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Open the banking system to the marijuana industry
Last year, retail sales of whiskey reached $3.4 billion. By comparison, total marijuana sales across the U.S. hit nearly $9 billion in 2017 with estimates projecting sales will continue to rise to $11 billion in 2018 and $21 billion in 2021.
Like whiskey, the marijuana industry in the U.S. is a multi-billion dollar industry, employs hundreds of thousands of people, and provides a significant revenue stream for communities across the country.
But whiskey manufacturers, sellers, and consumers can access one tool that remains elusive to the marijuana industry: the banking system. Without access to depository institutions, millions of dollars in cash are unbanked and on the streets of our communities every day. Today, thousands of licensed and regulated businesses do not have access to the banking system and are unable to accept credit or debit cards, deposit revenues, or write checks to meet payroll or pay taxes.
When businesses are forced to operate on a cash-only basis, public safety threats rise. It opens up marijuana and marijuana-related businesses to robbery and assault along with vendors, employees and customers. In 2016, Travis Mason, a 24-year old security guard and Marine Corps Veteran was tragically shot and killed in an attempted robbery at a dispensary in Aurora, Colo. Excess cash on our streets can also lead to an increase in black market or cartel activity as well as tax evasion and skimming.
Many states with marijuana or cannabis oil sales have strong regulatory structures to help protect abuses in the system and reduce black market activity, but it doesn’t change the fact that legitimate marijuana businesses in these states do not have access to the banking system.
Since 2013, we have put forth legislation, the SAFE Banking Act, to allow tightly regulated marijuana businesses the ability to access the banking system. Today, financial institutions who provide banking services to legitimate marijuana businesses are potentially subject to criminal prosecution for "aiding and abetting" a federal crime and money laundering under the Controlled Substances Act. Our legislation removes that risk and uncertainty by providing criminal and civil "safe harbor" protections for depository institutions which provide services to a legitimate marijuana business.
In states where Americans have voted to legalize some form of marijuana – whether it be medical or recreational – this legislation simply reduces the public safety risk in those communities by getting cash off the streets and reducing the threat of cartels.
Voters in the majority of states have spoken and voted to allow some form of marijuana in their state. Today, 29 states and several U.S. territories have legalized marijuana for medical purposes. Among those, eight states and the District of Columbia allow the use of recreational marijuana. Sixteen other states have passed laws allowing for legal cannabidiol (CBD). All in all, a total of 45 states and various territories allow for some form of marijuana use. This means ninety-five percent of the U.S. population lives in a state where there is some form of legal cannabis.
The genie is out of the bottle. It’s now up to Congress to address this banking crisis and align federal and state laws.
Despite promises made by then-candidate President Trump to let marijuana regulation be a state issue, this administration has caused even greater uncertainty for this industry. Recently, 19 U.S. Attorneys General sent a letter urging Congress to pass legislation such as the SAFE Banking Act citing “the need for Congressional action to get the cash generated by this industry into a regulated banking sector.”
Personal views on marijuana aside, supporting the SAFE Banking Act means supporting states’ rights and protecting public safety. The bipartisan SAFE Banking Act already has the support of 78 of our colleagues. We encourage others – on both sides of the aisle – to support our legislation as we work to reduce this public safety threat.Content originally published by The Hill on February 7, 2018.