Banking legislation that would provide relief for small minority-owned cannabis businesses recently received support from several advocacy organizations that want to see the proposal included as part of a final competition bill that’s currently being negotiated on Capitol Hill.
Marijuana Matters, the Minority Cannabis Business Association (MCBA), Minorities for Medical Marijuana (M4MM), and Women Grow on June 2 launched the #SAFE4Equity campaign, which will lobby for the Secure and Fair Enforcement Act, H.R. 1996, also known as the SAFE Banking Act, introduced in March 2021 by U.S. Rep. Ed Perlmutter (D-CO) and 107 original cosponsors.
Perlmutter, a long-time, staunch advocate for equitable cannabis banking, has worked to pass the bill in the U.S. House of Representatives six times while continuing to garner bipartisan support.
“Advocates have been fighting for years for sensible cannabis reform,” said Roz McCarthy, chief executive officer at the Orlando, Fla.-based nonprofit M4MM. “The opportunity to pass legislation around safe and equal banking for all in the regulated cannabis industry would be a huge step in the right direction.”
If enacted, the SAFE Banking Act would prohibit a federal banking regulator from penalizing a depository institution for providing banking services to a legitimate cannabis-related business, according to the congressional record bill summary.
Additionally, proceeds from a transaction involving activities of a legitimate cannabis-related business would not be considered proceeds from unlawful activity, the summary says, noting that proceeds from unlawful activity are subject to anti-money laundering laws, among other provisions.
The measure has been included in the House-passed version of the America Creating Opportunities for Manufacturing, Pre-Eminence in Technology, and Economic Strength Act of 2022, known as the America COMPETES Act, which is currently being reconciled by conference committee members with the U.S. Senate-approved United States Innovation and Competition Act (USICA).
#SAFE4Equity supports the inclusion of the SAFE Banking Act in the final package that comes out of those negotiations, according to the sponsoring organizations, and Rep. Perlmutter has joined the campaign in calling on the Senate to pass the SAFE Banking Act this year either through the America COMPETES conference committee negotiations or as a standalone bill.
“I appreciate SAFE4Equity’s support of the SAFE Banking Act and their ongoing advocacy for federal cannabis reform,” the congressman said on Wednesday. “SAFE Banking is only one piece of the puzzle but it is a critical piece of reform that underserved communities and small businesses need now.”
Perlmutter thinks it’s imperative that the conference committee solve this problem as soon as possible “to begin to alleviate the threat of public safety and inequity which threatens communities and emerging small businesses across the country,” he said.
Courtney Davis, executive director of the nonprofit social enterprise Marijuana Matters, agreed, saying that the SAFE Banking Act may not be able to repair all of the harms from the war on drugs, but the bill is one of many tools that she thinks are essential to supporting individuals from historically disadvantaged communities in becoming successful entrepreneurs in the burgeoning cannabis space.
“Our cannabis laws are in desperate need of reform and we have an opportunity in Congress to pass a bill that will provide safe access to banking for minority and women entrepreneurs,” Davis said.
The campaign officially kicked off on June 2 with the re-launch of the safe4equity.org website and the SAFE4Equity social media channels, which will provide information on the SAFE Banking Act, updates on its movement through the Senate, as well as testimonials from minority cannabis entrepreneurs lacking full access to banking services.
According to the advocacy groups, the campaign’s mission is to highlight the fact that without equitable access to capital and banking services, then small, minority- and women-owned cannabis businesses fail to have the resources necessary to operate safely and to effectively compete at a higher scale to run their enterprises, according to #SAFE4Equity’s June 2 statement.
“As states continue to legalize, our small, women- and minority-owned entrepreneurs’ banking challenges become greater,” Gia Morón, president of Women Grow, said. “We want to see an industry where these entrepreneurs can thrive, but in order for them to do so they must have banking resources. The SAFE Banking Act will provide the necessary access and secure banking services our business owners need to operate sound businesses.”
#SAFE4Equity also will be used as a vehicle to address one of the core barriers to entry for minority cannabis operators: funding. And the campaign will feature real-time stories from cannabis entrepreneurs navigating “predatory agreements and financial lending practices” that have resulted from regulatory banking barriers, the statement says.
“Passing the SAFE Banking Act would help address this core issue affecting countless small and minority-owned cannabis operators throughout the country,” said Amber Littlejohn, executive director of MCBA, the largest national trade association serving minority cannabis businesses.
“By extending a safe harbor to banks, credit unions, certain payment processors, and other select financial entities to offer essential services such as loans, deposit accounts, check cashing, and electronic payments to state lawful cannabis companies, we are creating a sustainable future for small cannabis businesses and stopping the unjust criminalization of cannabis,” Littlejohn said.