Cannabis Groups Call on Sen. Mike Crapo to Advance SAFE Banking Act
A coalition of cannabis lobbyists has turned up the heat on Senate Banking Committee Chairman Mike Crapo (R-ID), calling on the Senator to advance a bill that would protect financial institutions working with state-approved marijuana operations.
In a joint letter penned by 33 federal and state cannabis industry groups, Sen. Crapo was urged to pass the Senate version of the Secure and Fair Enforcement (SAFE) Banking Act.
In September, the U.S. House of Representatives voted 321-103 to pass the SAFE Banking Act. As THCnet reported at the time, nearly all of the House Democrats, along with 91 House Republicans, backed the bill, paving the way for banks to conduct business with marijuana businesses in legal states without facing criminal or civil charges.
Today's letter -- was co-signed by National Cannabis Industry Association (NCIA) executive director Aaron Smith, Cannabis Trade Federation (CTF) CEO Neal Levine, as well as dozens of other federal and state trade group leaders -- asks Crapo to reconsider his proposed changes to the SAFE Banking Act that were laid out in a memo last month.
Crapo -- who opposes efforts to legalize marijuana at the federal level, as well as in his home state of Idaho – does not support the SAFE Banking Act as written and wants to prohibit banks for offering financial services to cannabis companies selling “high potency” THC products (which he defined as those containing more than 2% THC).
“Significant concerns remain that the SAFE Banking Act does not address the high level potency of marijuana, marketing tactics to children, lack of research on marijuana’s effects, and the need to prevent bad actors and cartels from using the banks to disguise ill-gotten cash to launder money into the financial system,” he wrote in the December.
The industry trade groups who penned today’s letter responded to Crapo’s proposed amendments by suggesting that if banking services were limited to businesses selling low-THC products, the illicit market would continue to thrive.
“Setting a low THC limit as a condition for obtaining banking services would have the effect of driving consumers to the illegal market, with revenue shifting from state-legal markets, which produce tens of thousands of living wage jobs and generate billions of dollars in tax revenue, to an underground economy, which produces neither,” they wrote, adding that Crapo’s potency condition would “completely undermine the purpose of the legislation, making profitable operations by state-legal cannabis businesses nearly impossible.”
The SAFE Banking Act was the first standalone cannabis bill to pass through either chamber of the U.S. Congress. The senate version of the bill (S.1200) currently has 33 cosponsors and a mere 3% chance of passing, according to GovTrack.
In their letter, the 33 cannabis advocates stressed that they were not asking for Crapo to support federal legalization.
“We are merely asking that you facilitate the availability of financial services to the state-legal cannabis industry in order to improve public safety, allow states to easily track and collect tax revenue, and assist the state-legal industry with displacing an illicit market that is currently operating free from any regulatory oversight,” they wrote.
Delivery of the letter comes one day after the U.S. House of Representatives’ Energy and Commerce Subcommittee on Health held a three-hour hearing entitled “Cannabis Policies for a New Decade.”
During the hearing, House members pressed witnesses from the Drug Enforcement Administration (DEA), the Food and Drug Administration (FDA) and the National Institute on Drug Abuse (NIDA) on the need for more robust medical marijuana research.
Several of the cannabis industry trade groups who penned today's letter to Crapo also sent correspondence to Rep. Anna Eshoo (D-CA), chairwoman of the Subcommittee on Health, and Rep. Michael Burgess (R-TX), ranking member of the Subcommittee on Health, praising their commitment to discussing the future of federal cannabis policies.
“As organizations that collectively represent thousands of state-legal cannabis businesses around the country, ancillary industries, and our communities, we applaud your decision to hold a hearing on cannabis policy so early in the new legislative session,” they wrote. “This is a wonderful opportunity to continue the robust and groundbreaking discussion on this issue that took place in Congress last year and we commend your leadership in carrying it over into 2020.”
Leaders from the NCIA, CTF, National Cannabis Roundtable, Global Alliance for Cannabis Commerce, and Minority Cannabis Business Association signed the letter to Eshoo and Burgess, and called on lawmakers to support federal policies that would “help ensure access to safe legal cannabis products.”
A press release from the NCIA is included below.
You can also view the letter to Sen. Crapo here.
Cannabis Industry Groups Urge Chairman of Senate Banking Committee to Advance House-approved Cannabis Banking Bill
More than 30 organizations co-sign a letter to Sen. Mike Crapo, underscoring their support for the SAFE Banking Act and addressing issues raised by Sen. Crapo in a December 2019 memo
WASHINGTON — A coalition of more than 30 national and state cannabis industry organizations sent a letter Thursday to Senate Banking Committee Chair Mike Crapo (R-ID), urging him to advance the House-approved version of a bill aimed at addressing the state-legal cannabis industry’s lack of access to banking and other financial services.
The House of Representatives passed the Secure And Fair Enforcement (SAFE) Banking Act by a vote of 321-103 in September, with 91 Republicans voting in favor. Chairman Crapo said he intended to have the bill considered in his committee, but also expressed concerns about the bill and other aspects of cannabis policy not related to banking. Those concerns were reflected in a memo he released in December that outlined proposed changes to the bill and requested public comment to inform his decision-making.
“Together, the undersigned represent thousands of member-businesses in the United States,” the letter reads. “We are not writing to ask you to support federal legalization. We are merely asking that you facilitate the availability of financial services to the state-legal cannabis industry in order to improve public safety, allow states to easily track and collect tax revenue, and assist the state-legal industry with displacing an illicit market that is currently operating free from any regulatory oversight.”
The cannabis industry groups express concern that some of Chairman Crapo’s proposed changes to the SAFE Banking Act would undermine its goal of improving public safety. The letter specifically addresses the senator’s suggestion that banking services might only be made available to businesses that sell cannabis products that test below 2% THC, making it nearly impossible to operate profitably.
“Setting a low THC limit as a condition for obtaining banking services would have the effect of driving consumers to the illegal market, with revenue shifting from state-legal markets, which produce tens of thousands of living wage jobs and generate billions of dollars in tax revenue, to an underground economy, which produces neither,” the letter reads. “The same is true with respect to the suggestion that banking services be denied to companies that sell vape pens or other cannabis products that adults consume. Cannabis consumers will find the products that they desire, whether those products are legal or illegal, and the recent vaping crisis in the U.S. has underscored the dangers associated with steering consumers toward an unregulated market”
The letter also highlights the growing number of states that have regulated cannabis for adult and/or medical use, and it cites the broad bipartisan support that exists for the SAFE Banking Act, noting it has been endorsed by 38 state attorneys general and a number of national and state organizations representing banks and credit unions. It concludes with a renewed commitment to work with the senator on a legislative solution to the cannabis banking problem that addresses his concerns.
“The cannabis industry stands ready to work with your office on the myriad technical issues that you have suggested should be a priority, including making certain that these products are not available to children,” the letter reads. “We urge you to work with the state-regulated cannabis industry, the financial services sector, and other interested stakeholders on a solution that supports, rather than hinders, this burgeoning industry and the will of the American public.”