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CCIA Calls For Help Supporting The SAFE Banking Act

CCIA Calls For Help Supporting The SAFE Banking Act

The California Cannabis Industry Association (CCIA) is calling for cannabis businesses to join them in imploring Speaker Pelosi to prioritize the Secure and Fair Enforcement Banking Act (SAFE Banking Act).

Click this link to add your company name and logo to the letter that will be sent to Speaker Pelosi later today. The cutoff time of today, August 4 at 5 pm is quickly approaching. Act now.

What is the SAFE Banking Act?

The SAFE Banking Act is a measure that will allow financial institutions, like banks and credit unions, and insurance providers to work with state-legal, legitimate cannabis businesses without fear of federal prosecution.

Currently, these service providers are not able to work with cannabis businesses because cannabis remains federally illegal under the Controlled Substances Act. More than 30 states, Washington D.C., Guam, and U.S. Virgin Islands have enacted either medicinal or recreational legalization amendments. Cannabis businesses deserve the same access to banking and insurance services as any other legitimate business. The federal government cannot ignore the will of the people, and lawmakers need to hear from you to know that you want them to support the SAFE Banking Act.

This is the email statement from the CCIA about the plan to send a letter:

Now is the time to raise our voices and fight for SAFE Banking on behalf of the entire cannabis community. We have a narrow window to implore Speaker Pelosi to prioritize this legislation. Please lend your name to this crucial effort by 5 pm on 8/4!

CCIA and The Liaison Group have been working tirelessly behind the scenes on SAFE Banking. Our efforts in the spring with California Delegation leaders Correa, Porter and Lieu, were crucial to SAFE making it into the Heroes Act.

SAFE Banking has passed out of the House on two occasions, the latest being part of the Heroes Act (H.R. 6800), however, this bill is yet to be passed by the Senate and signed into law. We need our leadership in California to negotiate that SAFE language remains in the COVID relief act!

We need SAFE Banking to ensure that BIPOC (Black, Indigenous, People of Color) owned businesses, especially women, have equitable access to funding and for the safety of our employees and our communities. We know that the fight for social justice and cannabis reform are deeply intertwined and that cannabis justice is racial justice. We cannot hope to repair our communities through reinvestment without the appropriate tools, including SAFE Banking.

CCIA will be submitting a letter on behalf of our members to urge Speaker Pelosi to help fight for SAFE Banking. Please use the link below to add your company name and logo by 5 pm 8/4.

https://cacannabisindustry.formstack.com/forms/ccia_safe_banking_letter

We’re in this fight together!

Below is a copy of the letter that the CCIA will send to Speaker Pelosi today:

August 5, 2020

The Honorable Nancy Pelosi 
U.S. House of Representatives 
Washington, DC 20515

Dear Speaker Pelosi:

For the safety of our employees and our communities, we the undersigned implore you to ensure the SAFE Banking Act remains part of COVID relief. As you know, the SAFE Banking passed out of the House on two occasions. The first was standalone bill H.R. 1595 and the second as part of the Heroes Act (H.R. 6800), however, this bill is yet to be passed by the Senate and signed into law. Upon reviewing the Senate response to Heroes, we were disappointed to see SAFE Banking not included, but want to make sure that this important piece of legislation is part of a final negotiated package. We need SAFE Banking to ensure that BIPOC (Black, Indigenous, People of Color) owned businesses, especially those owned by women, have equitable access to funding. Most notably, BIPOC owners who have been most adversely impacted by the pandemic compared to their white counterparts. Below are just some reasons among many that stress the importance of this relief.

  • Los Angeles’s social equity program, one of the few in the state, was designed to promote equitable ownership in the cannabis industry, but this program has had considerable challenges due to an imbalance of wealth. Although it was intended that Social Equity applicants have the opportunity to be first to market, a group of said applicants were forced to file a lawsuit to achieve fairness in a flawed process, which has now been settled. This is just the first step in an attempt to achieve equity. The majority of Social Equity applicants have not been able to afford the delayed process, nor the start-up costs associated with launching a cannabis business. 
  • BIPOC operators lack access to the capital that is essential to start cannabis businesses, so establishing loan programs would help with this burden. However, even if the SBA were to set up a loan program, this could not be effectuated without access to banks. 
  • Unfortunately, in the states that have equity programs written into their cannabis statutes, BIPOC owners fall prey to predatory business arrangements in which larger cannabis companies will be effectively running the businesses through a management services agreement while the BIPOC owner becomes a figurehead. 
  • Women and BIPOC face significant barriers to accessing investment dollars. Every year women of color get less than 1% of total venture capital funding. Further, data from 2019 indicates that only 200 Latinx and Black individuals nationwide were able to raise over $1 million in venture capital. This number is for all industries, not just cannabis. 
  • The bill is unquestionably part of a holistic approach to ending the War on Drugs, and its devastating effects on communities of color. The longer that BIPOC entrepreneurs have to wait to enter this industry, the greater disadvantage they are at because of larger companies’ ability to build their brands and customer loyalty. 
  • SAFE Banking reduces cash motivated crimes. Cannabis businesses and employees are routinely targeted, robbed, and sometimes attacked because of the large amounts of cash that they are forced to deal with.
  • Lastly, SAFE Banking as included in the Heroes Act (H.R 6800) calls for two diversity studies for the cannabis industry. While these studies will largely tell us what we currently know (that non-white representation in the industry is disproportionately low), this will create an important baseline for future conversations around legalization and ensuring the industry is equitable. 

We know that the fight for social justice and cannabis reform are deeply intertwined and that cannabis justice is racial justice. We cannot hope to repair our communities through reinvestment without the appropriate tools, including SAFE Banking. The events of recent months have shown us that this bill is more important than ever. We urge its swift passage to help our economy and our communities.

Sincerely,

Lindsay Robinson
Executive Director 
California Cannabis Industry Association (CCIA)

Conrad Gregory 
CCIA Board President 
Senior Vice President Harborside

Swetha Kaul
CCIA Board Vice President

Senate Proposed Coronavirus Relief Legislation Does Not Include Marijuana Banking Protections

Senate Proposed Coronavirus Relief Legislation Does Not Include Marijuana Banking Protections

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.

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