The Senate must act on legislation clarifying cannabis banking rules 

Members of the U.S. Senate Committee of Banking, Housing and Urban Affairs are scheduled to discuss legislation tomorrow, the Secure and Fair Enforcement (SAFE) Banking Act, that seeks to normalize relations between state-licensed cannabis businesses and financial institutions.

The advancement of the SAFE Banking Act is crucial to the health and safety of the tens of millions of consumers who patronize state-legal cannabis markets. That is because, under current federal law, the multi-billion-dollar state-legal cannabis market must operate largely as a cash-only business. This makes state-licensed cannabis businesses more susceptible to theft and it makes these establishments more difficult to audit. It also places the safety and welfare of their customers at risk, as patrons must carry significant amounts of cash on their persons to make legal purchases at retail facilities. Similarly, it needlessly jeopardizes the safety of retail staffers, who are susceptible to robbery.

To date, 22 states permit retail cannabis sales to adults and 38 states authorize the sale of medical cannabis products. Yet, these tens of thousands of state-licensed businesses continue to struggle to legally obtain a bank account because of outdated federal policies. According to statistics provided by the Treasury Department, only about 11 percent of all U.S. banks and about four percent of all credit unions are “actively providing banking services to marijuana-related businesses.” This lack of access to financial services hinders these businesses’ abilities to gain a market foothold and further disrupt the unregulated, underground marketplace.

Every day that Congress fails to act endangers the livelihood of these small businesses and their cusomers, puts local regulators and law enforcement at a disadvantage and facilitates the activities of unlicensed operators and criminal organizations. Survey data compiled last year by Whitney Economics reported that over 70 percent of participating cannabis businesses say the “lack of access to banking or investment capital” is their top challenge.

Passing the SAFE Banking Act will address these problems. That is why it is supported by businesses, voters and civil rights groups. Polling data shows that 72 percent of voters — including nearly two-thirds of Republicans — support allowing licensed cannabis businesses to lawfully access U.S. financial systems. 

The NAACP also backs this legislative change, stating, “The SAFE Banking Act could enable cannabis businesses with social equity licenses, diverse ownership licenses, or other licenses made available by states with medical- and adult-use cannabis laws that aim to foster a diverse and equitable industry, to better compete in the industry.” So does the American Bankers Association, which recently opined that the legislation’s passage is “urgently needed … to provide legal and regulatory clarity” for banks and for members of law enforcement.

In short, no industry can operate safely, transparently or effectively without access to banks or other financial institutions and it is self-evident that the players in this industry (smaller and minority-owned businesses in particular), and those consumers that are served by it, will remain severely hampered without better access to credit and financing.

Ultimately, Congress must amend federal policy so that these growing numbers of state-compliant businesses, and those millions of Americans who patronize them, are no longer subject to policies that undermine their ability to conduct transactions safely and effectively.

Paul Armentano is the deputy director of NORML, the National Organization for the Reform of Marijuana Laws.