The U.S. House voted overwhelmingly on Wednesday to safeguard banks that serve state-legal cannabis businesses, a move desperately sought by growers, processors and retailers in Oregon and around the country who have been forced to operate largely in cash.
The Secure and Fair Enforcement (SAFE) Banking Act passed by a 321-103 count. The bill could face tough odds in the Senate, but the House action was nevertheless a remarkable step toward cannabis policy normalization in Congress, a sign of the shifting politics on the issue as more and more states legalize the drug.
“This is an $11 billion industry and growing,” Portland Democratic Rep. Earl Blumenauer, a longtime leader on cannabis reform, said on the House floor. “It’s growing because the people and states are demanding it. We need to step up and solve one of the biggest problems.”
Because cannabis is a Schedule I drug under the Controlled Substance Act, most financial institutions steer clear of businesses that deal with it, even in states where the drug is legal. That leaves the industry largely dealing in cash, increasing the risk of illegal and dangerous activity, reform advocates argue, and hindering growth.
The banking problems can also extend to businesses — legal, financial and other services — that serve the cannabis industry, even if they “don’t touch the plant,” as it’s known.
More than three dozen state attorneys general backed the measure, seeing it as a safety issue, and it had the support of banking industry groups as well.
“We are very pleased with the strong bipartisan vote to pass the SAFE Act in the House,” Linda Navarro, president and CEO of the Oregon Bankers Association, said in an email. “We hope to see the same level of support in the Senate. While this bill doesn’t by itself solve all of the challenges in banking cannabis related businesses, it is an important step forward.”
Some progressives had stepped up in the past week to question passing a bill that would aid businesses without first addressing social equity issues stemming from the war on drugs. But in the end, progressive Democrats were onboard, accepting the measure as an important first step toward equitable treatment.
Under a suspension of the rules procedure, the bill needed a two-thirds majority to pass. It easily hit the mark with a 230-1 margin among Democrats and 91 out of 193 Republicans voting aye. All five members of the Oregon delegation, including lone Republican Greg Walden, voted for bill.
In the Senate, where Oregon Democrat Jeff Merkley is the sponsor, the bill has been gaining support. Thirty-two senators have joined him as co-sponsors, including five Republicans. And it got a boost in July when the Senate Committee on Banking, chaired by Idaho Republican Sen. Mike Crapo, held a hearing on the bill.
But many wonder whether Majority Leader Mitch McConnell, the Kentucky Republican, will allow it to come to a vote.
“As with all current legislation, it doesn’t seem likely to get any daylight in the Senate,” Michael Getlin, founder of Old Apple Farm, an Oregon city grow, said. “Were it to pass however, it would really revolutionize and drastically modernize the cannabis industry. Access to safe and regulated banking would greatly decrease safety risks for current legal industry participants, put more pressure on the black market, and lead to better public safety and health outcomes.”
Blumenauer, in an interview after a vote that he called “a powerful moment for sanity,” was optimistic.
He noted that the bill includes provisions that would help hemp businesses, an important consideration in Kentucky and thus for McConnell. Plus, some Republicans, including Cory Gardner of Colorado, face tough 2020 reelection campaigns in legal states. Failing to push for the bill could be a political liability.
“There are forces at work,” Blumenauer said. “We’ve got momentum and we have a superior legislative product and we’re mobilizing.”
Merkley, in a statement, said he was looking forward to the Senate taking up the bill.
“Today, we saw overwhelming support in the U.S. House of Representatives to pass the SAFE Banking Act and get this common-sense fix into law,” he said. “Now it’s time for the Senate to act. While we continue to work to address broader issues related to the harmful legacy of cannabis prohibition across the country, I am hopeful that we can get (the bill) moving quickly through committee, to the Senate floor, and ultimately, to the President’s desk.”
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