Cannabis Banking: State Treasurers Ask Congress to Include SAFE Act in COVID-19 Relief Legislation
On Wednesday, July 8, 2020, a bipartisan group of sixteen state treasurers, led by Oregon Treasurer Tobias Read, sent a letter to congressional leaders requesting that the next piece of COVID-19 relief legislation include the SAFE Banking Act.
The letter prominently cites both the well-known and new safety issues that come into play when forcing so many to operate on a purely cash basis:
This provision would not only address new safety issues created by the COVID-19 crisis, but also those caused by the existing conflict between federal and state cannabis laws. The 28,000 cannabis related legitimate businesses and their 243,700 employees, who already faced significant burdens before the pandemic, are now confronting dangerous new obstacles as they attempt to address the changed circumstances. To keep workers, patients and consumers safe, it is essential that we reduce the use of cash by creating access to financial services for these state-licensed businesses.
Those new obstacles include forcing cannabis businesses and users to continue engaging in all-cash transactions without the option of “no-contact exchanges” – which obviously gives cause for concern given CDC and WHO guidance that suggests the coronavirus can live on surfaces for extended periods of time. And, when considering how many caregivers and users would classify as high- or higher-risk, it becomes even more worrisome.
They also point to the steep economic downturn, highlighting the ironic fact that the majority of states have continued to permit cannabis sales and classify cannabis-related businesses as essential, but preclude their ability to obtain federal relief funding:
Due to the conflict with federal law, these businesses are ineligible for SBA lending programs or employee retention tax credits. Passage of the SAFE Banking Act would allow these businesses to seek needed capital from banks and credit unions and provide lending options for their employees during the economic recovery.
Treasurer Read’s office issued a statement regarding the letter: “With millions of dollars in cash transactions putting employees, patients, and consumers at risk, it is vital that Congress act swiftly to pass this important legislation.”
We previously reported that the House did pass the SAFE Banking Act late last year, but it has remained pending before the Senate Banking Committee since then. Although some remain hopeful the standalone bill will pass sooner than later, the state treasurers’ letter only highlights the need for change now.
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