- On Friday May 15th, the U.S. House passed a $3-trillion relief bill aimed at the economic pressures of the coronavirus pandemic. Included in the bill was the legislative language of the SAFE Banking Act (formally titled the Secure and Fair Enforcement of Banking Act), which would allow cannabis businesses to work freely with banks. The stimulus bill is known as The Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act and now heads to the U.S. Senate, which has never passed cannabis banking legislation.
- Justin Strekal, political director of NORML, joined the chorus of wary optimism in a public statement: “The inclusion of the SAFE Banking Act in the CARES 2 package is a positive development, but one that’s akin to applying a band-aid to a gaping wound. In the majority of states, these cannabis businesses have been deemed essential during this pandemic. But at the federal level, they are being cast aside by Congress. Those small cannabis businesses facing tough economic times are essentially being told by Congress to shutter their doors and fire their employees.” The tough economic times are compounded by the obvious public health crisis, too. The cash handling that’s so prevalent in the cannabis industry is something that poses certain health risks. The SAFE Banking Act provisions within the HEROES Act would immediately help the situation, allowing businesses to develop more streamlined cashless systems for working with their customer base.
- Jonathan Havens, co-chair of the Cannabis Law Practice, told Cannabis Business Times, “I would be surprised if it passed the Senate, just given Senate Majority Leader Mitch McConnell’s statements on the SAFE Act previously, and given his statements in the last 24 hours about his reaction to it being included in the House bill,” Havens said. “It’s not enough that the House is going to do this. The Senate really needs to act on this in concert, and it doesn’t sound like they’re going to do that if you take your cues from McConnell.”
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THE KVK PERSPECTIVE
Due to federal prohibition, some of the biggest issues that commercial cannabis businesses face are the lack of access to reliable banking, commercial lending, and capital markets. Now, amid the current pandemic, commercial cannabis businesses are further burdened by the lack of access to federal economic relief in the form of loans or stimulus packages, despite being deemed an essential business in most states that have issued shelter-in-place orders. The lack of access to banking is further exposing the consumers, patients and employees of cannabis businesses to additional and unnecessary contact with individuals and surfaces for cash handling purposes at a time, where any contact must be limited due to the novel coronavirus potentially being able to be transmitted by contact with infected surfaces and through individuals.
On Friday, May 15, 2020, The U.S. House of Representatives passed another coronavirus stimulus bill, called The Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act, that includes a provision that would allow banks to serve state-licensed cannabis businesses.
The HEREOES Act further indicates the House’s support for licensed cannabis businesses and could be a step towards legitimized banking for cannabis businesses. However, cannabis businesses should not keep their hopes up because the Senate has never passed cannabis banking legislation and the President and Senate Republicans have clearly voiced their opposition to the cannabis business protections in the HEROES Act.
By Nellie Niakossary and Tatyana Brenner, May 21, 2020
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