The Montana Senator calls for an “Army of Lobbyists” to help pass the landmark marijuana banking bill.
It has been over a decade since the first states of Colorado and Washington legalized recreational marijuana. Since then, almost half of the states in the union have passed legalization measures for adult-use cannabis. The financial impact of the burgeoning market is substantial, and analysts expect it to grow exponentially over the next five to ten years. According to the MJBiz Factbook, recreational cannabis sales topped $21.1 billion at the end of 2022. That number is projected to increase to roughly $37 billion by 2026.
Nevertheless, despite these massive monetary statistics, it is still illegal for most retail cannabis dispensaries to open a simple checking account at their local financial institution. Because marijuana is still illegal under federal law and banks must be federally insured to protect account holders, state-legal recreational marijuana businesses do not have access to the banking system to handle their daily financial transactions.
The result is a $20 billion industry run mainly on a cash-based system. This scenario presents a potentially dangerous and untenable situation for many industry stakeholders and a growing chorus of lawmakers in Congress. As first reported by NPR, there has been a surge in armed robberies at licensed marijuana retailers in the past few years due to the massive amount of cash on hand these businesses are forced to carry because of banking restrictions.
In a statement to the Associated Press, Sen. Patty Murray (D-WA), the third-ranking Democrat in the U.S. Senate, said, "It makes absolutely no sense that legal businesses are being forced to operate entirely in cash, and it's dangerous — and sometimes even fatal — for employees behind the register."
"It makes absolutely no sense that legal businesses are being forced to operate entirely in cash, and it's dangerous — and sometimes even fatal — for employees behind the register."
- U.S. Sen. Patty Murray (D-WA)
Sen. Murray is not alone regarding this ever-pressing issue, particularly for lawmakers from states where adult-use marijuana is becoming more and more of a foundational agricultural and economic element to their local and state economies. One of those motivated and passionate leaders is Sen. Steve Daines (R-MT), a member of the Senate Committee on Banking, Housing and Urban Affairs.
This week, during a speech at the American Bankers Association (ABA) Washington Summit, he outlined the next steps for hopefully passing the Secure and Fair Enforcement (SAFE) Banking Act. Working alongside Senate Majority Leader Chuck Schumer (D-NY), Daines, the lead GOP sponsor for SAFE on the Senate side, has been fervently pushing for passage of the measure for over two years.
The primary purpose of the SAFE Act is to protect banks and financial institutions that engage with cannabis-related companies within their state's lawful and regulatory frameworks by prohibiting federal regulators from penalizing those entities that choose to service these legitimate businesses. However, most importantly, the law would enable cannabis companies to operate in a safer and more trustworthy environment because they would no longer rely on an almost exclusively cash-based business model.
In his speech, Sen. Daines implored bankers to help him "unleash an army" of lobbyists to push the legislation through the Senate during this pivotal session. With their assistance, he believes the bill could pass under regular order in the Senate by maneuvering through the committee process. However, support from the ABA and its members is critical to make that hope a reality.
Daines underscored the urgent need for the passage of the bill by saying, "This bill has been out there a long time. I think with each passing year, there's a greater number of people who understand that the problem—forcing businesses to operate in all cash—is only getting worse. We need to be very clear: this is a public safety bill, and the longer we go without addressing this issue, the worse the situation on the ground becomes."
"This bill has been out there a long time. I think with each passing year, there's a greater number of people who understand that the problem—forcing businesses to operate in all cash—is only getting worse. We need to be very clear: this is a public safety bill, and the longer we go without addressing this issue, the worse the situation on the ground becomes."
- U.S. Sen. Steve Daines (R-MT)
Sen. Daines' remarks came on the same day that a coalition of cannabis industry associations, including the National Cannabis Roundtable (NCR), National Cannabis Industry Association (NCIA), U.S. Cannabis Council (USCC), Minority Cannabis Business Association (MCBA) and National Hispanic Cannabis Council (NHCC), sent a letter to Senate Banking Committee leadership, calling for immediate action on the crucial bipartisan banking legislation.
In that letter sent to Chairman Sherrod Brown (D-OH) and Ranking Member Tim Scott (R-SC), the groups urged the committee to "immediately schedule a hearing to discuss the lack of access to banking and other financial resources that is harming the U.S. cannabis industry, and advance bipartisan legislation expeditiously to improve public safety and provide much-needed access to capital to these businesses."
"(We urge the committee to) immediately schedule a hearing to discuss the lack of access to banking and other financial resources that is harming the U.S. cannabis industry, and advance bipartisan legislation expeditiously to improve public safety and provide much-needed access to capital to these businesses."
- Letter to Senate Banking Committee Leadership by Cannabis Coalition
It is quite perplexing why this vital legislation has taken so long to receive approval. Similar measures have passed in the House of Representatives on more than one occasion in the past few years.
There is also ample evidence indicating that most Americans support marijuana banking reform. This past September, an Independent Community Bankers of America (ICBA) poll conducted by Morning Consult found that 71% of voters approve of cannabis-related companies having access to the banking system.
The U.S. Senate and its ever-widening chasm of bipartisan bickering and legislative stall tactics appear to be the main impediments. However, with strong and motivated leaders on both sides of the political aisle calling for "armies of lobbyists" and immediate action to enact the legislation, there may be a glimmer of belief that this time lawmakers will do their jobs and fix a problem that only worsens with each passing day. It is imperative that they do. Livelihoods and lives are literally at stake.