Category: Cannabis

Bipartisan Push in Senate Seeks to Include Cannabis Reform Banking Legislation in Economic Competitiveness Bill

Posted on by Trey Jackson

US Capitol

A bipartisan push in the Senate is underway to pass a bill that would allow federally regulated banks to provide mortgage and financial services to state-licensed, cannabis-related businesses (CRBs)—without the threat of federal penalties. (The Hill, May 4) 

SAFE & COMPETES 

  • The Secure and Fair Enforcement (SAFE) Banking Act (H.R. 1996) would provide commercial property owners a safe harbor if they lease space to a state-approved CRB. Additionally, owners who lease space to CRBs under SAFE could finance their properties without repercussions from federal anti-money laundering statutes. The Roundtable is a long-standing supporter of the legislation. (Roundtable Weekly, May 3, 2019).
  • The cannabis reform bill was first introduced in Congress in 2013 by Rep. Ed Perlmutter (D-CO) and has passed the House six times—either as an amendment to a larger legislative package or as a standalone bill.  Each time, the legislation has stalled in the Senate. (Rep. Perlmutter news release, Feb. 9)
  • This year, the SAFE Banking Act passed the House on Feb. 4, after it was added as an amendment to the America COMPETES Act, which aims to ease the nation’s supply chain problems and boost domestic manufacturing. 

Next: Senate-House Conference 

  • A House-Senate conference on the America COMPETES Act will aim to negotiate a final bill and pass it with the support of 60 senators before the August recess. (Reuters, May 4)
  • Sen. Steve Daines (R-MT) addressed the SAFE Act  recently with The Hill , stating, “We’ve got nine Republican co-sponsors officially on it, close to 50 Democrats. There are some other Republicans that I’m confident, if we had a vote, would vote for it.” (Sen. Daines news release, March 23, 2021)

An Unbanked Industry 

Map of State Cannabis proposals from Wikipedia

  • Sen. Patty Murray (D-WA) said she is “fighting every which way” to include the SAFE ACT in the final version of the COMPETES Act. “This [cannabis] is a cash-only business right now. It’s dangerous for the employees,” added Murray, who is the third-ranking Democrat in the Senate and a member of the bicameral conference committee. (PoliticoPro, May 5 and The Hill, May 4)
  • Public safety is an urgent reason to include the SAFE Act as part of the conference’s final bill, according to a recent letter sent to Senate leaders by the American Bankers Association and all 50 state banking associations. (April 28 letter)
  • State-licensed cannabis businesses currently operate in 37 states, with additional states weighing legalization. (ABA April 28 letter)

A Senate bill seeking wider cannabis reforms is supported by Senate Majority Leader Chuck Schumer (D-NY), Senate Finance Committee Chair Ron Wyden (D-OR) and Sen. Cory Booker (D-NJ). The Democratic leaders originally planned to introduce their bill this month, but recently announced it will be delayed until August. (PoliticoPro, April 14)

#  #  # 

House Passes Cannabis Reform Banking Legislation to Provide Safe Harbor for Financial Service Providers and CRE Owners

Posted on by Trey Jackson

U.S. Capitol

A Roundtable-supported bill that would allow federally regulated banks to provide mortgage and financial services to state-licensed, cannabis-related businesses (“CRBs”) – without the threat of penalties under federal law – passed the House on Feb. 4. 

A SAFE Harbor 

  • The Secure and Fair Enforcement (SAFE) Banking Act (H.R. 1996) would provide commercial property owners a safe harbor if they lease space to a state-approved CRB, whose mortgages would not be subjected to corrective action by a bank under federal law.
  • The SAFE Banking Act was approved by the House last week after it was added as an amendment to the America COMPETES Act, a bill that aims to make the U.S. more competitive with China. (The Hill, Feb. 4)
  • The cannabis reform bill has been introduced in every Congress since 2013 by Rep. Ed Perlmutter (D-CO) – and has now passed the House six times as a standalone bill or an amendment to a larger legislative package.
  • Perlmutter, who plans to retire from the House at the end of this year, said, “Cannabis-related businesses — big and small — and their employees are in desperate need of access to the banking system and access to capital in order to operate in an efficient, safe manner and compete in the growing global cannabis marketplace.” (NJ.com, Feb. 7)
  • The Real Estate Roundtable is a long-standing supporter of the SAFE Banking Act. Roundtable President and CEO Jeffrey DeBoer noted in a March 2019 letter to policymakers that the bill “… clarifies that banks could not take adverse action on a loan to a real estate owner solely because that owner leases property to a legitimate CRB. The measure also protects sellers and lessors of real estate and other CRB ‘service providers’ by clarifying that proceeds from legitimate marijuana-related transactions do not derive from unlawful activity, and thus do not provide a predicate for federal criminal money laundering.” (Roundtable letter, March 25, 2019)
  • Cannabis has been legalized in 18 states since 2010, and 37 have legalized marijuana for medical purposes. (HuffPost, Feb. 10)
  • The estimated value of the U.S. cannabis industry is $17.7 billion, a substantial amount of which remains unbanked. As of January 2021, the legal cannabis industry supports 321,000 jobs across the country. (Perlmutter news release, April 19, 2021) 

Senate Consideration 

Rep. Ed Perlmutter

  • The America COMPETES Act now heads to the Senate for consideration and a likely legislative conference with House policymakers. Perlmutter, above, commented that if the SAFE Banking Act is rejected once again by the Senate, he would attach the cannabis reform measure to “some other bills coming up over the course of the next month or two.”
  • House Speaker Nancy Pelosi (D-CA) assured Rep. Perlmutter that she will push for passage of the SAFE Banking Act bill. Perlmutter said, “[Pelosi] understands, too, that I’m committed to put this on anything that I can. She sees it – and I hope the Senate ultimately sees it – as inevitable.” (PoliticoPro, Feb. 4)
  • Senate Minority Leader Mitch McConnell (R-KT) on Feb. 8 described the SAFE Banking measure as a “poison pill” amendment. “China has been steadily building up its military and economic might, and the Democrats’ answer is to help Americans get high?” McConnell said. (MarketWatch, Feb. 8)
     
  • In a separate cannabis reform effort, Senate Majority Leader Chuck Schumer (D-NY), along with Sens. Cory Booker (D-NJ) and Ron Wyden (D-OR), yesterday sent a “dear colleague” letter to solicit input about a Senate bill seeking to legalize marijuana at the federal level with the addition of social justice measures. 

Schumer’s bill is likely to attract more Republican opposition than the SAFE Banking Act. 

#  #  # 

House Again Passes Cannabis Reform Legislation Providing a Safe Harbor to CRE Owners

Posted on by Trey Jackson

A Roundtable-supported bill that would allow federally regulated banks to provide mortgage and financial services to state-licensed, cannabis-related businesses (“CRBs”) without the threat of federal penalties passed the House April 19 on a strong bipartisan vote. 

The SAFE Banking Act

  • The Secure and Fair Enforcement (SAFE) Banking Act [H.R. 1996 (117)] would provide commercial property owners a safe harbor if they lease space to a CRB, whose mortgages would not be subjected to corrective action by a bank.
  • The SAFE Banking Act, which has been introduced in every Congress since 2013 by Rep. Ed Perlmutter (D-CO), passed the House multiple times in the last Congress – both as a stand-alone measure and as an addition to coronavirus relief legislation.
  • Rep. Perlmutter commented on the passage this week, “After years of bringing up this issue, I feel optimistic about the path forward for the SAFE Banking Act and, more broadly, reforms to our federal cannabis laws.” (Perlmutter news release, April 19)

Roundtable Support

  • The Real Estate Roundtable is a long-standing supporter of the SAFE Act. Roundtable President and CEO Jeffrey DeBoer noted in March 2019 letter to policymakers that the legislation, “… clarifies that banks could not take adverse action on a loan to a real estate owner solely because that owner leases property to a legitimate CRB.  The measure also protects sellers and lessors of real estate and other CRB ‘service providers’ by clarifying that proceeds from legitimate marijuana-related transactions do not derive from unlawful activity, and thus do not provide a predicate for federal criminal money laundering.”  (Perlmutter news release, March 18, 2021 and Roundtable letter, March 25, 2019)
  • The legislation is supported by a wide variety of other organizations, including the National Association of State Treasurers and Governors from 21 states and territories.  (Perlmutter news release, April 19)
  • The Roundtable also advocates that Congress should provide fuller protections to real estate business through legislation that clarifies state-compliant cannabis transactions are not illegal federal “trafficking” – and do not produce unlawful proceeds under money laundering statutes.

Cannabis and CRE

The estimated value of the U.S. cannabis industry is $17.7 billion, a substantial amount of which remains unbanked. As of January 2021, the legal cannabis industry supports 321,000 jobs across the country. (Perlmutter news release, April 19)

#  #  #

House Passes Legislation to Permit Banking Services for Legal Cannabis-Related Businesses

Posted on by Trey Jackson

Jeffrey DeBoer, Real Estate Roundtable President and CEO

Real Estate Roundtable President and CEO Jeffrey DeBoer

The House of Representatives on Sept. 11 passed the Secure and Fair Enforcement (SAFE) Banking Act [H.R. 1595 (116)] – a Roundtable-supported bill that would allow federally regulated banks to provide mortgage and financial services to state-licensed, cannabis-related businesses (“CRBs”) without the threat of federal penalties. (Wall Street Journal, Sept. 25)

  • The SAFE Banking Act would also provide protection from the threat of federal enforcement action for real estate owners, law firms and other businesses that provide services to state-approved CRBs.
  • The bill – authored by Reps. Ed Perlmutter (D-CO) and Denny Heck (D-WA) and cosponsored by Reps. Steve Stivers (R-OH) and Warren Davidson (R-OH) – passed by a vote of 321 to 103.
  • Today, 47 states, four U.S. territories, and the District of Columbia – representing 97.7 % of the U.S. population – have legalized some form of recreational or medical marijuana, including CBD oil.  (Rep. Perlmutter news release, Sept. 25)
  • Rep. Perlmutter stated, “Thousands of employees, businesses and communities across this country have been forced to deal in piles of cash because of the conflict between state and federal law. After six years of working on this bill, the SAFE Banking Act will go a long way in getting cash off our streets and providing certainty so financial institutions can work with cannabis businesses and employees.” 

  • The Real Estate Roundtable sent a letter urging swift enactment of SAFE Act in March to the leadership of the House Financial Services and Judiciary Committees.  Roundtable President and CEO Jeffrey DeBoer noted in the letter, “H.R. 1595 clarifies that banks could not take adverse action on a loan to a real estate owner solely because that owner leases property to a legitimate CRB.  The measure also protects sellers and lessors of real estate and other CRB ‘service providers’ by clarifying that proceeds from legitimate marijuana-related transactions do not derive from unlawful activity, and thus do not provide a predicate for federal criminal money laundering.” (Roundtable letter, March 25, 2019)
  • In the Senate, the Banking, Housing and Urban Affairs Committee in July held a hearing on the banking-related challenges faced by CRBs.  The hearing featured testimony by Sens. Cory Gardner (R-CO) and Jeff Merkley (D-OR), co-sponsors of the SAFE Banking Act (S. 1200). 

  • Sen. Gardner stated on Wednesday, “The conflicting federal and state marijuana laws make it difficult for legitimate businesses to use basic financial services, and this bipartisan legislation gets Washington out of the way and gives them the access they need to do business and pay taxes. Today’s historic action in the people’s House adds to the momentum the SAFE Banking Act gained following the Banking Committee’s hearing in July. The Senate should move forward with the SAFE Banking Act and deliver it to the President for his signature.” (Gardner news release, Sept. 25)
  • In an interview with Politico, Senate Banking Chairman Mike Crapo (R-ID) said, “”This is an issue in which I have seen strong support not only across the country from various banking institutions, even the small community banks in states that don’t have the issue, but also among colleagues on both sides of the aisle,” he said. “I think there will be good support for it.”  (Politico, Sept. 27)
  • Sen. Crapo also said he may consider new additions to a Senate cannabis banking bill that could include anti-money laundering measures. 

Amendments were added to the House SAFE Banking Act to make it more appealing to Senate leadership, yet prospects for the bill’s passage in the Senate remain uncertain.  (MarketWatch and Politico, Sept 26)

#  #  # 

Senate Committee Considers Protections for Banks Dealing With Legal Cannabis-Related Businesses; Bill Would Allow CRBs to Buy Property Insurance

Posted on by Trey Jackson

A Senate Banking Committee hearing on July 23 focused on a bipartisan bill that would protect lenders from federal liability when they provide accounts and other financial services to cannabis-related businesses (CRBs) deemed legal under state laws.  The bill would also protect certain real estate transactions involving legitimate CRBs. (Senate Banking Committee, ” Challenges for Cannabis and Banking: Outside Perspectives “)

Senate Banking Chairman Mike Crapo (R-ID)  said at the hearing that “the case was made pretty strongly” that lawmakers needed to address confusion about whether banks and credit unions can provide accounts to marijuana businesses, as well as those ancillary businesses that service the growing industry.
  • The hearing featured testimony by Sens. Cory Gardner (R-CO) and Jeff Merkley (D-OR), co-sponsors of the Secure And Fair Enforcement (SAFE) Banking Act.  Their bill (S. 1200) would provide a safe harbor to financial institutions serving CRBs, protecting them from federal money laundering laws. 
  • Senate Banking Chairman Mike Crapo (R-ID) said at the hearing that “the case was made pretty strongly” that lawmakers needed to address confusion about whether banks and credit unions can provide accounts to marijuana businesses, as well as those ancillary businesses that service the growing industry. (BGov, July 23)  Chairman Crapo reportedly “stopped short of endorsing a legal fix for banks that want to serve cannabis businesses, warning that major concerns he has about financial crimes and access to the drug still need to be addressed.” (Politico Morning Money, July 24) 
  • For real estate: the SAFE Banking Act would protect sellers and lessors of real estate, and other “service providers,” by clarifying that proceeds from transactions with legitimate CRBs do not derive from unlawful activity – and thus do not provide a predicate for federal criminal money laundering. 
  • The Real Estate Roundtable on April 30 urged the Senate Banking Committee leadership to hold hearings on the SAFE Act.  Roundtable President and CEO Jeffrey DeBoer stated in the letter, “Without a bank account, dispensaries and other legal CRBs must operate on a cash basis.  Risks of crime thus increase and tax revenues to pay for infrastructure and other government services are potentially lost.  S. 1200 can significantly address these problems by providing protections for banks, real estate firms and their employees from punishment simply because they aim to serve businesses within … states that have legalized marijuana to varying degrees.”  (Roundtable Policy Letter, April 30) 
  • Companion legislation in the House (H.R. 1595) was approved by the Financial Services Committee on March 27 by a 45-15 vote. A full House vote on the bill may occur after the upcoming summer recess. (Roundtable Weekly, April 26 and Forbes, July 23) 
  • At the July 23 Senate hearing, Banking Committee member Bob Menendez (D-NJ) discussed bipartisan legislation he introduced the day before – to ensure legal CRBs have access to comprehensive and affordable insurance coverage.    The Clarifying Law Around Insurance of Marijuana (CLAIM) Act would prohibit the federal government from taking any adverse action on an insurance policy held by an owner or operator of a CRB, or against real estate or equipment leased to a CRB, solely because the policy covers cannabis operations that a state deems legal. (Menendez news release, July 23) 

Following the hearing, Chairman Crapo said the Committee is acting on the SAFE Banking Act.  “We’re looking at it to see if there’s a solution to the various issues we’re talking about.”  (BGov, July 23) 

Roundtable Urges Senate Committees to Address Federal-State Cannabis Policy Conflicts Constraining Banking, Real Estate Transactions

Posted on by Trey Jackson

The Real Estate Roundtable on April 30 wrote to the Senate Banking and Judiciary Committees urging hearings to consider the SAFE Banking Act (S. 1200) and the STATES Act (S. 1028) – measures that would provide clarity for banking firms and real estate providers to fully serve the needs of cannabis-related businesses deemed legal under state law.  (Roundtable Policy Letter, April 30)

Roundtable President and CEO Jeffrey DeBoer states in the April 30 letter, “Passage of the SAFE Banking Act is a strong first step to clarify a full range of proper business conduct in the rapidly evolving context of cannabis policy.”

  • The bipartisan Secure And Fair Enforcement (SAFE) Banking Act is led by co-sponsors Sens. Cory Gardner (R-CO) and Jeff Merkley (D-OR).  S. 1200 clarifies that banks would not face adverse action on a loan to a real estate owner solely because that owner leases property to legitimate, state-licensed, cannabis-related businesses (CRBs).  The measure would also protect sellers and lessors of real estate and other CRB “service providers” by clarifying that proceeds from state-approved marijuana-related transactions do not derive from unlawful activity, and thus do not provide a predicate for federal criminal money laundering.
  • Roundtable President and CEO Jeffrey DeBoer states in the letter, “Passage of the SAFE Banking Act is a strong first step to clarify a full range of proper business conduct in the rapidly evolving context of cannabis policy.”
  • DeBoer encouraged the committees to hold hearings on the SAFE Act to create a record for resolving and reconciling the conflict between business transactions that are deemed legal under state law, yet exposed to federal criminal liability.  If the SAFE Act is enacted, federally regulated banks would no longer face the threat of sanction simply by providing financial services to a legitimate state-authorized CRB.
  • The Roundtable letter also supports the swift enactment of the bipartisan Strengthening the Tenth Amendment Through Entrusting States  (STATES) Act, led by Sens. Cory Gardner (R-CO) and Elizabeth Warren (D-MA).  S. 1028 would ensure that each state has the right to determine for itself the best approach to cannabis within its borders.  (U.S. News & World Report, April 4 and  Roundtable Weekly, April 12)  
  • In the House, the STATES Act (H.R. 2093) was reintroduced on April 4 by Reps. Earl Blumenauer (D-OR) and David Joyce (D-OH).  Additionally, the SAFE Act (H.R. 1595) – co-sponsored by Reps. Ed Perlmutter (D-CO), Denny Heck (D-WA), Steve Stivers (R-OH) and Warren Davidson (R-OH) – was approved by the House Financial Services Committee on March 27 by a 45-15 vote. (Roundtable Weekly, April 26) 

Prospects for passing cannabis-related bills in the Senate remains uncertain.  Senate Banking Chairman Michael Crapo (R-ID) this week expressed doubt about the SAFE Act in Congress.  “As long as cannabis is illegal under federal law, it seems to me to be difficult for us to resolve this,” he said.  (Politico Pro, May 1)

House Expected to Vote on Cannabis SAFE Banking Bill; STATES Act Reintroduced to Resolve Federal-State Legal Conflicts Over Cannabis

Posted on by Trey Jackson

A pair of bills working their way through Congress could allow financial institutions to provide legal cannabis companies with banking services and resolve federal-state laws governing cannabis.

State-by-State Cannabis Policies — interactive map from National Cannabis Industry Association. 
  • Congressman Earl Blumenauer (D-OR), founder and co-chair of the Congressional Cannabis Caucus, said that the House will soon vote on the SAFE Act – a bill allowing banks to work with marijuana businesses in certain states. (The Hill, April 19)
  • The House Financial Services Committee on March 27 approved the Secure and Fair Enforcement (SAFE) Banking Act of 20119 (H.R. 1595). The bipartisan bill, approved by a 45-15 vote, was co-sponsored Reps. Ed Perlmutter (D-CO), Denny Heck (D-WA), Steve Stivers (R-OH) and Warren Davidson (R-OH).
  • The Real Estate Roundtable in March sent a letter urging swift enactment of the bill to the leadership of the Financial Services and Judiciary Committees.  Roundtable President and CEO Jeffrey DeBoer noted in the letter, “The SAFE Banking Act provides much-needed clarity for the banking, real estate, and business sectors to function within the contours of state laws that have legalized marijuana.”  (Roundtable Weekly, March 29)

As the SAFE and STATES Acts move the cannabis issue forward in Congress, prospects for passing marijuana-related bills in the Senate remains uncertain.  (Fortune, April 19)

  • Blumenauer and Rep. David Joyce (D-OH) on April 4 also reintroduced the Strengthening the Tenth Amendment Through Entrusting States Act (STATES Act) in the House, which would ensure that each state has the right to determine for itself the best approach to cannabis within its borders.  (H.R. 2093) 
  • According to a summary of the bill, 47 states have laws permitting marijuana or marijuana-based products. Washington D.C., Puerto Rico, Guam, and a number of tribal nations have similar laws.  Last year,  Michigan, Missouri, Oklahoma, Utah, and Vermont all expanded legal marijuana.
  • In the Senate, the STATES Act (S. 1028) was reintroduced by Sens. Cory Gardner (R-CO) and Elizabeth Warren (D-MA) to resolve the federal-state conflict over cannabis laws.  (U.S. News & World Report, April 4 and Roundtable Weekly, April 12)  

As the SAFE and STATES Acts move the cannabis issue forward in Congress, prospects for passing marijuana-related bills in the Senate remains uncertain.  (Fortune, April 19) 

 

House Committee Approves Bill Allowing Banks to Serve Legal Cannabis Businesses; Roundtable Urges Enactment

Posted on by Trey Jackson

The House Financial Services Committee on March 27 approved the Secure and Fair Enforcement (SAFE) Banking Act of 20119 (H.R. 1595), which would allow financial institutions to legally work with state-authorized cannabis-related businesses.

The Roundtable earlier in the week sent a  letter urging swift enactment  of the legislation to the leadership of the House Financial Services and Judiciary Committees.

  • The bipartisan bill, approved by a 45-15 vote, was co-sponsored Reps. Ed Perlmutter (D-CO), Denny Heck (D-WA), Steve Stivers (R-OH) and Warren Davidson (R-OH).
  • The Real Estate Roundtable earlier in the week sent a letter urging swift enactment of the legislation to the leadership of the House Financial Services and Judiciary Committees. 
  • Roundtable President and CEO Jeffrey DeBoer notes in the letter, “The SAFE Banking Act provides much-needed clarity for the banking, real estate, and business sectors to function within the contours of state laws that have legalized marijuana.”
  • The Roundtable letter emphasizes that federal and state law differences on cannabis policy leaves banks and real estate providers trapped between their mission to serve lawful businesses in local communities – and the threat of federal enforcement action.  If H.R. 1595 is enacted, federally regulated banks would no longer face the threat of sanction simply by providing financial services to a legitimate cannabis-related businesses (CRB).
  • “Without a bank account, dispensaries and other legal CRBs must operate on a cash basis,” DeBoer notes. “Risks of crime thus increase and tax revenues to pay for infrastructure and other government services are potentially lost.  H.R. 1595 can significantly address these problems by providing protections for banks, real estate firms and their employees from punishment simply because they aim to serve businesses within the 46 states that have legalized marijuana to varying degrees,” DeBoer stated.  (Roundtable SAFE Act letter, March 25)

Rep. Perlmutter noted the broad support for the legislation from the business community, including The Roundtable, in a March 28 news release. Perlmutter added, “With 152 cosponsors at the time of the committee vote – over a third of the entire House – the bill will next move to the floor of the House.  A Senate companion bill is also expected to be introduced in the coming weeks.”