The road to the Oval Office became clearer for a cannabis banking bill after a key Senate chairman finally signaled his support for the measure.
Sen. Mike Crapo, R-Idaho, and chairman of the Senate Banking Committee, said in an interview that he officially supports a Senate version of a bill that would provide safe harbor for financial services companies serving the cannabis industry. Crapo had spent months debating whether he would forge a new piece of legislation or take up the existing measure.
The chairman made his comments a day after the House of Representatives passed its version of the bill with overwhelming support in a landmark congressional vote.
"I liked the amendments that the House put on it, I think that helped it," Crapo said in an interview. "I can't tell you a timeline, but I do want to move ahead on the legislation."
Crapo's support for the bill marks a watershed moment for the cannabis and banking industries, as the key senator has evolved from full-throated opposition earlier in the year to an all-out blessing now.
At stake is millions of dollars in cash that marijuana businesses are forced to deal in because depository institutions, should they engage the industry, run the risk of intense federal regulatory scrutiny. For banks, especially community banks, those cash-enriched businesses could mean millions of dollars worth of deposits that could help fuel revenue and earnings growth.
The bill also extends the safe harbor to insurance companies and brokers seeking to insure everything from crops and commercial property to vehicles that supplement the industry. Passage of the bill with insurance language included could be a boon for insurers seeking more premium dollars. Rep. Steve Stivers, R-Ohio, added an amendment to the bill during a committee markup that included the insurance provision.
"I feel pretty confident that it will pass the Senate, but if it doesn't, we'll be in the status quo, which is bad for people that want a safe environment when they walk into a dispensary, it's bad for people that have nothing to do with marijuana, like nutrient companies ... or landlords that happen to rent to them, because they could lose their bank accounts." Stivers told reporters. "It's a banking bill, it's not a cannabis bill. It's a bill about safety and about access to the banking system."
But Crapo said his support comes with fixes to the bill that he said would make it more palatable for him and his committee to consider.
He said clarity is needed for interstate commerce, specifically between states that have not legalized marijuana for any use, such as his home state of Idaho, and those that have legalized it.
In addition, Crapo said he wants to clarify how existing stockpiles of "legacy cash" will be handled in order to "avoid money laundering," and he wants to ensure that high-THC products are not being marketed to children. Lastly, he said there were general health and safety measures that needed to be addressed.
Hours later, Rep. Ed Perlmutter, D-Colo., and co-author of the House bill, said Crapo's wish list consists of items that could "easily" be implemented. When the time comes to reconcile both bills, either through a House-Senate conference committee or a simple passage of the Senate's measure, it should be a relatively easy lift, according to Perlmutter.
"I absolutely want to see what he's doing, but none of [his requirements] sound unreasonable," Perlmutter said in an interview.
At the same time, leaders of two major banking advocacy groups said their lobbying efforts in the Senate would intensify as the upper chamber advances toward consideration of the measure.
American Bankers Association President and CEO Rob Nichols told reporters at a press conference that the strong House vote — 321-103 in favor — "will send a message to the Senate that ... this is momentum."
"We've heard from bankers all across the United States about the challenges associated with this and serving their customers and clients," Nichols said. "Make no mistake, this is a huge priority going into the fall."
Credit Union National Association President and CEO Jim Nussle also told reporters at the same press conference that his organization is amping up the pressure on the Senate to ensure that successful passage in the House is not "just a one time, one-hit wonder."
"We already have hundreds of credit union advocates in town right now that are visiting their senator to talk about the importance of passing [this bill]," Nussle said.
In the meantime, Rep. Perlmutter's six-year effort has paid off, and he and the lower chamber await what Crapo and the Senate can deliver.
"It's a big relief for me, knowing we have 33 co-sponsors in the Senate," he said with a sigh, "to pass the baton to them."
Content originally published by S&P Global on September 30, 2019.