House leadership unveiled a coronavirus relief bill on Tuesday that includes provisions to protect banks that service marijuana businesses from being penalized by federal regulators.
Advocates, stakeholders and lawmakers have been pushing for some form of cannabis reform to be inserted into COVID-19 legislation. And this round, they were successful, with the language of the Secure and Fair Enforcement (SAFE) Banking Act making the cut.
Rep. Ed Perlmutter (D-CO), chief sponsor of the standalone bill that is being included in the new broad package, previously raised the issue in a Democratic Caucus meeting and said Speaker Nancy Pelosi (D-CA) supported it.
“The purpose of this section is to increase public safety by ensuring access to financial services to cannabis-related legitimate businesses and service providers and reducing the amount of cash at such businesses,” the text of the provision, which is attached to the 1,815-page coronavirus relief package, states.
The House passed the SAFE Banking Act last year and it’s since sat in limbo in the Senate Banking Committee. Negotiations over the bill have been ongoing, with the Chairman Mike Crapo (R-ID) recommending a series of changes, but Sen. Cory Gardner (R-CO) saying a deal was “close.”
Advocates have also been asking lawmakers to add language extending access to federal Small Business Administration (SBA) relief programs to cannabis businesses in coronavirus legislation. That didn’t pan out in this package, however.
Currently, SBA specifically prevents marijuana businesses from receiving COVID-related relief due to federal prohibition. That also includes companies that work indirectly with the industry, such as accounting and legal firms.
Rep. Earl Blumenauer (D-OR) introduced a bill last month that would fix that, calling for SBA access for cannabis businesses and ancillary companies. That came after he led a letter with 34 bipartisan members of the House urging leadership to include the policy change in future coronavirus-related bills.
Sens. Jacky Rosen (D-NV) and Ron Wyden (D-OR) made a similar request to Senate leaders in a separate letter.
The new coronavirus bill does include a section that could help people with prior convictions to become eligible for SBA’s Paycheck Protection Program (PPP).
It stipulates that the agency’s lending service “shall include a statement that an applicant is not ineligible for assistance under this paragraph solely because of the applicant’s involvement in the criminal justice system.’’
That provision seems responsive to a request that Reps. Joe Kennedy III (D-MA) and Joyce Beatty (D-OH) made in a letter to leadership last month. The pair stressed that the current policy renders even those with cannabis possession convictions ineligible for PPP.
Here’s how advocates are reacting to the news about cannabis banking being included in the COVID legislation:
“The inclusion of the SAFE Banking Act in the CARES 2 package is a positive development, but one that’s akin to applying a band-aid to a gaping wound,” Justin Strekal, political director of NORML, said in a press release. “In the majority of states, these cannabis businesses have been deemed essential during this pandemic. But at the federal level, they are being cast aside by Congress. Those small cannabis businesses facing tough economic times are essentially being told by Congress to shutter their doors and fire their employees.”
“While larger, better capitalized players may be able to weather this storm, smaller cannabis businesses may not be able to do so absent some economic stimulus,” he added. “By continuing to deny these small businesses eligibility to SBA assistance, it is possible that we could see an acceleration of the corporatization of the cannabis industry in a manner that is inconsistent with the values and desires of many within the cannabis space.”
Aaron Smith, executive director of the National Cannabis Industry Association, said “we commend the congressional leadership for prioritizing public health and safety by including sensible cannabis banking policy in this legislation.”
“Our industry employs hundreds of thousands of Americans and has been deemed ‘essential’ in most states,” he said. “It’s critically important that essential cannabis workers are not exposed to unnecessary health risks due to outdated federal banking regulations.”
Saphira Galoob, executive director of the National Cannabis Roundtable (NCR), said that “cannabis businesses are dealing with the same hardships as other small business without the same critical financial tools and reliable banking services.”
“Providing access to banking services removes some of the shackles that are holding back the full potential of the fastest growing sector of the US economy,” she said. “NCR applauds the House for acknowledging the legitimacy of cannabis businesses, and especially the work of Congressman Perlmutter who has been a tireless champion for the industry and its thousands of small businesses and workers.”
Kevin Sabet, president of the prohibitionist group Smart Approaches To Marijuana, said cannabis companies “should not be given consideration in a bill designed to help people who are suffering in this country.”
“And while it is encouraging to see Congressional leadership taking serious steps to help mitigate the impact of COVID-19, the inclusion of such a blatant giveaway to Big Marijuana—which would allow cartels and criminal syndicates to potentially access our financial —should be a complete nonstarter as the discussions over this package continue,” he said.
A House floor vote on the COVID-19 package is expected as early as Friday. It remains to be seen whether the Senate will go along with the banking provision’s inclusion.
Read the text of the cannabis banking provisions of the coronavirus relief bill below: