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A U.S. Senate committee advanced legislation Wednesday that would write current regulatory policy into law that allows banks and credit unions to serve cannabis businesses and their workers in states where cannabis is legal.
The bill addresses a longstanding concern in Massachusetts’ marijuana sector, and now moves to the Senate floor. Boston-based Berkshire Bank is the latest entrant into the Connecticut cannabis banking market serving newly-legal marijuana growers, sellers and associated companies.
Nearly all Democrats on the U.S. Senate Banking Committee to pass S 2860, the Secure And Fair Enforcement Regulation Banking Act or the so-called SAFER Banking Act. The bill cleared the committee on a 14-9 vote with Democrat Raphael Warnock of Georgia in opposition and a small handful of Republicans voting in support.
“Cannabis policies look different in different states, but legal cannabis small businesses and their employees are running into many of the same issues. One of these issues is access to financial services,” committee chairman Sen. Sherrod Brown of Ohio said. “Regardless of how you feel about states’ efforts to legalize marijuana, this bipartisan bill is necessary – it will make it safer for legal cannabis businesses and service providers to operate in their communities and protect their workers.”
During Wednesday morning’s committee markup, Massachusetts Sen. Elizabeth Warren said she supports the underlying bill “because I think it’s common-sense policy to make sure that marijuana businesses that are legal under state law can access bank accounts and other financial services” and because it “is a good step in the right direction to make federal cannabis law a little less out of touch with reality on the ground in states across this country.” But she agreed with concerns raised by Warnock that the bill does little or nothing to address the harms of marijuana criminalization, particularly for Black and brown communities.
“I share Senator Warnock’s concern that this bill may reinforce inequities by helping white-owned cannabis businesses grow their profits, while Black and brown people are still being arrested for simple marijuana possession,” Warren said. “That means that this bill cannot be all that we do in this Congress on marijuana.”
Because marijuana remains wholly illegal at the federal level, businesses that are legal and regulated at the state level have struggled to find banks, most of which operate under federal regulations and with federal insurance, willing to accept them as customers.
Aaron Smith, CEO and co-founder of the National Cannabis Industry Association, said that while the U.S. House would still need to move the legislation before it could become law, passage of the SAFER Banking Act in the U.S. Senate “will provide the momentum Congress needs to enact broader reforms.”
A previous version of the bill passed the U.S. House in 2019, with all Massachusetts representatives voting in favor.
Banking trade groups also praised the move and urged both houses of Congress to pass the bill.
“The conflict between state and federal law has created legal uncertainty for community banks, inhibited access to the banking system for legal cannabis-related businesses, and created serious public safety concerns,” ICBA President and CEO Rebeca Romero Rainey said in a statement.
The ICBA, or Independent Community Bankers of America, lobbies on behalf of the nation’s small banks. The American Bankers Association, which is dominated by larger banks, also signaled its approval.
“This urgently needed, bipartisan legislation will resolve the ongoing conflict between state and federal law so that banks can serve state-authorized cannabis and cannabis-related businesses while enhancing public safety, tax collection and financial transparency. The status quo is simply untenable for consumers, small businesses and banks operating in states where cannabis is legal,” the association said in a statement.
