U.S. House of Representatives has approved a defense spending bill, the National Defense Authorization Act (NDAA), which included an amendment to support banks servicing marijuana industries in states with legal and regulated cannabis laws on the books.
The amendment, successfully added to the bill on a voice vote, was brought to the floor without contest by Representative Ed Perlmutter of Colorado. According to Perlmutter, this amendment will ensure financial institutions can operate without fear of retribution from the US government in servicing cannabis businesses. The amendment also serves to cut out cartels and other organized crime from capitalizing on vulnerabilities in states where cannabis industries are legal to operate legitimately. In a statement on the floor preceding the vote, Perlmutter stated, “This will strengthen the security of our financial system in our country by keeping bad actors like foreign cartels out of the cannabis industry. But most importantly, this amendment will reduce the risk of violent crime in our communities. By dealing in all cash, these businesses and their employees become targets for robberies, assaults, burglaries, and more.”
Perlmutter added, “This is a public safety and a national security matter—very germane to the issues at hand, dealing with foreign cartels and particularly the cash that is developed by this business that leads to crime.”
Unsurprisingly, Democrats in the house offered their support of the amendment. Rep Lou Correa of California stood in support of the bill, making a statement, “cannabis customers and businesses are law-abiding citizens and entities, yet they have to pay their employees, their bills, and their federal taxes with cash. It just does not make sense.”
Several of Perlmutter’s peers on the other side of the aisle spoke out in support of the amendment, too. The amendment was called “a fine piece of legislation” by Rep. Mike Rogers of Alabama, though he went on to state it would be better served as a standalone bill, rather than part of the defense bill.
Rep Warren Davidson pushed back on Rogers’ criticism, stating, “I think the reason it was ruled germane by the parliamentarian is the cartels control the drug trade in the United States. And while most states have made some legal form for marijuana, the cartels still dominate the market, and part of the reason is the cash is in the black market. Legal operations in many states cannot be banked… This is preventing us from stopping the cartels.”
The US House of Representatives has managed to pass cannabis banking reform five times with resounding support among representatives. That said, many are vocal about their desire to see broader cannabis reform legislation pass before the banking conversation takes place. Despite those desires, it remains clear that there is a compelling case for passing these protections for financial institutions here and now.
Senators Schumer ad Cory Booker have been vocal about their apprehension, and in the latter’s case, outright opposition to banking reform before what he sees as more impactful social justice reform relating to cannabis.
Schumer’s argument is less contrarian and more concerned that broad support of cannabis reform will be hampered by Perlmutter’s legislation.
Perlmutter addresses both senators’ apprehensions, agreeing that promoting social equity is an important objective and appreciating the broader push for an end to cannabis prohibition. However, The Representative reinforced his view that the SAFE Banking Act is a public safety measure and sorely needed. Without access to traditional financial institutions, these legitimate cannabis businesses continue to be targets of criminal enterprises.
The NDAA serves as a vehicle to get the legislation on the books, which does not sit well with some who already have reservations about legal cannabis in the US. However, the legislation will still need to pass the House-Senate conference committee before becoming law.
