Tag: 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)

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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. 

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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)

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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)

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