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A bipartisan coalition of two dozen governors is urging congressional leaders to finally pass marijuana banking reform through large-scale defense legislation.
In a letter sent to key House and Senate lawmakers on Tuesday, state officials said the Safe and Fair Banking Law (SAFE) should be attached to the must-see National Defense Authorization Law (NDAA ). The House has already approved his version and included the banking legislation, but it is uncertain whether the Senate will follow suit.
Colorado Governor Jared Polis (D) led the letter, which is also signed by the governors of 22 other states and territories, as well as the mayor of Washington, DC.
He says the SAFE Banking Act “will allow cannabis companies to access normal banking services, which will allow cannabis transactions to be transferred entirely in cash into the financial system to which they belong.”
âThirty-seven states, four US territories and the District of Columbia have adopted some form of legalization of cannabis for recreational or medical purposes,â the governors wrote. “Sales of medical and recreational cannabis in the United States were estimated at $ 17.5 billion last year, but due to archaic federal banking regulations almost all cannabis transactions are in cash.”
Rep. Ed Perlmutter (D-CO) is the primary sponsor of the House’s stand-alone banking bill, which would protect financial institutions that serve a state’s legal marijuana businesses from being penalized by federal regulators. It has been adopted by the chamber in one form or another five times so far, along largely bipartisan lines.
“Not only are cash-only businesses a target for crime, but cannabis businesses are even more at a disadvantage compared to other legal businesses by being unable to open bank accounts or obtain loans at reasonable rates. “, indicates the letter. “The cannabis industry is legal in one form or another in the majority of states in the United States and it is too large a market to be barred from banking opportunities.”
âThe SAFE Banking Amendment will remedy this damage and help keep communities in our states and territories safe by allowing legitimate and legal cannabis companies to access banking services. Financial institutions will subject funds and account holders to stringent anti-money laundering and âknow your customerâ requirements that will further help states where cannabis has been legalized keep bad actors out of the system . The SAFE Banking Amendment will also harmonize federal and state laws to ensure that deposit-taking institutions that provide banking services to legitimate cannabis-related businesses and ancillary businesses are not penalized. “
But the governors’ call for marijuana banking reform is notable for several reasons.
First, this is the latest development in an ongoing debate over cannabis policy priorities in Congress, where some members, especially in the Senate, have insisted on passing full legalization first before enacting anything. which is considered largely favorable to the industry.
Second, state officials are specifically calling for reform to be included in the NDAA, which is seen as a potentially more feasible vehicle compared to Senate approval of the stand-alone SAFE Banking Act.
Senate Majority Leader Chuck Schumer (D-NY), who is championing a legalization bill that will be officially introduced soon and strongly supports ending the ban holistically before putting the bank on the ground, has left the door open for approval of the more modest policy change through the NDAA as long as certain social equity components are attached.
The governor of Schumer State, Governor Kathy Hochul (D), is among the signatories of the new letter.
âSimply put, this is a public safety issue that Congress has a responsibility to resolve. The SAFE Banking Act has now been passed five times by the US House of Representatives, but the Senate has never voted on the measure, âthe governors wrote. “The SAFE Banking Act enjoys more bipartisan support than ever before and Congress must take action to ensure that this measure is included in the final version of the NDAA that will be forwarded to President Biden’s office.”
Once again, however, there is debate among lawmakers and advocates as to whether the banking industry needs to move forward first before Congress completely ends the ban and enacts policies focused on social justice.
Senator Cory Booker (D-NJ), who is working alongside Schumer on the legalization bill being finalized, has made it clear that he intends to fight if the Senate decides to pass the SAFE Banking law first.
Booker’s home state Governor, Governor Phil Murphy (D) also signed the new letter calling for immediate action on cannabis banks.
Other signatories to the letter include the bipartisan governors of Alaska, California, Connecticut, Guam, Illinois, Maine, Massachusetts, Michigan, Minnesota, Nevada, New Mexico, from North Dakota, Oregon, Pennsylvania, Rhode Island, US Virgin Islands, Utah and Virginia. , Washington State and Wisconsin.
“It is time for Congress to allow cannabis-related businesses to have better access to the banking system and operate with normal bank accounts,” Polis, the governor of Colorado, said in a press release. “After years of legalizing cannabis in a multitude of states, it is high time that cannabis companies finally operate financially alongside other companies in the open national banking system.”
A group of small marijuana business owners also recently argued that the gradual change in banking policy could actually help support social equity efforts.
Rodney Hood, a board member for the National Credit Union Administration, wrote in an editorial in Marijuana Moment last month that legalization is inevitable and that it makes more sense for government agencies to advance policy change to solve banking complications now. .
Meanwhile, an Internal Revenue Service official said last month the agency would like to “get paid” and that would help if the marijuana industry had access to banks like businesses in other markets. legal so that they can more easily comply with tax. laws.
Federal data shows that many financial institutions are still reluctant to take cannabis companies as customers, which is likely because the plant is a strictly controlled substance under federal law.
Read the Governors’ Letter on Congressional Marijuana Banking Law below:
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