By Matt Whittaker / NewsBreak Denver
(Denver, Colo.) Gov. Jared Polis joined other federal marijuana reform supporters in Colorado in disappointment this week after a rider that would have made cannabis banking easier was stripped from the must-pass national defense spending bill.
That rider was the Secure and Fair Enforcement (SAFE) Banking Act, sponsored by U.S. Rep. Ed Perlmutter, a Colorado Democrat, which would prevent federal regulators from penalizing banks that provide financial services to legitimate cannabis businesses.
“Continued inaction by Congress on this important issue will further delay what the majority of Congress and we as a country know is necessary and long overdue — to finally allow legal, regulated cannabis-related businesses to have legitimate access to the banking system,” Polis spokeswoman Victoria Graham said.
Most marijuana businesses cash only
Despite many states legalizing weed in some form, the drug is still illegal at the federal level, where banking laws are set. That leaves banks open to the risk of being charged with money laundering or aiding and abetting a federal crime.
While there is a loophole allowing marijuana banking if the lender files certain paperwork with each transaction, that requirement is so onerous that most banks simply stay away from the industry. Those who are willing can charge more than a $1,000 a month for a simple checking account for a cannabis business, placing mom-and-pop marijuana shops at a disadvantage to big multi-state operators.
Without access to the debit card system, dispensaries and grow operations in Denver and elsewhere in the nation have to do business in cash, leaving them especially vulnerable to burglaries and robberies such as those plaguing California cannabis businesses. In Colorado, Metro Denver Crime Stoppers is offering a reward of up to $55,000 in an unsolved case from 2016 when police say a 24-year-old security guard at a dispensary in Aurora was shot and killed during an attempted robbery.
Languishing in the Senate
The SAFE act aims to prevent such violence by allowing more cannabis businesses into the formal banking system so customers can use debit cards.
Perlmutter hoped attaching the bill to the National Defense Authorization Act of 2022 would help usher it into law, but this week a committee decided to remove it before the full chamber passed the spending bill.
The House has passed the marijuana legislation in some form five times, but the Senate has never taken it up for a vote. Perlmutter said he would keep working to turn the bill into law.
“People are still getting killed and businesses are still getting robbed because of a lack of action from the Senate,” Perlmutter said. “The SAFE Banking Act has been sitting in the Senate for three years and with every passing day, their unwillingness to deal with the issue endangers and harms businesses, their employees and communities across the country.”
Legalization advocates disagree on SAFE act
In addition to many marijuana reform advocates, banks are also in favor of the SAFE act. After all, the legal cannabis industry is lucrative. Colorado alone brought in nearly $2.2 billion in marijuana sales last year, according to the state’s revenue department.
“The increased transparency that would come from processing transactions through bank accounts instead of all cash would ensure that regulators and law enforcement have the necessary tools to identify bad actors and remove them from the marketplace,” the American Bankers Association said in a letter asking Senators to include the SAFE act in the defense spending bill.
There is even broader support among the general public, with a Gallup poll showing 68% of Americans support outright legalization of the drug.
With such broad support, politicians that hinder national cannabis reform are making a strategic misjudgment, said Truman Bradley, executive director of the Wheat Ridge-based Marijuana Industry Group, a trade association for Colorado cannabis businesses.
“It’s disappointing, and politically it’s a mistake,” he said of the SAFE act not being included in the defense bill. “Nationally, cannabis continues to set records for public popularity.”
In Colorado last month, voters said “no” to initiatives that would have raised taxes on marijuana retail sales. One state proposition would have used the funds to create an out-of-school educational program, and a Denver initiative would have spent the money on pandemic research, preparedness and recovery.
“Colorado voters are paying attention, and they view the industry as a valuable community partner,” Bradley said.
Not all legalization advocates supported the SAFE act.
The Drug Policy Alliance instead favors a broader bill called the Marijuana Opportunity Reinvestment and Expungement (MORE) Act that would remove marijuana from its place alongside heroin in the Controlled Substances Act.
“By slipping SAFE into the Defense Authorization bill ahead of moving the MORE Act, Congress is sending a clear message that the industry and huge multi-state operators take precedent before the countless people that have had their lives devastated by punitive and racially-motivated drug policies,” the group tweeted before the SAFE act was stripped from the defense spending bill.