On Monday, the Republican-controlled Senate rolled out new Coronavirus relief legislation—a counteroffer to the $3.4 trillion package unveiled by House democrats back in May. The Senate’s relief bill comes with a much smaller price tag of only $1 trillion dollars, which it achieves by slashing much of the benefits proposed by the House.
In addition to the dramatic cuts to the weekly enhancements of state unemployment benefits and safety net programs proposed in the House’s version (The HEROES Act), the Senate’s package does not include language that would protect banks who service the legal cannabis industry.
SAFE Banking Act
The Secure and Fair Enforcement (SAFE) Banking Act, which was originally proposed as a standalone bill sponsored by Rep. Ed Perlmutter (D-CO), would allow legitimate legal cannabis businesses access to financial services regardless of federal prohibition. Despite being initially approved by the house months ago, the Senate Banking Committee has continued to take no action on the bill. In order to circumvent the Senate Banking Committee, House Democrats included a version of the SAFE Banking Act in their Coronavirus relief bill.
According to the summary provided in the HEROES Act, the SAFE Banking 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 executive director of the National Cannabis Industry Association, Aaron Smith, tweeted out his approval of SAFEs inclusion in the House’s relief bill, stating: “On behalf of the legal cannabis industry, we commend the congressional leadership for prioritizing public health and safety by including sensible cannabis banking policy in this legislation.”
Criticism From Senate Republicans
Despite the fact that forcing essential businesses to continue operating as cash-only during a global pandemic seems counterintuitive to stopping the spread of the virus, Senate Republicans have leveled criticism at the addition of marijuana banking protections to the Coronavirus relief bill.
Senate Majority Leader Mitch McConnell has been particularly vocal about his opposition to including protections for cannabis businesses in any relief package, stating: “I am opposed to non-germane amendments, whether it’s funding for the FBI building…or other non-germane amendments in the House bill like marijuana studies or aid to illegal immigrants…”
McConnell’s disapproval is not only aimed at the germaneness of the SAFE Act being included in the House’s relief legislation, but also at the diversity report provisions that it contains. Back in May, McConnell gave a speech on the Senate floor where he responded to the passing of the House’s HEROES Act. During it, McConnell sardonically referred to the section on marijuana banking protections as “the cherry on top.”
He continued in a similar tone: “Let me say that again, Democrats’ proposed coronavirus bill includes taxpayer-funded studies to measure diversity and inclusion among the people who profit off of marijuana.”
The Future of the SAFE Banking Act
As of now, it is unclear whether or not House Democrats will push for a section on cannabis banking protections to remain during the upcoming bicameral negotiations that will take place to merge the two chambers bills into one.
As for the Standalone bill, there is no reason to think the Senate Banking Committee will take further action any time soon.
One of the most important pieces of cannabis-related legislation, the Secure and Fair Enforcement Banking Act (SAFE Banking Act), has the chance to be included in the next round of COVID-19 relief legislation in the United States. The House approved the inclusion in May when representatives passed the Health and Economic Recovery Omnibus Emergency Solutions Act (HEROES Act), and it will soon be the Senate’s turn.
The United States Senate has never approved legislation regarding banking services for cannabis businesses before. Many Senators may not have the spirit or understanding to make sure this legislation is enacted, so they need to hear from you, the constituents. Now is the time to contact your Senators. Tell them to support the inclusion of the SAFE Banking Act. Click here to find the contact information for your state’s Senators, and send them an email telling them to support the SAFE BANKING Act. Don’t wait. It only takes a few minutes to voice your opinion. Your letter may be the one to sway the vote.
Are you unsure of what to write? Below is a great sample script from NORML that you can copy and paste into your email. You can also click here to be redirected to NORML’s website where all you have to do is enter your information and it will send your state’s Senators this exact email for you.
I urge you to support the Secure and Fair Enforcement Banking Act (SAFE Banking Act), HR 1595 / S. 1200, to allow state-licensed marijuana-related businesses to engage freely in relationships with banks and other financial institutions.
Presently, more than 30 states authorize the licensed production and dispensing of medical cannabis. ten states permit similar commercial activities and retail sales of marijuana to all adults. Yet, thousands of these licensed and regulated businesses do not have access to the banking industry and are unable to accept credit cards, deposit revenues, or write checks to meet payroll or pay taxes. This situation is untenable. No industry can operate safely, transparently, or effectively without access to banks or other financial institutions.
Congress must move to change federal policy so that these growing number of state-compliant businesses, and their consumers, may operate in a manner that is similar to other legal commercial entities.
Allowing tightly regulated marijuana businesses the ability to access the banking system will help reduce the threat of crime, robbery, and assault in our communities and keep the cash out of cartels. I urge you to support and cosponsor The SAFE Banking Act.
Why is the SAFE Banking Act so important?
While cannabis remains federally illegal as a Schedule I drug under the Controlled Substances Act, 33 states and Washington D.C. have enacted laws legalizing the medical and/or recreational use of the plant. Schedule I drugs are considered to be the most dangerous of all substances, and they are described as “drugs with no currently accepted medical use and a high potential for abuse.” Methamphetamine and cocaine are categorized as Schedule II substances, meaning they are technically defined as being less dangerous and less addictive than marijuana.
The fact that cannabis and tetrahydrocannabinol (THC) are listed among the ranks of ‘most dangerous’ with heroin and methaqualone (Quaaludes) simply does not make sense when there are more than four million registered medical marijuana patients in the United States, and the majority of Americans are in favor of legalization. Nonetheless, financial institutions and insurance providers are federally regulated, so they simply cannot work with cannabis businesses at this time without risking their operating licenses or federal prosecution. The SAFE Banking Act would greatly improve this situation.
Hundreds of thousands of Americans in more than half of the United States are working within a state-regulated, legitimate industry which generates billions of dollars in tax revenue each year, yet these businesses are denied these imperative services. This is not right. It is not fair, and it needs to change.
This also means that cannabis businesses and their employees, which were deemed ‘essential’ like grocery stores and pharmacies in nearly every state in which they operate, were denied access to the federal Payment Protection Program (PPP).
Dangers of Cash Only Operations
When a business is denied access to regular banking services like processing debit and credit cards or writing checks, it leaves them vulnerable. Without a business bank account, state-regulated dispensaries, cultivators, and product producers are forced to operate only in cash. Having large amounts of cash on hand makes these businesses targets for armed robbery which on more than one occasion has resulted in the death of employees.
In the times of the COVID-19 pandemic, just handling cash is also potentially dangerous. While it is thought that the virus is most easily spread from person to person, the Centers for Disease Control and Prevention (CDC) warns that it is possible to catch it from handling infected items like cash.
Contact Your Senators
It is imperative that you communicate with your Senators. Without hearing from you, the people they represent, they may not know how many people support the SAFE Banking Act. If you want to write an email or make a quick call, click here to find the contact information for your state’s Senators. Many Senators are also active on Twitter, so Tweet at them if that is your preferred method of communication.
Earlier this week, MassRoots obtained a loan under the Paycheck Protection Program (“PPP”), which has been critical to ensuring our employees are paid their regular salaries so they, in turn, have the money they need to support their families, cover medical bills, and pay rent. We believe that all cannabis-related businesses, both plant-touching and ancillary, should be able to obtain PPP loans in order to support the hundreds of thousands of employees that comprise the regulated cannabis industry.
Paycheck Protection Program Equality
We’re asking our supporters, both individuals and businesses, to take the following steps to raise awareness and help cannabis businesses obtain equal access to PPP funding:
- Tweet the reasons you support #PPPEquality to @realDonaldTrump, @PressSec and your Senators and Congressmen.
- Email the White House and President Trump’s campaign in support of #PPPEquality at [email protected] and [email protected].
- Call the White House at 202-456-1111 and your Senators and Congressmen in support of equal access to PPP funding.
- If you’re employed in the cannabis industry, please record a video testimonial on how PPP funding would impact your life. You can submit it here or Tweet it, tagging @realDonaldTrump, your Senators and Representatives, and using #PPPEquality.
- Post on Instagram, tagging the White House and your representatives, using #PPPEquality on the reasons why you support cannabis businesses having equal access to PPP loans.
Why is structural reform necessary?
When the U.S. federal government signed the Coronavirus Aid, Relief and Economic Security (CARES) Act into law on March 27, 2020, one of the measures included in the bill was the Paycheck Protection Program. The PPP is designed to help small businesses and their employees survive during the stay-at-home orders and trying times of the pandemic, which is affecting businesses from all markets.
The PPP website describes the initiative as:
“An SBA loan that helps businesses keep their workforce employed during the Coronavirus (COVID-19) crisis,” and “a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll.”
While cannabis remains illegal at the federal level, under the Controlled Substances Act, and the new law denies money from the CARES Act to businesses that are federally illegal, these businesses are not operating illegally at the state level. They are tightly regulated by the individual states.
Law-abiding, regulated cannabis businesses, whether plant touching or ancillary, and their employees should be granted the same access to government assistance as any other legally-operating business.
Now is the time to tell the U.S. government that you think the Paycheck Protection Program should be expanded to include cannabis businesses. Stand up for #PPPEquality with us and all of the other small businesses that make-up the regulated cannabis industry in the United States.