Oregon governor rejects cannabis banking law

Oregon Gov. Tina Kotek recently rejected a bill that would have created a state public bank task force. The 19-strong team would have examined the pros and cons of a cannabis business banking solution in the form of a public bank and proposed recommendations for implementation.

Major sponsors included Rep. Mark Gamba, Rep. Jules Walters and Senator Jeff Golden, who introduced House Bill 2763 in January. The bill steadily made its way through the House and Senate, passing both in late June before Kotek vetoed it on August 4.

In a press statement released July 28, setting out her thoughts on “potential vetoes,” Kotek said she had objections to HB-2763. Reason for Objection: While the governor supports consideration of establishing a state bank, this bill presents several logistical challenges, including directing the Oregon Business Development Department (OBDD), which already manages over 80 programs, a new task force to direct. Set up an RFP process and produce a substantive report in a condensed timeframe,” the statement said.

Had HB-2763 been approved, it would have examined “potential benefits and harms of the bank to state and local jurisdictions and the private sector,” “governance and corporate structures for the bank,” among other objectives. Ultimately, the task force’s investigations would have served to create a publicly controlled bank that would save public money and “spur greater economic activity in this state.” The task force would also have submitted a detailed report of its findings by September 2024 at the latest.

Additionally, both committees wanted to “…analyze challenges and barriers in providing banking services to legal adult-use cannabis companies and explore ways to enable banking services for the burgeoning cannabis industry in New York.”

Banking access for cannabis companies is a problem nationwide, and other states have attempted to legislate to keep cannabis companies safe and further legitimize the industry.

In March 2022, Pennsylvania Reps. John DiSanto and Sharif Street proposed a cannabis banking bill. “Access to financial and insurance services is critical to the operation of any business, and it is against the public interest to force a multi-billion dollar industry to trade vast amounts of cash,” DiSanto said. “The safe bank of this money in Pennsylvania provides security for businesses, represents a great opportunity for the growth of our economy, and should ultimately reduce the cost of medical cannabis users.” Former Pennsylvania Gov. Tom Wolf signed the law into law in July 2022.

Last October, Rep. Dan Donovan and former Indiana Pacers NBA athlete David Harrison proposed a banking solution called Token HiFi that would have provided a secure and reliable solution for cannabis banking services.

In December, the recent attempt to obtain the Secure and Fair Enforcement (SAFE) Banking Act was reinstated but left out of the National Defense Appropriations Act (NDAA). The Senate Majority Leader has spurred many efforts to get the bill passed, and while he faces opposition, progress continues to be made. “That’s a priority for me,” Schumer said of the bill last year. “I would like to do it. We will try to discuss the best way to achieve this.”

At the time, Republican opponents like Senate Majority Leader Mitch McConnell accused Democrats of including “irrelevant” items in the defense bill. “Even now, Democrats in the House and Senate are still hampering efforts to shut down the NDAA by trying to inject independent issues unrelated to defense,” McConnell said. “We’re talking a grab bag of various pet priorities — like making our financial system more vulnerable to illicit drugs, or the false, partisan language that allows ‘reforms’ in name only that couldn’t already pass the Senate.” .”

In early May this year, the New York Assembly’s Standing Committee on Banks and the Assembly’s Standing Committee on Economic Development, Job Creation, Trade and Industry held a hearing to discuss the benefits. “Operating a cash-only business presents challenges including security, payroll, access to credit products and record keeping,” the public hearing note said. “These challenges impact both legal cannabis businesses and banks looking to provide services.”