banking Act would allow banks, credit unions and other financial institutions to provide traditional banking services to licensed marijuana-related companies in states where marijuana is legal, without fear of breaking federal law.
The bill has 126 Democratic co-sponsors and 12 Republican co-sponsors.
Despite being legal in some form in two dozen states, cannabis remains illegal under the federal Controlled Substances Act, so financial institutions and their employees are subject to criminal prosecution and sanctions by regulators if they provide services to licensed marijuana businesses.
That forces cannabis companies to operate primarily with cash, making them vulnerable to robberies, violence and white-collar crime, Perlmutter said in a call with reporters.
“We’ve had robberies. We’ve had murders. We’ve had violence. We have to stop that,” said Perlmutter, whose state legalized the recreational use of marijuana in 2012. “For Colorado and the nation as a whole, this would help resolve access to banking. It provides more certainty. It helps the employees, it helps the banks.”
The legislation “is going to assist the industry generally by allowing legitimate businesses to get legitimate banking services. It’s certainly going to stabilize it,” Perlmutter added.
In California, cannabis dispensaries have dropped off suitcases full of cash to pay their taxes, Fiona Ma, the state’s treasurer, told the committee at the bill’s first-ever hearing in February.
Neill Franklin, executive director of the Law Enforcement Action Partnership, told the committee that employees of cannabis businesses are taking their two-week salaries, which can top a few thousand dollars, in cash. “I fear dispensary employees being at great risk,” he said.