A Senate committee held a listening to on Tuesday to debate methods for cannabis companies working legally below state legislation to acquire entry to banking and monetary providers. On the listening to, Senators and witnesses together with members of the cannabis business targeted on the Safe and Honest Enforcement (SAFE) Banking Act of 2019.
Underneath the measure, federal banking regulators can be prohibited from penalizing banks that select to serve cannabis corporations doing enterprise in accordance with state legislation. Underneath present rules, banks are topic to penalties below federal cash laundering and different legal guidelines for servicing such firms, leaving the cannabis business to function in a dangerous surroundings heavy in money.
The Senate’s model of the measure, (S. 1200) was launched in April by Sen. Jeff Merkley, a Democrat from Oregon, and has 31 co-sponsors. The Home invoice (H.R. 1595) was launched by Democratic Rep. Ed Perlmutter of Oregon and is co-sponsored by 206 representatives. In March, the invoice was authorized by the Monetary Companies Committee and is predicted to be thought of on the Home ground after the August recess.
Witnesses Testify at Listening to
In his testimony earlier than the committee, Colorado Republican Sen. Cory Gardner, one of many co-sponsors of the SAFE Banking Act, testified that public opinion is in favor of a change in cannabis coverage reform. Gardner additionally famous that the invoice has bipartisan help in each homes of Congress, a rarity in right now’s hyper-partisan political local weather.
“There was a dramatic shift in People’ views of cannabis in recent times,” Gardner mentioned. “Polling exhibits that about 65% of People help legalization of marijuana. 93% help medical marijuana. Actually, majorities of each events help legalization. In a time when all of the speak is about how divided we’re, it’s laborious to seek out that kind of help for a problem.”
Gardner added that cannabis coverage reform was even succeeding in conservative states and that in simply the final 12 months 5 extra states, Michigan, Missouri, Oklahoma, Utah, and Vermont, had adopted or expanded marijuana applications.
“Briefly, the states are main on this problem, and the federal authorities has failed to reply,” he mentioned. “It has closed its eyes and plugged its ears and pretended the problem will go away. It gained’t.”
Present Guidelines an Unfair Burden on Hashish Business
One other witness who testified earlier than the committee, John Lord, the board chair of the Hashish Commerce Federation and the CEO of a Colorado vertically-integrated operator within the business, mentioned that present rules put a considerable burden on cannabis companies.
“Because of the dichotomy between state and federal legal guidelines, banks and credit score unions have been reluctant to serve cannabis companies or have refused to take action altogether,” Lord informed the committee. “In some circumstances, banks that had been prepared to work with cannabis firms had been discouraged or prevented from doing so by their regulators. Consequently, we have now regularly struggled to acquire and keep financial institution accounts with egregiously excessive charges.”
Lord additionally famous that the unfavorable impacts of present rules hit small corporations the toughest.
“The present state of affairs is very difficult for small companies. Whereas we, resulting from our dimension, are in a position to take up the extra prices related to money administration and exorbitant financial institution charges, many small companies will not be,” he added. “Moreover, resolving the banking problem might considerably help cannabis companies in securing enterprise loans. That is crucial to small enterprise homeowners who could not have entry to different sources of capital.”
Hashish Insurance coverage Measure Launched
Earlier than Tuesday’s listening to, Democratic Sen. Bob Menendez of New Jersey introduced that he was introducing a invoice that will give the cannabis business larger entry to insurance coverage providers. The invoice would shield insurers who supply protection to cannabis corporations and related corporations equivalent to landlords and attorneys.
“Present federal legislation prevents these small enterprise homeowners from getting insurance coverage protection, and with out it, they’ll’t shield their property, staff, or prospects,” Menendez mentioned. “We are able to resolve this drawback with laws that enables insurance coverage firms to offer protection to those enterprises with out danger of federal prosecution or different unintended penalties.”