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Marijuana banking access may soon be a reality now that the SAFE Banking Act is included in U.S. House’s coronavirus bill, also known as the HEROES Act.
It’s a bittersweet moment as millions of Americans continue to lose their jobs, get sick, and thousands of others die while the world waits for a vaccine.
In light of the COVID-19 emergency, House leadership is seeking another round of government assistance for struggling Americans and those working with and for the cannabis industry.
What Does The HEROES Act Include?
On Tuesday, May 12th, 2020, the U.S. House’s leaders revealed an aid package called the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act. It’s a valiant effort by the House to extend stimulus benefits but may have a hard time passing the Republican-controlled Senate.
The 1,815-page bill intends to provide $500 billion in assistance to state governments, $375 billion to local governments, and $20 billion to U.S. territories. The act also includes:
- $1,200 stimulus payment per household member (up to $6,000 per household)
- $600-per-week in unemployment benefits through January 2021
- $200 billion in hazard pay for frontline workers and first responders
- $75 billion for coronavirus testing
- $175 billion in mortgage and rent assistance
Marijuana Banking Access
On page 1,066, the bill includes the SAFE Banking Act of 2020 allowing banks to work with cannabis businesses without fear of federal prosecution. The bill’s text reads:
“The purpose of this section is to increase public safety by ensuring access to financial services to cannabis-related legitimate businesses and service providers and reducing the amount of cash at such businesses.”
A summary of the bill states that the section “would allow cannabis-related legitimate businesses, that in many states have remained open during the COVID-19 pandemic as essential services, along with their service providers, to access banking services and products, as well as insurance.”
The summary also states that “This section also requires reports to Congress on access to financial services and barriers to marketplace entry for potential and existing minority-owned cannabis-related legitimate businesses.”
How We Got Here
On September 29, 2019, the House made history when they passed the Secure and Fair Enforcement (SAFE) Banking Act by a vote of 321 to 103.
While the House passed the momentous bill allowing cannabis businesses banking access, negotiations have been stalled in the Senate Banking Committee, that is until the coronavirus emergency made the relief program a more pressing issue.
Co-sponsors Ed Perlmutter (D-CO) and Denny Heck (D-WA) have undertaken this reform bill over the past six years and may soon help thousands of those working in the cannabis industry.
Legislators and Advocacy Groups Call for Small Business Aid
Recently, marijuana advocacy groups including the National Cannabis Industry Association, Marijuana Policy Project, NORML, Minority Cannabis Business Association, and many more sent a letter to Congress asking them to include a provision allowing cannabis companies to access banking services.
The letter states, “ As recent reports show that viruses can live on cash for up to 17 days, the public safety concerns of this cash-only system compound.”
“The lack of access to financial institutions places industry workers, government employees, and the public-at-large at risk as banknotes circulate from consumers and patients to business to government,” the letter continues.
Among the calls for banking access are pleads for marijuana companies to have access to Small Business Administration (SBA) relief programs. Their efforts have fallen short with the HEROES Act.
SBA relief can’t go to cannabis business owners because cannabis is still a federally prohibited substance. The SBA can’t even provide assistance for businesses that work indirectly with cannabis companies such as law and accounting firms.
Under this new stimulus package, the SAFE Banking section allows those with prior marijuana convictions to become eligible for the SBA’s Paycheck Protection Program (PPP).
Reps. Joe Kennedy III (D-MA) and Joyce Beatty (D-OH) sent a letter to House leadership last month urging them to include protections for those with past convictions including simple marijuana possession.
Congressional Resistance to Banking for the Cannabis Industry
While advocates are celebrating this small win, there’s still the issue of the bill passing the Senate, which is looking very unlikely at the moment. The SAFE Banking Act has received some heavy criticism and doubt from House and Senate members.
Mike Crapo, chairman of the Senate Committee on Banking, Housing, and Urban Affairs has proposed instituting potency disclosures and limits of 2 percent THC for products to be allowed to work with banks.
While the SAFE Banking Act may have a hard road ahead, an increasing number of legislators are jumping on board the idea of allowing cannabis businesses access to banks and reducing the obstacles preventing those with a cannabis conviction to receive government assistance.
For more of the latest cannabis news on coronavirus, legalization, and the fate of banking access for cannabis businesses, stay up-to-date with the CTU blog.
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