Senate holds first hearing on bill to help marijuana businesses access financing
MARIJUANA
PUBLISHED THU, MAY 11 20239:10 AM
Stefan Sykes
Chelsey Cox
KEY POINTS
The Senate is holding its first hearing Thursday on the Secure and Fair Enforcement (SAFE) Banking Act.
Last month, a group of bipartisan lawmakers reintroduced the SAFE Banking Act in the House and Senate.
The legislation will free up banking services for the cannabis industry.
Aaron Smith, chief executive officer of the National Cannabis Industry Association, speaks during a news conference on the Safe Banking Act outside the US Capitol in Washington, D.C., on Wednesday, Sept. 14, 2022.
Aaron Smith, chief executive officer of the National Cannabis Industry Association, speaks during a news conference on the Safe Banking Act outside the US Capitol in Washington, D.C., on Wednesday, Sept. 14, 2022.
The Senate Banking Committee is holding its first-ever hearing Thursday on a bipartisan bill that would allow the cannabis industry to access traditional banking services — which marijuana businesses see as critical to their survival.
The meeting, titled “Examining Cannabis Banking Challenges of Small Businesses and Workers,” will hear testimony from lawmakers on both sides of the aisle, including Sens. Jeff Merkley, D-Ore., and Steve Daines, R-Mont., who reintroduced the standalone bill last week. The committee will also hear from witnesses including the Cannabis Regulators of Color Coalition, Drug Policy Alliance and the United Food and Commercial Workers International Union.
Thursday’s hearing will determine next steps in getting the bill to the Senate floor for a vote, as Senate Majority Leader Chuck Schumer and other key lawmakers express support for it. It comes as the marijuana industry, which is facing a downturn even as more states approve legal markets, has pushed Congress to take action on the issue.
“Without full access to the banking and payments system, legal cannabis businesses are forced to operate in the shadows,” said Sen. Sherrod Brown, an Ohio Democrat and chairman of the committee, during opening remarks.
Many business owners also rely funds from friends and family in lieu of small business and bank loans because “they might go through all the cost and effort, only to be denied,” Brown said.
Echoing Brown, committee ranking member Sen. Tim Scott, R-S.C., said that “Congress has a responsibility to ensure that all legal industries have access to financial institutions and services.”
But he added that lawmakers must eliminate the possibility of loopholes in money-laundering laws before the act becomes law. Any loopholes could make it harder for law enforcement to catch drug and weapons traffickers, Scott said.
Senate action on the bill is welcome news to executives across the industry, including Craig Sweat, the owner of Uncle Budd NYC, the company that first brought mobile dispensary trucks to New York City.
“I’ve been held up for so long that I have product that is sitting and getting old,” said Sweat, who after years of operating his mobile dispensary company and then a delivery service, has entered into a lucrative manufacturing and licensing partnership with Omnium Canna to produce his products.
“I have no way of transferring funds, I can’t pay staff, I’m just sitting on my hands,” Sweat said, adding that his latest business venture hasn’t been able to launch as banks, fearful of federal prosecution, have been giving him the “runaround.”
