How Close Are We to Marijuana Business Banking?

US Cannabis Council CEO Steven Hawkins.
US Cannabis Council CEO Steven Hawkins. US Cannabis Council
Because of federal prohibition, cannabis businesses are banned from banking and financial services, putting institutions serving those businesses at risk for federal drug charges. Although smaller banks and credit unions take on that risk for high fees, the majority of legal marijuana transactions are still done in cash.

Although full-scale legalization hasn't gained the approval of Congress as a whole, banking for businesses in states with legal pot is common ground upon which the majority of federal lawmakers agree, according to the US Cannabis Council. The federal cannabis lobbying organization has been in Washington, D.C., pushing for Colorado Representative Ed Perlmutter's SAFE Banking Act, a bill that would open up banking, loans and other financial services to cannabis businesses. To learn more about the SAFE Banking Act and the obstacles in its way, we caught up with US Cannabis Council CEO Steven Hawkins.

Westword: Forms of cannabis banking legislation have passed several times in the House, but can't get a hearing in the Senate. What's holding it up?

Steven Hawkins: The House has passed the SAFE Banking Act seven times already, whether as a stand-alone bill or attached to a broader package, but every time, it’s come up short in the Senate. The bill has 42 co-sponsors in the Senate, including nine Republicans. If a vote was held today, it would sail through the Senate with a filibuster-proof majority.

That hasn’t happened yet because leading Senate Democrats hope to pass the bill as part of a broader package of cannabis reforms, including the federal legalization of cannabis. We strongly support these reforms, but believe an incremental approach is most effective. With the clock running out on this session of Congress, we’re urging senators to pass what is within reach, including the SAFE Banking Act and expungement of non-violent cannabis charges, and not allow the perfect to be the enemy of the good.

If you had to put it in percentages, what are the chances that the SAFE Banking Act is passed by both the House and Senate before the end of the year? Do midterm elections play a factor in all of this?

I don’t have a specific percentage in mind, but I believe it’s far more likely than not that the SAFE Banking Act will be passed this session of Congress, most likely as part of a broader package of reforms. The midterms are a factor primarily in terms of timing. There are very few legislative days left on the calendar, and they’re jam-packed with a broad range of priorities for congressional leaders.

But it is critical that the Senate pass the SAFE Banking Act. With each passing day, we see more armed robberies at dispensaries. As major new cannabis markets come on line in the months ahead, including New York, not having access to banking services will put cannabis operators and employees in harm’s way. That is why the US Cannabis Council is working hard to ensure passage this year.

Now that the Cannabis Administration and Opportunity Act has been introduced and there's been talk from Senator Cory Booker about a compromise, what needs to happen for a cannabis banking bill to pass?

I’ve been encouraged by the latest signs from Capitol Hill. Senators Schumer, Booker and Wyden have introduced a historic comprehensive reform bill and kicked off a national conversation about cannabis legalization. At the same time, they acknowledge there is a narrow window for advancing cannabis reform this session and appear ready to get down to brass tacks. The path ahead will require leadership on this issue from senators Schumer and Booker that includes a balanced approach and compromise on both sides. With that, we will have a very good shot at meaningful reform.

On the Democratic side, Senator Booker and others have stressed the need for criminal justice reform, including expungement of cannabis-related charges, and social equity provisions to help ensure that the communities most impacted by cannabis prohibition can gainfully participate in the burgeoning cannabis industry. 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. 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. We urge both sides to get specific and get to work on a compromise that can pass before the clock runs out.

Who benefits most from cannabis banking, independent business owners or larger companies and corporations?

Everyone in the cannabis industry would benefit, but small, independent operators would benefit the most. The reality is that most large operators have found work-arounds. They tend to be costly and inefficient, but they get the job done. Meanwhile, most, if not all, independent operators, including minority and veteran entrepreneurs, struggle with access to capital and basic services like checking and payment processing. These operators would disproportionately benefit from increased protections for cannabis banking. I should also note that businesses of all sizes struggle with the security risks posed by doing business almost entirely in cash. The SAFE Banking Act would make the industry safer for workers, operators and the community at large.

Are industrial hemp businesses affected by cannabis banking issues as well?

Hemp businesses operate under a separate legal framework than cannabis and have not been cut off from the financial system like our members have been. That said, I would expect to see carryover benefits for the hemp industry from broader acceptance of, and protections for, cannabis banking.
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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
Contact: Thomas Mitchell