- Marijuana Reform Advocates Have Been Pushing to Have Cannabis Banking Included in the Next COVID-19 Stimulus Bill
- It Seems Those Efforts Have Paid Off After House Leadership Announced the SAFE Banking Act Has Been Included in What Will Likely Be the Largest Relief Package in U.S. History
On Tuesday, House Democrats unveiled a sweeping COVID-19 relief bill expected to be worth more than $3 trillion — which would make it the single largest stimulus package in U.S. history.
The legislation includes funding for expanded COVID-19 testing, financial support for state and local governments, and additional direct payments to U.S. citizens. It also contains provisions to safeguard financial institutions that work with cannabis businesses against federal penalties.
Leading up to the introduction of the COVID-19 legislation, stakeholders and lawmakers have been advocating for the inclusion of cannabis reform. Thanks to their efforts, language from the SAFE Banking Act was included in the bill. As the chief sponsor of the cannabis bill set to be included in the comprehensive new COVID-19 package, Congressman Ed Perlmutter (D-CO) raised the issue previously in a caucus meeting and expressed the support it received from House Speaker Nancy Pelosi.
“I just learned the SAFE Banking Act is included in the CARES 2.0 package. I have been pushing for this because the COVID-19 crisis has only exacerbated the risk posed to cannabis businesses & their employees & they need relief just like any other legitimate business,” tweeted Perlmutter.
Congressman Earl Blumenauer echoed the support for including the SAFE Banking Act in the bill.
“The inclusion of the SAFE Banking Act is recognition that cannabis businesses have been classified as essential,” said Blumenauer. “Prohibiting these businesses from banking and forcing cash-only transactions in the middle of a global health crisis is irresponsible and wrong. The passage of the bipartisan SAFE Banking Act will be a huge benefit, not only to the industry but to our communities and public safety.”
The section of the 1,815-page COVID-19 stimulus package that references the cannabis reform states: “The purpose of this section is to increase public safety by ensuring access to financial services to cannabis-related legitimate businesses and service providers and reducing the amount of cash at such businesses.”
In a summary of the cannabis reform legislation, it states that the stimulus package would “allow cannabis-related legitimate businesses, that in many states have remained open during the COVID-19 pandemic as essential services, along with their service providers, to access banking services and products, as well as insurance.”
In a show of further support for cannabis companies, the legislation “requires reports to Congress on access to financial services and barriers to marketplace entry for potential and existing minority-owned cannabis-related legitimate businesses.”
SAFE Act Passed House Last Year But Still Remains in Senate
Since being passed by the House last year, the SAFE Banking Act sat idle in the Senate Banking Committee. Despite Colorado Senator Cory Gardner speculating that a deal was “close,” negotiations regarding the bill have been ongoing, with Idaho Senator Mike Crapo recommending several revisions.
Cannabis advocates have been pushing for lawmakers to add language in the legislation that would extend access to Small Business Administration (SBA) relief packages for cannabis businesses. However, in the current iteration of the COVID-19 relief package, this language was not included. The inability of cannabis companies — including those indirectly related to the cannabis industry, such as legal and accounting firms — to access SBA relief is due to the ongoing federal prohibition of cannabis products.
In an attempt to fix the issue, Congressman Earl Blumenauer introduced a bill in April 2020, calling for the SBA to allow relief access to cannabis and cannabis-related businesses. This followed a letter that Blumenauer spearheaded — along with 34 bipartisan members of the House — pushing leadership to open up access for cannabis companies in future COVID-19 relief bills. In a separate letter, Nevada Senator Jacky Rosen and Oregon Senator Ron Wyden also requested cannabis inclusion.
While not exactly what the senators mentioned above have been pushing for, the current version of the COVID-19 stimulus bill does include a section that would allow individuals with prior convictions to be eligible for SBA’s Paycheck Protection Program (PPP): “An SBA loan that helps businesses keep their workforce employed during the Coronavirus (COVID-19) crisis.”
Seemingly, the inclusion of the PPP is a response to a recent public request made by Congressman Joe Kennedy III and Congresswoman Joyce Beatty, in which the pair pointed out that the current policy leaves those convicted of cannabis possession ineligible for the PPP loan.
Merely a Band-Aid Solution?
“In the majority of states, these cannabis businesses have been deemed essential during this pandemic,” explained Streka. “But at the federal level, they are being cast aside by Congress. Those small cannabis businesses facing tough economic times are essentially being told by Congress to shutter their doors and fire their employees.”
“While larger, better-capitalized players may be able to weather this storm, smaller cannabis businesses may not be able to do so absent some economic stimulus,” added Streka. “By continuing to deny these small businesses eligibility to SBA assistance, it is possible that we could see an acceleration of the corporatization of the cannabis industry in a manner that is inconsistent with the values and desires of many within the cannabis space.”