A subcommittee of the U.S. House Committee on Financial Services met today to discuss reforming federal banking regulations so that they can better accommodate cannabis businesses.<\/p>\n
With six experts from across the country testifying on the banking challenges facing cannabis companies, the hearing before the Consumer Protection and Financial Institutions Subcommittee provided a stark contrast between predominately Democratic representatives who expressed their support for passing quick legislation to give a safe harbor to banks working with cannabis businesses \u2014 and Republicans who warned of \u201cputting the cart before the horse\u201d and creating further confusion.<\/p>\n
Rep. Ed Perlmutter, a Democrat from Colorado, spearheaded the effort behind Wednesday\u2019s subcommittee meeting, and testified first about his\u00a0SAFE Act<\/a>, which would give protections to banks working with cannabis businesses. (He introduced the SAFE Act as H.R. 2215 in 2017, and its\u00a0companion bill is currently under consideration in the Senate<\/a>.)<\/p>\n \u201cThis hearing is a big deal for thousands of employees and business across this country who have been put at risk because they are forced to deal in piles of cash while Congress stuck its head in the sand for the last 20 years,\u201d Perlmutter said. \u201cThe fact is you can\u2019t put the genie back in the bottle. Prohibition is over. Our bill is focused solely on taking cash off the streets and making our communities safer, and only Congress can take these steps and provide this certainty for financial institutions across the country.\u201d<\/p>\n Thanks to the disconnect between state laws allowing for legal cannabis and federal laws prohibiting the plant, cannabis businesses are often unable to access the traditional banking system, turning instead to local credit unions (many of which have only recently started accepting cannabis businesses, have long wait lists<\/a>\u00a0or\u00a0get cold feet<\/a>) and conducting business in cash transactions.<\/p>\n In 2014, the Obama administration\u00a0released guidelines<\/a>\u00a0allowing banks to legally provide services to state-licensed cannabis businesses, but many banks have been reluctant to take the risk anyway. By mid-2018, only 411 banks across the country were helping cannabis businesses,\u00a0according to\u00a0a 2018 Treasury Department report<\/a>.<\/p>\n Perlmutter, his Democratic colleagues, and many of the experts who testified before the committee spoke frequently throughout the hearing about the risks of armed robbery and violence due to the country\u2019s backward cannabis banking laws.<\/p>\n Specifically, Perlmutter and Rep. Denny Heck (D-WA) spoke about Travis Mason, a young security guard and former Marine,\u00a0who was killed in Aurora, Colorado<\/a>\u00a0during an armed robbery of a dispensary.<\/p>\n \u201cWe have the power in this committee to prevent murders and armed robberies and we must use it, we must use it now, because we are already late,\u201d said Heck.<\/p>\n Retired Baltimore police Maj. Neill Franklin, who heads the\u00a0Law Enforcement Action Partnership<\/a>, testified in front of the subcommittee in favor of the SAFE Act, and spoke about the considerations that law enforcement has when it comes to the \u201csoft target\u201d of cannabis businesses who cannot bank properly.<\/p>\n \u201cMy greatest fear is not the lost profit due to theft, it is the potential for serious assaults and death for the people attempting to protect that cash,\u201d said Franklin, referencing security guards, employees transporting cash and employees on payday carrying thousands of their own dollars in cash. He recalled\u00a0the story of the Orange County dispensary owner<\/a>\u00a0who was kidnapped, tortured and sexually assaulted in 2012, as his assailers attempted to extort him for cash.<\/p>\n In her line of questioning, Rep. Alexandria Ocasio-Cortez (D-NY) also raised the concern that cannabis regulations can give first mover advantages to wealthy individuals and firms, while the black and Latino people disproportionately impacted by the War on Drugs<\/a> are left 0ut of the profits.<\/p>\n Corey Barnette, owner of the Washington, D.C. dispensary Metropolitan Wellness<\/a>\u00a0and CEO with the cultivating company District Growers<\/a>, testified that he believes the SAFE Banking Act would be \u201ca valuable tool for winners of licenses,\u201d which could put \u201copportunity firmly within reach\u201d for people of color looking to enter the cannabis industry.<\/p>\n \u201cThis is an opportunity to right the injustices of the past, but we need equity embedded [in the policy] and we need the financial industry to be nimble with any other growing industry,\u201d said Rep. Ayanna Pressley (D-IL). \u201cThis is about the people, the small business owners.\u201d<\/p>\n The single expert present who spoke out against the SAFE Act \u2014 Jon Talcott, a lawyer for Nelson Mullins, speaking on behalf of Smart Approaches to Marijuana (SAM), who was invited by the Republican minority on the subcommittee\u00a0\u2014 also focused his comments on the public health ramifications of cannabis banking. However, he chose to focus on how cannabis itself is dangerous and did not directly discredit any of the points put forward by cannabis banking proponents.<\/p>\n \u201cI also speak on behalf of people who have been the victims of cannabis,\u201d Talcott said. He spoke about his sister, who he says developed schizophrenia and died young after she started smoking pot; his cousin, who smoked pot and then died of an opioid-induced heart attack, and about Alex Berenson\u2019s\u00a0reefer-madness-redux book<\/a>\u00a0on the dangers of cannabis.<\/p>\n Then Talcott pivoted to the main point put forth by the Republicans on the subcommittee who were opposed to new banking regulations: Cannabis banking rules should not be addressed while cannabis remains a Schedule I drug.<\/p>\n \u201cI think you really need to address the Controlled Substances Act and its prohibition of marijuana before any of the proposed changes and safe harbors would be effective,\u201d Talcott said. \u201cWe need to be very careful about how we proceed. If we want to discourage the black market, which I think we all do, then we need to be much more straightforward about how we approach this issue. We need to change the scheduling of marijuana \u2014\u00a0if that\u2019s what people want to do \u2014 and then go about putting in place the proper banking regulations.\u201d<\/p>\n In his opening statement, the Republican ranking member on the subcommittee, Rep. Blaine Luetkemeyer (R-MO), articulated almost this exact same point.<\/p>\n \u201cIt is my opinion that we are putting the cart before the horse by addressing this issue here in the Consumer Protection and Financial Institutions Subcommittee before the drug is descheduled, but I do welcome the conversation,\u201d said Luetkemeyer.<\/p>\n Luetkemeyer then proceeded to list the variety of issues he would like resolved before financial institutions are given a safe harbor to work with cannabis businesses, including money laundering laws, resolving questions around FDIC insurance, moving money across states that don\u2019t have legal marijuana, clarifying the Bank Secrecy Act and the rights of states to supersede federal law. Luetkemeyer\u00a0pointed to the hemp industry<\/a>\u00a0as a good example of pushing for descheduling first, and then called on the Department of Justice to consider descheduling cannabis first.<\/p>\n \u201cI believe we can\u2019t do much today besides realize we have a problem and that we can solve it by descheduling the drug,\u201d he said.<\/p>\n<\/blockquote>\n In a tense back-and-forth with Rep. Andy Barr (R-KY), Heck demanded that the Republican representative explain how he could insist that Congress had to deschedule cannabis in order to address banking concerns, when he wouldn\u2019t support descheduling in the first place.<\/p>\n \u201cWe have shown the way to do this, and it\u2019s an amendment to the Controlled Subtances Act,\u201d said Barr.<\/p>\n \u201cAre you willing to vote to delist marijuana?\u201d Heck demanded.<\/p>\n \u201cNo, I\u2019m not,\u201d Barr replied, with a stutter.<\/p>\n \u201cI don\u2019t understand the argument then,\u201d said Heck. \u201cIt\u2019s spurious if you suggest that\u2019s the solution and [then say you\u2019re] against it.\u201d<\/p>\n By and large, the question of whether or not cannabis should or should not be legalized was left off the table, with the exception of Talcott\u2019s comments.<\/p>\n A handful of Republican subcommittee members also brought up concerns about hypocrisy, saying the federal government should not make it easy for banks to work with cannabis businesses, after Obama-era banking efforts under Operation Choke Point discouraged banks from working with federally legal companies such as firearms dealers and payday lenders. (Heck noted that\u00a0Operation Choke Point is now over<\/a>.)<\/p>\n In his line of questioning, Luetkemeyer demanded the experts answer whether or not the organizations they represented had taken their requests to the Judiciary Committee or the Attorney General to ask about descheduling cannabis first. His demands appeared to have backfired, as a few of the panelists indeed had, specifically California\u2019s treasurer Fiona Ma, who noted that Californian representatives have repeatedly pushed for federal law changes.<\/p>\n Rep. Maxine Waters (D-CA), the chairwoman of the U.S. House Committee on Financial Services, chimed in on the subcommittee hearing to commend Ma on California\u2019s attempts to figure out a solution to the cannabis banking problem, which included\u00a0conducting research into whether or not the state could open its own bank<\/a>\u00a0to work with cannabis businesses. (California\u2019s research\u00a0found it would be too costly and challenging<\/a>\u00a0to open such a state bank.)<\/p>\n \u201cYou\u2019ve made a really strong case here for why it makes sense to create a safe harbor and why California supports the SAFE Banking Act,\u201d Waters said.<\/p>\n \u201cWe really need Congress to act,\u201d said Ma. \u201cThe most expeditious solution to the problem of cannabis banking would be for this committee and Congress to act.\u201d<\/p>\n TELL US,<\/b>\u00a0do you think Congress should make it easy for cannabis businesses to bank?<\/p>\n The post Congress Hears Testimony on Federal Cannabis Banking Reform<\/a> appeared first on Cannabis Now<\/a>.<\/p>\n
A subcommittee of the U.S. House Committee on Financial Services met today to discuss reforming federal banking regulations so that they can better accommodate cannabis businesses. With six experts from across the country testifying on the banking challenges facing cannabis companies, the hearing before the Consumer Protection and Financial InstitutionsContinue Reading<\/a><\/span><\/p>\n","protected":false},"author":32,"featured_media":0,"comment_status":"false","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[7591,50,459,7452,7592,7593,170,7594,7595,687,4552,326,7596],"tags":[],"_links":{"self":[{"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/posts\/32858"}],"collection":[{"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/users\/32"}],"replies":[{"embeddable":true,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/comments?post=32858"}],"version-history":[{"count":1,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/posts\/32858\/revisions"}],"predecessor-version":[{"id":32859,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/posts\/32858\/revisions\/32859"}],"wp:attachment":[{"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/media?parent=32858"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/categories?post=32858"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/tags?post=32858"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}The Human Costs of Operating in Cash<\/h4>\n
The Republicans Answer With Delay Tactics<\/h4>\n
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Why Is Support From Congress Necessary?<\/h4>\n
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\nRead More: Congress Hears Testimony on Federal Cannabis Banking Reform<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"