RCRC strongly supports the Secure and Fair Enforcement Banking Act of 2019 (Safe Banking Act), authored by Representative Ed Perlmutter (D-Colorado) and Representative Denny Heck (D-Washington). The Safe Banking Act would liberalize federal banking laws to allow cannabis-related businesses access to financial services. 106 members have signed on to co-sponsor the bill. Eight Republicans are co-sponsoring the bill which is a sign of growing support among conservatives.
Cannabis remains illegal under the federal Controlled Substances Act, despite decriminalization and legalization in some form in at least 47 states. It has become apparent there is a need to align federal and state laws when it comes to cannabis operations accessing the banking system. Unfortunately, due to federal statutes, financial institutions turn away legitimate marijuana businesses to avoid the risk of federal prosecution and the loss of assets within a financial institution.
Access to banking remains one of the most significant hurdles facing the cannabis industry and state and local regulatory authorities. In essence, all cannabis-related financial activities are conducted in cash which translates into counties receiving property tax payments in cash, as well as any local regulatory fees and taxes. The current all-cash business also makes it extremely difficult to audit cannabis operators, as well as ensure compliance with various rules and regulations. Most importantly, the all-cash status presents enormous security challenges to all parties involved in the cannabis industry. The Safe Banking Act would lift the federal prohibition on cannabis-related businesses for the financial services industry.
Last month, Congress held its first ever hearing on the cannabis banking issue in the House Financial Services Committee. The issue is a legislative priority for rural California, and was one of the topics that RCRC’s senior leadership addressed during their recent visit to the nation’s Capital. RCRC’s support letter can be accessed here. For more information, Paul A. Smith, RCRC Governmental Affairs Vice President, can be reached at (916) 447-4806 or email@example.com.