The US House has recently approved two separate provisions that would better protect states, financial institutions and businesses operating in a medicinal or adult-use cannabis market, affording them the same opportunities all other licensed businesses enjoy.
The first protection falls under the Financial Services and General Government Appropriations Act, an annual bill used to support a broad range of services and organizations in both the Executive and Judicial branches. Language in Sec. 633 guarantees that any person, producer, manufacturer, or licensed organization involved with cannabis has the freedom to pursue all financial services available in their state – while ensuring the financial institution is protected from facing potential financial or Federal penalties. To this day, a majority of cannabis-related businesses are forced to deal in cash – creating headaches for entrepreneurs, consumers, and even the IRS.
The provision features similar language found within Representative Earl Blumenauer’s SAFE Banking Act, which was designed to better protect institutions that provide financial services to cannabis-related businesses. Unlike the SAFE Banking Act, the cannabis-specific provision is not the focal point of the larger measure, potentially paving the way for representatives from states with conservative cannabis views to support the measure without facing local push-back.
“Another cannabis win in the House! Today, we passed new banking protections for cannabis businesses. We must address the irrational, unfair, & unsafe denial of their banking services around the country. Let’s keep up this momentum. Time for the Senate to act,” tweeted Earl Blumenauer after the provision passed in a 224-196 vote last Friday.
Congressman Blumenauer, who represents the 3rd District of Oregon, has tried to pass similar provisions, and whole-bills in recent past. In 2013, the Congressman co-authored the “The Path Forward: Rethinking Federal Marijuana Policy”, a detailed report that highlighted the conflicts and disparities between state and federal cannabis laws.
Today, legitimate marijuana businesses can’t operate like other businesses, and state tax laws often aren’t consistent with their marijuana laws. Federal prosecutors and local law enforcement in each state often handle the situation differently, and the entire industry –an industry that many Americans support – remains clouded by uncertainty, illegitimacy and fear,” wrote Bluenauer in the most recently updated version of the report.
The second provision, filed under House Amendment 398 to H.R.0355, also includes cannabis law reform, but focuses more on protecting states with pro-cannabis laws, not individual businesses or institutions. The provision has been widely endorsed by the Democratic party, including presidential nominees Elizabeth Warren and Cory Gardner, who championed the STATES Act, which the provision partially mirrors. The STATES Act was designed to strengthen the Tenth Amendment, allowing each individual state and U.S. owned territories to craft their own laws and regulations relating to cannabis. If approved by the Senate, the provision would block the Dept. of Justice from interfering in legal cannabis markets, and guarantee that no federal funds can be used to penalize local counties, cities, and states.
The two bills may have comfortably passed in the House, but greater challenges are expected, it’s possible that the provisions could be entirely removed before the Senate approves a final draft. Still, if either provision remains and passes through the Senate, it would be a historic victory for advocates and leaders in the cannabis industry, and a major step towards more meaningful reform.