Senate holds first hearing on bill to help marijuana businesses access financing

The Senate banking committee is holding its first-ever proceeding Thursday connected a bipartisan measure that would let the cannabis manufacture to entree accepted banking services, which marijuana businesses spot arsenic captious to their survival.

The meeting, titled Examining Cannabis Banking Challenges of Small Businesses and Workers, volition perceive grounds from lawmakers connected some sides of the aisle, including Sens. Jeff Merkley, D-Ore., and Steve Daines, R-Mont., who reintroduced the stand-alone measure past week. The committee volition besides perceive from witnesses including the Cannabis Regulators of Color Coalition, Drug Policy Alliance and the United Food and Commercial Workers International Union.

Thursday's proceeding volition find adjacent steps successful getting the measure to the Senate level for a vote, arsenic Senate Majority Leader Chuck Schumer and different cardinal lawmakers explicit enactment for it. It comes arsenic the marijuana industry, which is facing a downturn adjacent arsenic more states o.k. ineligible markets, has pushed Congress to instrumentality enactment connected the issue.

"Without afloat entree to the banking and payments system, ineligible cannabis businesses are forced to run successful the shadows," said Sen. Sherrod Brown, D-Ohio, who is besides seat of the committee.

Many concern owners besides trust connected funds from friends and household successful lieu of tiny concern and slope loans due to the fact that "they mightiness spell done each the outgo and effort, lone to beryllium denied," Brown said.

Echoing Brown, committee ranking subordinate Sen. Tim Scott, R-S.C., said "Congress has a work to guarantee each ineligible industries person entree to fiscal institutions and services."

But helium added lawmakers indispensable destruct the anticipation of loopholes successful wealth laundering laws earlier the enactment becomes law. Any loopholes could marque it harder for instrumentality enforcement to drawback cause and weapons traffickers, Scott said.

Senate enactment connected the measure is invited quality to executives crossed the industry, including Craig Sweat, proprietor of Uncle Budd NYC, the institution that archetypal brought mobile dispensary trucks to New York City. 

"I've been held up for truthful agelong that I person merchandise that is sitting and getting old," said Sweat, who aft years of operating his mobile dispensary institution and past a transportation service, has entered into a lucrative manufacturing and licensing concern with Omnium Canna to nutrient his products.

"I person nary mode of transferring funds, I can't wage staff, I'm conscionable sitting connected my hands," Sweat said, adding his latest concern task hasn't been capable to motorboat arsenic banks, fearful of national prosecution, person been giving him the 'runaround.'"

The Secure and Fair Enforcement Banking Act, besides known arsenic SAFE, deed a partition successful Congress past twelvemonth aft lawmakers excluded it from a $1.7 trillion authorities backing bill. It was the seventh clip the legislation, which has ever had beardown bipartisan support, failed to get done the Senate aft passing successful the House of Representatives.

Last month, the bill, which has been tweaked since past session, was reintroduced by Sens. Merkley and Daines, and Reps. Dave Joyce, R-Ohio, and Earl Blumenauer, D-Ore. The measure has beardown bipartisan enactment with 38 further co-sponsors successful the Senate and 8 much co-sponsors successful the House.

Under national law, banks and recognition unions look national prosecution and penalties if they supply services to ineligible cannabis businesses since it is inactive a Schedule I substance, on with heroin and LSD. Schedule I substances, according to the national Drug Enforcement Administration, are defined arsenic drugs with nary presently accepted aesculapian usage and a precocious imaginable for abuse. 

Without entree to accepted banks, ineligible marijuana businesses can't entree loans and capital, oregon adjacent usage basal slope accounts. As such, businesses are forced to run successful a cash-only model, which tin effect successful robbery, wealth laundering and organized crime.

Cat Packer, seat of the Cannabis Regulators of Color Coalition, told senators tiny cannabis businesses and workers are forced to run successful a "gray market" dealing successful cash-only transactions. The word "black market" has antagonistic connotations for Black and brownish concern operators disproportionately affected by backing access.

"We don't privation to equate achromatic with illegal," Packer, who is Black, said. A Black antheral down her nodded enthusiastically.

"I privation to conscionable stress this: the lone mode to destruct the criminality of tiny businesses and workers is to wholly region cannabis from the Controlled Substances Schedule," Packer added.

Key components of the measure support banks that enactment with state-legal cannabis businesses. The authorities would shield them from being penalized by national regulators, creating a harmless harbor from transgression prosecution, liability and plus forfeiture for banks, their officers oregon employees. 

The latest mentation of the program besides extends harmless harbor to organizations that assistance underserved communities, including the Community Development Financial Institutions and Minority Depository Institutions, smaller institutions tailoring to communities that person often lacked entree to banking services.

This week, the American Bankers Association, which represents banks of each sizes from each authorities successful the country, sent a letter thanking the committee for taking up the substance and urging senators to "markup and beforehand the authorities arsenic soon arsenic possible."

In a associated connection released aft the hearing, Schumer and Sens. Cory Booker, D-N.J., and Ron Wyden, D-Ore., said they were "encouraged" to spot the measure reintroduced aft cardinal improvements to the legislation. The lawmakers co-authored the Cannabis Administration and Opportunity Act together, which would region marijuana from the national database of controlled substances.

"We look guardant to watching this authorities advancement done the banking committee and moving with bipartisan partners to see further improvements, specified arsenic the Harnessing by Pursuing Expungement (HOPE) Act, which would enactment states that privation to expunge cannabis grounds with grants," they said.