The Colorado Senator says the lack of cannabis banking is a “recipe for disaster”

Colorado Democratic Senator John Hickenlooper last week called for the SAFE Banking Act to be passed and said the country’s refusal to allow cannabis companies access to traditional financial services was a “recipe for disaster”.

Speaking at a virtual political conference last Wednesday, Colorado Senator Hickenlooper said federal regulations denying banking services to state-licensed cannabis companies are a magnet for criminal activity and run counter to the goals of marijuana legalization.

“If you really wanted to build an industry dependent on gangs and cartels, turn it all into money,” said Hickenlooper at the Regulating Cannabis event hosted by The Hill. “It’s almost as if the system we have now is designed to promote things that we don’t want.”

Under current federal regulations, banks are subject to money laundering and other laws for operating cannabis companies, even those that are legal under state law, forcing the licensed cannabis industry to operate in a risky environment with lots of cash. Hickenlooper, who served as governor of Colorado when state voters legalized recreational cannabis in 2012, said the cash-only system dominating the cannabis industry was “a recipe for disaster” and a “blueprint for disaster.”

“If you postpone it, the banks can start banking it so it’s no longer a cash business,” Hickenlooper said. “There are several negative consequences when it comes to a cash business. One is that companies cannot get loans themselves. “

Colorado supports the pending SAFE Banking Act

Under pending federal law, the Secure and Fair Enforcement (SAFE) Banking Act, federal banking regulators would be prohibited from penalizing banks that choose to serve cannabis companies that do business in accordance with state law. The bill was originally introduced to the House of Representatives in 2013 by Colorado Democratic Representative Ed Perlmutter, who reintroduced the bill in each subsequent Congressional cycle.

Hickenlooper noted on Wednesday that the SAFE Banking Act would not go against the “will” of states that have not yet legalized cannabis in any form, adding that the reform would benefit states that have introduced cannabis policy reforms .

“When it comes to banking, I don’t think there is any benefit in punishing the states whose citizens voted to legalize it,” he said.

In April, the SAFE Banking Act was passed as a stand-alone bill by the House of Representatives. And in September the House of Representatives approved the bill as part of a mandatory bill to approve defense spending. The House and Senate are currently working on consensus on the Defense Spending Act, leaving the fate of cannabis banking regulations in the air.

Bill has bipartisan support

The SAFE Banking Act is supported by both parties in Congress and passed by 321-10 in the House of Representatives in May with the support of 106 Republicans, including South Carolina MP Nancy Mace. Last month, Mace introduced a separate bill, the State Reform Act, that would legalize and regulate marijuana at the federal level.

“There’s nothing really controversial about cannabis, except here in Washington, where there are some members who are scared or scared of touching it,” Mace said last Wednesday. “It shouldn’t be like that.”

Mace’s bill serves as an alternative to the MORE Act, a sweeping Democratic proposal that would also legalize cannabis at the federal level. The legislation also contains far-reaching social justice provisions, including the elimination of cannabis crime at the federal level. The MORE bill would levy higher taxes than Mace’s bill, with the proceeds going to invest in communities harmed by the war on drugs.

Mace agreed with Hickenlooper that cannabis banking regulations need to be changed, saying the current system provides an incentive for criminals while putting legal business owners at risk.

“We fund the cartels by doing pure cash deals,” said Mace. “It is dangerous.”

The SAFE Banking Act is also widely supported by the governors of the jurisdictions that have legalized marijuana. In November, a bipartisan group of 24 governors from states and territories with legal cannabis sent a letter to congressional leaders calling for the law to be passed.

Governors noted in the letter that while cannabis has been legalized in some form by most states, the persistent lack of traditional banking services and large amounts of cash across the supply chain puts legal marijuana companies at increased risk of robbery and are exposed to other criminal offenses. In addition, the lack of access to credit is hampering the growth of the booming industry.

“The SAFE Banking Amendment will repair this damage and help keep communities safe in our states and territories by giving legitimate and legal cannabis companies access to banking services,” the governors wrote.