Democrats Plan to Take Another Pass at Cannabis Banking Bill
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They are hoping a bill sponsored by Democratic and Republican senators will be more successful and finally address local governments’ concerns about crime.
Three months after marijuana banking legislation failed to be included in the federal spending package, Senate Democrats are preparing to make another run at allowing cannabis businesses to open bank accounts, a move local governments say is needed to curb crime.
State and local leaders, as well as those in the cannabis industry, were disappointed last December when Republican Senate Minority Leader Mitch McConnell blocked the provision from the omnibus spending bill. He called it one of the Democrats’ “left-wing goodies” and argued it would make the U.S. financial system “more sympathetic to illegal drugs.”
But Senate Democrats hope a new bill with enough bipartisan sponsors will lead to a different outcome this time. According to a source familiar with their plans, they intend to bring up a bill in the banking committee and then hold a vote before the full Senate later this year. A Republican Senate aide confirmed that Sen. Cynthia Lummis, a Wyoming Republican, is co-sponsoring a marijuana banking bill with Democratic Banking Chairman Sherrod Brown of Ohio. A cannabis industry source said the bill could be made public later this month.
Mayors have been pushing for the passage of a cannabis banking bill amid growing concerns over rising crime in cities. Because marijuana businesses are unable to access banking services, they are forced to handle large amounts of cash, making them targets for robberies. Since recreational marijuana is still illegal under federal law, banks cannot do business with regulated cannabis firms without risking prosecution for violating laws against "aiding and abetting" federal crimes or money laundering.
After Maryland and Missouri voters approved ballot measures in November, the recreational use of marijuana by adults is now legal in 21 states, two territories and Washington, D.C.
A similar measure, the SAFE Banking Act, passed the House with bipartisan support several times, including in a vote last year to include it in the National Defense Authorization Act. However, it was not able to pass the Senate.
A Democratic Banking Committee spokesman didn’t respond to inquiries. But Brown has expressed support for changing the banking laws. ”No matter how you feel about marijuana itself, we have a duty to look out for all the workers and communities we represent,” he said at a hearing on the issue in 2019, calling for the changes.
“Without access to the banking system, legal cannabis businesses are forced to operate in the shadows, dealing in large amounts of cash,” Brown said. “This puts a robbery target on the backs of workers and creates a safety hazard for communities. It can also make it harder to monitor transactions and combat money laundering. And getting paid in cash means it’s difficult to get a credit card, prove your income to get a loan, or even keep your personal bank account.”
Allowing cannabis businesses to open bank accounts in order to reduce the threat of crime has been supported by local officials nationally. The National Association of Counties expressed support for the measure, saying in a statement, “Access to banking institutions would mean fewer large cash transactions, which pose a threat to public safety. As it stands today, legally sanctioned cannabis businesses pay things like taxes and fees owed to the county in cash, a practice that is both logistically demanding and potentially unsafe.”
A resolution that the U.S. Conference of Mayors passed in June supporting the banking law change cited estimates by the Credit Union National Association that one out of every two cannabis dispensaries has been robbed or burglarized. The thefts ranged on average from $20,000 to $50,000.
Kery Murakami is a senior reporter for Route Fifty.
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