On Tuesday, the Senate Banking Committee (Committee) held a legislative hearing on the SAFE Banking Act, a bill that would lift the federal prohibition on cannabis banking. Most banks and credit unions refuse to service cannabis related business because the drug remains illegal under federal law. The SAFE Banking Act would create a safe harbor from federal cannabis regulations for financial institutions servicing cannabis related businesses that are compliant with state laws.
Senators Cory Gardner (R-Colorado) and Jeff Merkley (D-Oregon) testified before the Committee on the importance of the cannabis banking issue and bringing the cannabis industry into the financial system. Senators Gardner and Merkley touched on the public safety issue of an industry comprised of cash only businesses which incentivize robbery and money laundering. John Lord, a cannabis business owner, would later testify on the financial and security challenges posed to all cannabis businesses.
After the hearing, Chairman Mike Crapo (R-Idaho) said there is a “strong case to be made” for cannabis banking legislation despite lingering regulatory concerns. Chairman Crapo was the only Republican to attend the hearing, indicating a lack of interest from the Senate majority. Whether the SAFE Banking Act will have enough support to move through the Senate remains uncertain.
Some supporters of cannabis banking legislation are concerned Democrats will push for broader reforms to cannabis policy before supporting a safe harbor for the banking industry. While several Democrats in attendance were supportive of the SAFE Banking Act, Ranking Member Sherrod Brown (D-Ohio) also asked whether cannabis businesses are hiring workers with former cannabis convictions. Senator Tina Smith (D-Minnesota) also indicated the cannabis industry should be an opportunity for individuals incarcerated for marijuana use.