Marijuana Businesses Fight To Be “Allowed” To Use Banks

On the eve of “4/20,” the House of Representatives gave broad bipartisan support to a bill that would finally allow state-legal marijuana businesses to access banking services.

It’s the second time the House has passed a bill to do so. Unlike in 2019, however, there is reason to believe the Senate may give the bill a warmer welcome this year.

“Passing this bill will show that Congress can work together in a bipartisan way to address outdated marijuana laws,” Rep. Ed Perlmutter (D–Colo.) said from the House floor on Monday, just prior to the vote. “I hope this bill is an icebreaker for the House to take up other reforms and finally remove the conflict between state and federal laws.”

Secure and Fair Enforcement (SAFE) Banking Act, which passed the House 321-101 on Monday evening, is in many ways the very least that Congress should be doing with regard to legalizing cannabis in America. It does not legalize or decriminalize pot at the federal level, nor does it remove cannabis from Schedule I, the Drug Enforcement Agency’s list of what it considers to be “exceptionally dangerous” substances.

But it does take a big step towards getting the federal government to butt out of transactions that are entirely legal within the 36 states where marijuana has been approved for medical use and the 16 states where recreational use is allowed. The bill would change several federal statutes so banks are no longer pressured to consider state-legal marijuana businesses unlawful.

As I wrote in a piece published Sunday as part of Reason‘s “Weed Week” coverage, most banks won’t offer services to businesses in the marijuana industry for fear of a federal crackdown—and those that do are forced to file Suspicious Activity Reports (SARs) to the Financial Crimes Enforcement Network (FinCEN), even for totally mundane, completely legal transactions.

That’s a huge barrier to starting and maintaining a business, of course. Without reliable access to banking services, cannabis businesses have to rely on wealthy investors to get started and can’t expand until they’ve establish significant cash reserves. Most transactions have to take place in cash only, which has made legal pot shops a target for crime. Even something as basic as writing to check to buy equipment can be a challenge. No other legal businesses have to operate like this.

“Prohibition is over,” Perlmutter said Monday. “The SAFE Banking Act is focused on taking cash off the streets and making our communities safer.”

The bill now moves to the Senate, where  Sens. Jeff Merkley (D–Ore.) and Steve Daines (R–Mont.) are the lead sponsors. Senate Majority Leader Chuck Schumer (D–N.Y.) has promised to tackle marijuana legalization this year, but so far he has not provided a timetable for consideration of the SAFE Banking Act or other marijuana legislation.

Another stumbling block sits in the White House. President Joe Biden remains opposed to marijuana legalization, even though new polling shows that 69 percent of all Americans (and 78 percent of Democrats) favor legalization.

Contributed by Reason.