As we reported last week, a Senate Banking Committee hearing occurred this past Tuesday to consider the SAFE Banking Act. In short, the hearing didn’t display as much GOP sway or support as we were hoping for.
For one, none of the Republican committee members attended the hearing aside from Committee Chairman Mike Crapo (R-ID) (which he attributed to conflicting hearings). For another, while Chairman Crapo did conclude that “a case has been made pretty strongly here,” he cautioned that it’s still a “very important and complex issue that we need to get right.”
Despite Chairman Crapo’s long faces at times, various witnesses made their cases to the Committee during the 1.5-hour hearing. Those witnesses included SAFE Banking Act sponsors Senators Cory Gardner (R-CO) and Jeff Merkley (D-OR); MAPS Credit Union Chief Risk Officer, Rachel Pross (representing CUNA), Citywide Banks’ President and CEO, Joanne Sherwood (representing ABA); Smart Approaches to Marijuana (SAM) Vice President of Government Affairs, Garth Van Meter; and LivWell Enlightened Health CEO, John Lord.
Senator Gardner called the hearing “an important step toward the federal government waking up to the reality that the cannabis issue is not going away and needs action.” He cited that polling now shows about 65% of Americans support legalization of marijuana and 93% support medical marijuana. Senator Gardner emphasized that the states are leading on this issue, “and the federal government has failed to respond.”
It has closed its eyes and plugged its ears and pretended the issue will go away. It won’t.”
Ms. Pross testified: “There are there are certainly valid concerns being brought to this committee hearing today. But the SAFE Banking Act is narrowly targeted,” she said. “It’s a narrowly targeted protection for financial institutions to serve an $8.3 billion industry that is already in place today.”
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Mr. Lord provided perspective on the significant compliance costs associated with serving cannabis customers under the present regime, citing that those financial institutions who service cannabis businesses charge them substantial monthly fees.
Our company pays in excess of $3,000 per month for the mere privilege of having an account. … The current situation is especially challenging for small businesses. While we, due to our size, are able to absorb the additional costs associated with cash management and exorbitant bank fees, many small businesses are not.”
On the opposite end of the spectrum, Mr. Van Meter testified that prioritizing marijuana banking “over science” that verifies the risks of marijuana consumption would be irresponsible.
By skipping ahead to a technicality over banking rules, the marijuana industry is hoping to gain many of the benefits of federal legalization without a debate over the public health effects. But make no mistake, a policy change around banking would have massive public policy and public health ramifications, so we are shirking our duties if we do not consider the full question. The SAFE Banking Act will allow the expansion of an industry pushing new, exponentially more powerful forms of marijuana before any of its health or other societal impacts are fully understood. Today’s marijuana is produced in concentrations that have damaging effects on the brain, are promoted by the industry, and sold in forms attractive to children.”
In response to questions following the hearing, Chairman Crapo commented that the Committee is “trying right now to see if we can find a way to address the various issues” ahead of a potential markup on the cannabis banking legislation. He also indicated he doesn’t intend to hold additional hearings on the issue.
This hearing marks the sixth congressional hearing on marijuana policy this term, following a hearing held by the House Judiciary Subcommittee on Crime, Terrorism and Homeland Security on pathways to ending the federal prohibition of cannabis. It also comes just hours after House Judiciary Committee Chairman Jerry Nadler (D-NY) and Democratic presidential hopeful Senator Kamala Harris (D-CA) announced plans to introduce a bill to decriminalize marijuana at the federal level. These certainly are all positive steps for the industry, but it remains to be seen whether anything will come to fruition.