House Democrats are working to amend a new coronavirus stimulus bill to include protections for banks that wish to serve the cannabis industry.
The amendment, proposed by Colorado Rep. Ed Perlmutter, would allow financial institutions to serve state-legal cannabis businesses without fear of federal prosecution. The proposal is based on the Secure and Fair Enforcement (SAFE) Banking Act, a cannabis banking bill that passed the House last year, but is still mired in a Senate committee.
Federal law prohibits any financial institution from handling funds connected with the sale of illegal drugs, including cannabis. These restrictions prevent legal weed businesses from opening bank accounts, accepting credit card payments, or getting loans. As a result, pot shops are forced to conduct all of their operations in cash, making them especially lucrative targets for robberies. The cash-only nature of weed businesses has even impacted the IRS, who built new storage rooms to store all the cash from legal weed taxes.
During a recent town hall call with local Colorado businesses, Rep. Perlmutter said that lawmakers have revised the SAFE Banking Act and are working to add this revised proposal to the newest economic stimulus package. The proposal reportedly has full support from the Democratic leadership, including House Speaker Nancy Pelosi.
“We have prepared legislation that we hope will be in the next package,” Perlmutter said at the town hall, according to Marijuana Moment. “Probably not the one that’s being discussed right now, but we’ve asked for legislation to allow for banking, for SBA [Small Business Administration] lending, for testing to be part of the next package. Whether we’re going to get it, whether we can get the Senate to finally get off of their fannies and pass it, I don’t know. But you can rest assured that the issue… is front and center.”
The passage of the new bill could help cannabis businesses survive the coronavirus pandemic. Although most states now consider legal weed an essential service, many pot companies have seen their revenues fall over the course of the lockdown. These banking restrictions prevent cannabis companies from accessing loans or federal relief packages that are readily available to every other kind of business. Even companies that indirectly serve the weed industry, like accountants or lawyers, are ineligible for government relief.
“COVID-19 has made this a difficult time for all Americans, and the cannabis industry is not immune,” said Michael Correia, director of government relations for the National Cannabis Industry Association, to Marijuana Moment. “The inability for both direct and indirect cannabis businesses to access any relief funds from the Small Business Administration is unacceptable, especially when the majority of states have deemed them essential.”
Cannabis industry associations have written letters to state and federal lawmakers, urging them to grant the legal weed industry the same protections that other businesses are eligible for. Although support for the issue is growing in the House, it is still unclear whether the Republican-dominated Senate will allow the provision to pass. A group of eleven senators recently wrote a letter to the Appropriations Committee asking them to address the issue of SBA cannabis loans in a separate piece of legislation.
“Given the unprecedented government intervention in the economy to mitigate the spread of COVID-19 and the harm on businesses, it is crucial that workers and small businesses in the cannabis industry receive the same protections and resources,” said Justin Strekal, political director of NORML, to Marijuana Moment. “It’s downright cruel that a majority of states have designated the marijuana industry as ‘essential’ yet deny them access to desperately needed support.”