House Democrats said Wednesday they believe Donald Trump would sign into a law a bill allowing banks to accept accounts from cannabis businesses without fear of penalty, but much more has to be done before the marijuana industry’s cash-only days can come to an end.
For starters, they have to introduce a bill.
More than $3 billion worth of legal marijuana was sold in the United States last year, and nearly all of those transactions, and the businesses’s subsequent tax payments to the state and federal governments, were in cash.
Cash is king in cannabis, because financial institutions have been warned not to take cannabis business accounts and have — so far — obeyed this direction. As a result, marijuana dispensaries have had to hire armed guards and armored cars to make their quarterly tax payments, and marijuana consumers have become accustomed to enormous ATM withdrawals and attendant fees every time they’d like to purchase some legal weed.
Any fix to this has to come from Congress, and now that Democrats control the House, there is at least a glimmer of hope that something will be done.
New Momentum or More of the Same?
On Wednesday, a subcommittee of the House Financial Services Committee heard testimony on a proposed bill, from Democratic Congressmen Ed Perlmutter and Denny Heck and Ohio Republicans Steve Stivers and Warren Davidson, that would end this silliness.
Heck and Perlmutter put on a brave face despite some vocal opposition from their Republican colleagues, whose objections centered around the fact that marijuana is not yet federally legal. Paraphrasing slightly, the naysayers argued that allowing state-compliant cannabis businesses to bank would somehow promote illegal activity.
In response, Heck and Perlmutter (rightly) pointed out that these businesses are already here, and allowing some transactions to go on in a format other than cash is a safety issue.
And Congressional opposition can be overcome. There may even be support from within the Trump Administration (!). In a conference call with reporters after Wednesday’s hearing, Heck claimed that back when Mick Mulvaney, the president’s acting Chief of Staff, was still a Republican congressman from South Carolina, Mulvaney “signaled his support” for some kind of banking reform. That’s not exactly a promise you can take to any kind of bank, but it’s slightly more than nothing.
But before that can happen, there is much sausage to be made. To torture the analogy, Perlmutter and Heck have yet to even begin to grind the meat.
Wednesday’s hearing was on a bill that, as of yet, is not even actually and officially a bill. The pair first introduced the Secure and Fair Enforcement Banking Act (SAFE Banking Act) way back in 2017. That was back when Republicans controlled the House of Representatives and were so interested in giving marijuana the time of day that they—somehow! Oops!—neglected to call the bill for a hearing.
As Ryan Donovan, a lobbyist for the Credit Union National Association, told MarketWatch, the hearing “is part of an effort to try to generate some momentum in the House of Representatives.”
One roadblock is that Congress is in shutdown mode lately, what with the president still unable to convince Congress that paying $5.7 billion for a border wall with Mexico is a good idea. Marijuana reform may have to wait for a “normal legislative environment,” Donovan said. As for when that will be? It’s anyone’s guess.
TELL US, does your representative support the SAFE Act?