Days before Congressman Ed Perlmutter was scheduled to speak at a cannabis management conference in Denver this week, he had a defining moment in Washington, D.C. His bill that would allow banking institutions to serve legal cannabis companies became not only the first pot-related proposal to be considered by the full House of Representatives in over fifty years, but it actually passed.
“Had we not passed that bill last week, I did not want to talk to you people at all,” Perlmutter jokingly told a room full of cannabis regulators and business owners during the City of Denver’s Marijuana Management Symposium on Thursday, October 3. “The banking piece really is the thing that is the icebreaker in all of this.”
Perlmutter’s SAFE Banking Act, which he’d been pushing for six years, would provide federal protection to banks and financial institutions that want to provide loans, lines of credit, bank accounts and other services to cannabis businesses in states where they’re legal. His measure would also clarify that any banks that serve hemp businesses, which became federally legal in 2018, are safe from federal prosecution.
Although hemp is legal nationwide and 47 states have legalized some form of medical or recreational marijuana, the vast majority of banks and financial institutions won’t serve pot businesses out of fear of being hit with federal trafficking charges, because the plant and its derivatives are still considered Schedule I substances. As a result, many licensed pot businesses operate on a cash-only basis.
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The Colorado Sun recently reported that as many as 35 banks and credit unions offer services to Colorado’s cannabis industry, but do so “effectively, anonymously,” with limited clients and nondisclosure agreements, according to a spokesperson for the Colorado Bankers Association.
During his talk at the symposium, Perlmutter said that providing transparency and clearer regulations for the money involved would spur further cannabis reform in Congress, and possibly even lead to federal legalization or descheduling of cannabis.
But first, his banking bill needs to clear the other half of Congress, and Senate Majority Leader Mitch McConnell hasn’t been keen on advancing cannabis-related measures during his time on the Hill. But McConnell, a senator from Kentucky, has been championing industrial hemp since he helped pass the Farm Bill in 2018 — and while that act legalized hemp, it wasn’t clear enough about hemp banking.
That’s where Perlmutter’s bill could help, according to the Colorado representative.
“There have been good signs coming out of the Senate indicating that they’re interested in moving this bill forward,” he told the crowd. “We think the Majority Leader in the Senate — Senator McConnell — will move this forward.”
Perlmutter said that he expects the Senate to vote on the bill “over the next two to three months,” and has hopes that the SAFE Banking Act will become law within the next three to six months. But with a presidential impeachment inquiry hanging over the Senate, there could be some distractions in Congress.
However, Perlmutter pointed out that the Ukraine controversy had already engulfed D.C. by the time his bill made it to the House floor, but “even amidst all the impeachment stuff last week, we were able to pass it.”
Adding to Perlmutter’s optimism are recent statements from Senate Banking Committee Chairman Mike Crapo, who’s announced plans to take up cannabis banking legislation this fall.