Dank to the Bank
While many eyes in Washington, D.C. were glued to updates about President Donald Trump and a whistleblower, the U.S. cannabis industry had its attention on the House of Representatives.
They were all watching livestreams of a landmark vote on the Secure and Fair Enforcement (SAFE) Banking Act, the first piece of standalone marijuana legislation ever to be considered by either House of Congress.
That bill passed with a bipartisan, landslide 321-103 majority, and moved cannabis businesses a big step closer to being able to bank or have access to financial institutions like any other industry.
Even though recreational cannabis is legal in 11 states, and 33 more states allow medical marijuana, federal law still declares cannabis to be illegal. That means banks have not been allowed to do business with marijuana companies, relegating weed to being an all-cash industry and posing far larger problems than just not being able to write checks.
“Banking is so much more than just a business checking account,” says Michael Wheeler, vice president of policy initiatives at the cannabis distributor Flow Kana. “Access to credit, loans, and electronic transactions would be pure oxygen to many cannabis businesses.”
You may have heard that marijuana businesses are currently forced into the dangerous practice of hauling around huge sums of cash, because they can’t have bank accounts. This puts them in other awkward positions too, like having to pay their employees, their health insurance premiums, and even little things like electrical bills all in cash.
In wildfire-ravaged California, a lack of insurance has posed enormous problems for cannabis growers who were unable to insure their crops. The state did recently allow for and require cannabis insurance, but the companies willing to provide it have been gouging their cannabis customers with “risk premiums” that dramatically inflate their insurance costs.
“Insurance is one area where risk premiums are very prevalent,” Wheeler tells SF Weekly. “We are a gigantic step closer to eliminating risk premiums when banks begin to welcome our business.”
Our own San Francisco representative, House Speaker Nancy Pelosi, did not show up to vote Wednesday on the SAFE Banking Act. (She has a lot on her plate at the moment.) But she did send out a bland congratulatory tweet after the bill passed the House, indicating she does support the measure.
More importantly, 91 Republicans voted for the bill, showing how cannabis legalization measures have become a bipartisan movement.
“I was especially impressed with the support from 46 percent of Republicans in the House,” Wheeler says. “To find a path through the Senate, the political calculus depends on a strong showing from Republican members in the House. Support from even 20 percent of Republicans in the Senate would be a huge win.”
At press time, the SAFE Banking Act has just moved on to the Senate, where it already has 33 cosponsors. That means one-third of the Senate are essentially guaranteed “Yes” votes. But it’s unclear whether Senate Majority Leader and legalization foe Mitch McConnell will allow the bill to the floor, or whether President Trump would sign the bill into law.
But just this bill passing the House is a landmark step toward the full legalization of cannabis. Legalization likely won’t happen in one fell swoop; it may come in smaller-step measures like decriminalization and descheduling. But the federal government will begin to pass laws allowing the normalization of marijuana, and you can take that to the bank.