Congressional leaders are being urged to enact cannabis banking reform in the US through a large-scale defence legislation led by a bipartisan coalition of governors.
On Tuesday (November 9), a letter was sent to the top lawmakers in the House and Senate by the state officials calling for the Secure and Fair Enforcement (SAFE) Banking Act to be attached to the must-pass National Defence Authorisation Act (NDAA). The House has already approved its version and included the banking legislation, but it’s uncertain if the Senate will do likewise.
The letter, signed by 22 governors and Washington D.C.’s mayor and led by Colorado Governor Jared Polis, states the Act “will allow cannabis businesses to access normal banking services, which will transition fully cash-based cannabis transactions into the financial system where they belong.”
With many states and territories passing recreational or medicinal cannabis legislation, the letter says “medical and recreational cannabis sales in the US were estimated to total US$17.5 billion last year, but because of antiquated federal banking regulations, almost all cannabis transactions are cash-based.”
Congressman Ed Perlmutter is the chief sponsor of the House standalone banking bill, which would also ensure financial institutions that service state-legal cannabis business are not penalised by federal regulators.
The letter adds: “Not only are cash-only businesses targets for crime, cannabis businesses are further disadvantaged compared to other legal businesses by being unable to open bank accounts or obtain loans at reasonable rates.
“The cannabis industry is legal in some form in the majority of US states and it is too large a market to be prohibited from banking opportunities.
“The SAFE Banking Amendment will also harmonise federal and state law to ensure that depository institutions that provide banking services to legitimate cannabis-related businesses and ancillary businesses are not penalised.”
The banking reform is the latest development in an ongoing debate around cannabis, with international banking giant J.P. Morgan Chase & Co telling its prime brokerage clients it will no longer allow them to buy stocks in some US cannabis companies.
While there is some debate about whether banking laws should advance before prohibition has ended, the letter insists “the SAFE Banking Act has more bipartisan support than ever before and Congress must take steps to ensure that this measure is included in the final version of the NDAA that goes to President Biden’s desk.”