Dive Brief:
- The Senate Banking Committee on Thursday will discuss a bipartisan cannabis banking bill that would provide protections for banks that serve legal marijuana-related businesses.
- The scheduled hearing follows last week’s reintroduction of the Secure and Fair Enforcement (SAFE) Banking Act in the House and Senate. While the legislation has passed the House seven times, the Senate has yet to hold a vote on the measure.
- Lawmakers behind the latest version of the bill say the revised text addresses the social equity issues that some key Senate Democrats say SAFE Banking has lacked in previous years.
Dive Insight:
Thursday’s hearing, titled “Examining Cannabis Banking Challenges of Small Businesses and Workers,” will feature testimony from Sens. Jeff Merkley, D-OR, and Steve Daines, R-MT, the two Senate lawmakers, who, along with Reps. Dave Joyce, R-OH, and Earl Blumenauer, D-OR, reintroduced SAFE Banking last month.
Proponents for SAFE Banking say the bill addresses safety issues that plague the cash-heavy cannabis industry, a space many banks have been reluctant to serve due to marijuana’s status as a Schedule 1 drug.
“Right now, legal cannabis businesses are forced to operate entirely in cash,” Merkley tweeted last week. “It’s a dangerous system — ripe for robbery, assaults, tax fraud, and money laundering. If you care about public safety, cash is a terrible system.”
While the cannabis industry and bank trade groups have been some of the strongest supporters of SAFE Banking in recent years, the bill has faced opposition from lawmakers who argue the legislation is too narrow and only serves the interests of the business community.
Merkley sought to assuage those concerns last week.
“Cannabis reform needs to be rooted in restorative justice,” he tweeted. “The SAFE Banking Act of 2023 includes expanded equity provisions, and I’m going to be pushing to pair it with funding for states that choose to expunge cannabis records as part of a final package.”
Senate Majority Leader Chuck Schumer, D-NY, who expressed support for the bill last week, also vowed the legislation would encompass broader cannabis reform.
“I’m making it a top priority to ensure it contains social equity provisions to undo harm caused by the War on Drugs,” he tweeted.
The 2023 version of the SAFE Banking Act extends protections to community development financial institutions and minority depository institutions that serve cannabis businesses.
Lawmakers also added a provision that gives cannabis industry workers access to federally backed mortgage loans.
Another social equity aimed provision included in the bill would require the Government Accountability Office to conduct a study on the barriers minority-owned businesses face when entering the cannabis market.
The Senate Banking Committee’s decision to take up the bill follows concerns the committee’s chair expressed last week.
“I’m always skeptical when bankers come to us and try to use bills like this to weaken bank rules, to undermine safety and soundness,” Sen. Sherrod Brown, D-OH, told NBC News.