Colorado Government

Fresh Off Biden Pot Pardons, Polis, AG and Treasurer Call for Marijuana Banking

Because of federal prohibition, marijuana-related businesses are banned from financial services.
Because of federal prohibition, marijuana-related businesses are banned from financial services. Jacqueline Collins
Less than a week after President Joe Biden announced that his administration would pardon thousands of federal marijuana convictions, Colorado political leadership is calling on Congress to consider more reform.

Governor Jared Polis, Lieutenant Governor Dianne Primavera, Attorney General Phil Weiser, Treasurer Dave Young and Colorado Department of Public Safety Executive Director Stan Hilkey sent a joint letter to congressional leaders on October 10, urging them to push through legislation that would allow financial institutions to service the pot industry.

The move comes four days after Biden announced that federal marijuana possession convictions dating back to the ’70s would be vacated and that his administration would "review" the plant's Schedule I status. Marijuana and criminal justice reform advocates had been calling for mass pardons for years, but Colorado elected officials have been vocal about their desires for marijuana banking access just as long, if not longer.

Because of federal prohibition, marijuana-related businesses are banned from financial services, putting banks serving those businesses at risk of federal drug charges. Although some smaller banks and credit unions will take on that risk for high fees, the majority of legal marijuana transactions are still done in cash.

Congressman Ed Perlmutter's Secure and Fair Enforcement (SAFE) Banking Act has been on the legislative table since 2013, but the bill didn't pass the U.S. House of Representatives until 2019. Since then, Polis, Weiser and Young have issued numerous statements in support of the SAFE Banking Act, as have senators John Hickenlooper and Michael Bennet. Colorado officials haven't been alone, either, with elected politicians in Oregon, Washington and states newer to marijuana legalization also consistently pressing Congress for pot banking.

Despite finding support in the House, the SAFE Banking Act hasn't received a hearing in the Senate, with Majority Leader Chuck Schumer preferring his own Cannabis Administration and Opportunity Act, which would decriminalize the plant nationwide. However, Polis and company don't believe that Schumer's bill has a realistic chance of passing right now, according to the letter.

"The House of Representatives has now passed the bipartisan SAFE Banking Act seven times. The Senate similarly reflects a strong showing of bipartisan co-sponsors, with 31 Democrats, nine Republicans, and two Independent co-sponsors," the letter reads. "We applaud and support larger efforts between the House and the Senate to address legalization and reform nationally. However, we understand such efforts continue to be ongoing and that the pathway toward enactment is uncertain at this time. Therefore, given the demonstrated broad support for the SAFE Banking Act, coupled with the undeniably strong public policy demands for the immediate relief this legislation will provide, we strongly urge you to take action now and ensure that licensed cannabis businesses have access to banking and financial services."

Forcing the marijuana industry into a mostly-cash world creates more barriers for small business owners and a target for crime, as well, according to the letter.

"There are currently 208 medical and retail cannabis storefronts in Denver alone, the city with the highest number of licensed retailers in our state. In 2021, those stores generated more than $689 million in sales. However, our cannabis businesses still rely largely on cash transactions. With this spike in business, the individuals who work behind the counters have increasingly become targets for armed thieves," the letter reads.

According to an annual marijuana impact report compiled by the Denver Department of Excise and Licenses, burglaries associated with commercial marijuana rose from 122 in 2019 to 175 in 2020. Despite comprising under 1 percent of all businesses in Denver, marijuana enterprises accounted for 8.6 percent of all reported business burglaries in 2020, the department noted.

"The SAFE Banking Act offers a pathway to address this specific and urgent need by encouraging financial institutions to offer cashless payment options to cannabis retailers, such as credit and debit card processing," the letter points out.

There was a renewed sense of cautious optimism for SAFE Banking's future after New Jersey Senator Cory Booker, a prominent supporter of Schumer's bill, recently said that he would support SAFE Banking if it carried more financial and legal benefits for communities harmed by the War on Drugs. However, this expanded form of SAFE Baking, dubbed SAFE Banking Plus, may see some pushback from Republicans, according to the US Cannabis Council, a federal cannabis lobbying organization.

"On the Republican side, there is support for banking reform and expungement, but a strong aversion to what many view as government interference in, and encouragement of, the cannabis industry," US Cannabis Council CEO Steven Hawkins says. "The challenge for senators is to settle on a 'SAFE Banking Plus' package that will meet the needs of Democrats without losing Republicans. It’s not easy, but it’s doable."
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Thomas Mitchell has written about all things cannabis for Westword since 2014, covering sports, real estate and general news along the way for publications such as the Arizona Republic, Inman and Fox Sports. He's currently the cannabis editor for westword.com.
Contact: Thomas Mitchell

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