As big as the marijuana industry has gotten, businesses still grapple with a basic problem: how to retain their profits. Marijuana is illegal on the federal level and banks are regulated by the federal government, so traditional financial institutions aren't an option for marijuana businesses in states that have legalized cannabis.
Because they carry so much cash, marijuana businesses are frequently the target of burglaries. In 2016, a Marine veteran was murdered during a robbery attempt at the Green Heart dispensary in Aurora.
To address safety concerns and the financial needs of an ever-growing industry, Congressmen Ed Perlmutter of Colorado and Denny Heck of Washington introduced the Secure and Fair Enforcement (SAFE) Banking Act this year. The SAFE Act would prohibit federal banking regulators from prosecuting financial institutions that service marijuana businesses.
“The potential for someone getting harmed is real,” Perlmutter told a crowd at Denver's Cultivated Synergy, a co-working space, on August 23, at a talk on the proposal. “There’s a public safety aspect to this that everyone is beginning to take seriously.”
President Barack Obama's famous 2013 Cole memo, which prohibited the Justice Department from enforcing cannabis laws in states that legalized, might have been a boon to the industry, but it stopped short of protecting banks that work with marijuana businesses. A glimmer of hope came in 2014, when the Financial Crimes Enforcement Network, a division of the U.S. Department of Treasury that combats financial crimes, issued guidelines on how banks can work with cannabis businesses if they follow certain standards. (Donald Trump's first attorney general, Jeff Sessions, rescinded the Cole memo in 2018, but the Financial Crimes Enforcement Network's guidelines are still in place.)
“Policy can be taken away since it's not law,” Perlmutter said. “It’s important to have a law so that safe harbors can’t be revoked.”
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Perlmutter and Heck have introduced some version of the SAFE Act in Congress every year since 2013. The Colorado Democrat says he became aware of the financial problems the industry faces while serving on the Financial Services Committee of the House of Representatives, a seat he still holds.
"I would bring it up in the House when I had a chance to speak," Perlmutter remembers. "At first people laughed and made jokes about the 'Rocky Mountain High,' but after a while people stopped chuckling and realized I was serious."
The House is expected to vote on the SAFE Act in September, and industry representatives are hopeful it will pass.
"Federal administrations need it to widen the door to allow businesses to operate more normally," says Mike Hayes, market leader at CannaGather, the cannabis networking organization that hosted Perlmutter's talk. "If you're a business, you need a bank. It's simple."