Letters of Endorsement for H.R. the Safe Banking Act
Floor Speech
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Mr. HECK. Madam Speaker, I include in the Record the following letters of endorsement for H.R. 1595, the SAFE Banking Act, which passed the House on September 25, 2019. National Cannabis Industry Association, March 26, 2019. House Committee on Financial Services, Washington, DC.
The National Cannabis Industry Association (NCIA), the largest and oldest national trade association dedicated to protecting state-legal cannabis businesses, defending state laws, and advancing federal policy reforms, would like to offer its support of H.R. 1595, the Secure and Fair Enforcement (SAFE) Banking Act of 2019. On behalf of our members, we thank the committee and Chairwoman Waters for the opportunity to markup this legislation and further discuss providing fair access to banking and financial services for state-licensed cannabis cultivators, processors, and retailers throughout the country.
Founded in 2010, NCIA represents nearly 2,000 member- businesses and tens of thousands of cannabis professionals committed to replacing criminal marijuana markets with a responsible and regulated cannabis industry.
Currently, our industry supports hundreds of thousands of jobs, tens of millions in tax revenue, and billions in economic activity. In 2017, the five states that had taxed and regulated adult-use sales (Alaska, Colorado, Nevada, Oregon, and Washington) collected more than $790 million in state tax revenue that year. However, per current federal law, cannabis remains a Schedule 1 drug under the Controlled Substances Act. This blocks state-licensed cannabis business and firms providing ancillary products or services to the industry from accessing banking services, forcing them to operate in an all-cash environment. This situation not only creates an unnecessary public safety risk, it poses an undue burden on state and local tax and licensing authorities, which are forced to take large cash payments. These taxes and licensing fees fund the enforcement of state marijuana laws as well as school construction, drug education activities, and infrastructure programs.
In order to operate safely and successfully, businesses must have access to traditional financial services. For the cannabis industry, which conducts hundreds of millions of dollars in transactions across the majority of U.S. states, the lack of access to financial services creates public safety hazards, including an increased chance of becoming a target for robberies, loss of economic opportunity, and inability to retain workforce talent. Restricting financial services to licensed cannabis businesses also prevents the elimination of illicit businesses currently operating in the grey and black markets. The SAFE Banking Act of 2019 would offer not only safe harbor for financial institutions that choose to service cannabis related businesses, but would also provide much needed clarity and direction from the federal government.
After nearly a decade of significant regulatory changes at the state level, now is the time to pass the SAFE Banking Act of 2019. Ending the conflict between state and federal cannabis laws will promote a sound and robust financial system that best supports the economic growth and job creation driven by the growing number of state-licensed cannabis businesses across the country. Sincerely, Aaron Smith, Executive Director & Founder. ____ National Cannabis Roundtable, September 25, 2019. Hon. Nancy Pelosi, Speaker of the House, House of Representatives, Washington, DC. Hon. Kevin McCarthy, Minority Leader, House of Representatives, Washington, DC.
Dear Speaker Pelosi and Minority Leader McCarthy: The National Cannabis Roundtable (NCR) is proud to offer its strong support for H.R. 1595, the Secure and Fair Enforcement Banking Act of 2019 (SAFE). The passage of SAFE represents a clear, common sense solution to one of the biggest challenges for one of the fastest growing industries in America.
The National Cannabis Roundtable represents every aspect of the cannabis supply chain. Our fifteen members operate in 23 states with legal cannabis programs, including the District of Columbia. We are growers, processors, retailers, wellness centers, technology companies, investors, entrepreneurs, and publicly traded companies.
Since California passed Proposition 215 in 1996 which legalized the use of medical cannabis by those with debilitating conditions, states around the country have developed cannabis programs by licensing and regulating cannabis businesses. Unfortunately, due to the Schedule I status of cannabis, these businesses have been unable to access traditional financial services, causing massive public safety problems and business operations challenges.
The SAFE Act deftly rectifies this problem by allowing legitimate, licensed cannabis businesses to access financial services. It provides clarity for financial regulators and opportunity to entrepreneurs by creating a system of accessible capital. SAFE also would allow for increased financial transparency in the cannabis industry allowing law enforcement to sort out licensed business from illicit actors.
The bill's lead sponsors Ed Perlmutter (D-CO), Denny Heck (D-WA), Steve Stivers (R-OH) and Warren Davidson (R-OH) have developed broad bipartisan support for this important legislation. The SAFE Act is supported by a sweeping coalition of stakeholders. Activists in the drug policy community, businesses in the cannabis industry, investors, state and local law enforcement, banking regulators, and many other groups.
Currently, 47 states, the District of Columbia, Guam, Puerto Rico, the U.S. Virgin Islands, the Northern Mariana Islands and several Indian tribes have some form of legalized cannabis either through an adult use program, a medical cannabis program, or through cannabidiol programs. Additionally, seven states are expected to either create or expand cannabis programs via ballot initiatives in 2020 and 2021. It is estimated that legal cannabis industry U.S. consumer spending on legal cannabis reached $10.4 billion dollars in 2018. Even if no other states reform their laws, cannabis spending is expected to top $26 billion by 2025. The SAFE Act ensures that this economic growth can happen in legitimate channels instead of on the streets.
While there are many more facets of cannabis reform that must be tackled in the future, the SAFE Banking Act will provide needed clarity. keep our communities safe, and foster economic growth and opportunity. Sincerely, Saphira Galoob, Executive Director, National Cannabis Roundtable. ____ CTF, March 25, 2019. Re: CTF Supports the ``Secure And Fair Enforcement Banking Act of 2019'' or the ``SAFE Banking Act of 2019'' Hon. Maxine Waters, Chairwoman, Committee on Financial Services, House of Representatives, Washington, DC. Hon. Patrick McHenry, Ranking Member, Committee on Financial Services, House of Representatives, Washington, DC.
Dear Chairwoman Waters and Ranking Member McHenry: The Cannabis Trade Federation (CTF), a national coalition of cannabis-related businesses that represent all aspects of the industry including cultivators, dispensaries, wholesalers, distributors, and ancillary businesses, strongly supports enactment of the SAFE Banking Act, legislation that would create a federal safe harbor for banks that offer direct or indirect services to cannabis-related businesses pursuant to state law. The SAFE Banking Act will benefit law enforcement, state regulatory bodies, including taxing authorities, and cannabis-related businesses.
We associate ourselves with the testimony provided to the Subcommittee on Consumer Protection and Financial Institutions on February 13, 2019, by Rachel Pross, Chief Risk Officer for Maps Credit Union, who testified on behalf of the Credit Union National Association. She correctly observed:
In the absence of a federal law providing explicit legal clearance for financial institutions to provide banking services to the Cannabis industry, it is highly likely that many of these businesses will be forced to continue operating outside of the financial mainstream. That outcome increases the potential of lost tax revenue, increases the likelihood of criminal thefts in our communities, and deprives both state and federal law enforcement with important information about cannabis activity.
She is correct and her observations are obviously true. We would like to underscore the importance of having cannabis- related businesses mainstreamed into the financial system to law enforcement. In short, cash-only businesses are more susceptible to bad actors, including money laundering, than are those in the banking system where all anti-money laundering and Bank Secrecy Act rules are followed and enforced. This is one reason FinCEN promulgated guidance on February 14, 2014, regarding ``BSA Expectations Regarding Marijuana-Related Businesses,'' which remains in effect today. That guidance noted that it ``should enhance the availability of financial services for, and the financial transparency of, marijuana-related businesses.''
As important as that guidance is, banks have not fully embraced it. Only federal legislation can achieve the type of transparency and regulatory compliance sought by FinCEN. For these reasons, we urge the Committee to order the SAFE Banking Act of 2019 favorably reported so that the full House of Representatives can consider this important legislation forthwith. Sincerely, Neal Levine, Chief Executive Officer, Cannabis Trade Federation. ____ California Cannabis Industry Association, September 25, 2019. Hon. Nancy Pelosi, Speaker of the House, House of Representatives, Washington, DC. Hon. Kevin McCarthy, Minority Leader, House of Representatives, Washington, DC.
Dear Speaker Pelosi and Minority Leader McCarthy: The California Cannabis Industry Association (CCIA) would like to offer its enthusiastic support for H.R. 1595, the Secure and Fair Enforcement Banking Act of 2019 (SAFE). From the passage of our state's medical cannabis program with Proposition 215 in 1996, to the passage of adult use cannabis with Proposition 64 in 2016, California has been the leading ``laboratory for democracy'' on cannabis policy. The SAFE Banking Act is a massive victory for California cannabis business and consumers.
CCIA is the collective voice of the state's cannabis industry, representing the diverse interests of cannabis retailers, cultivators, manufacturers, delivery services, distributors, testing facilities, insurance groups, packaging companies, and various ancillary services. Our unified voice includes over 500 California businesses representing over 670 brands and approximately 15,000 employees.
Without question, the biggest challenge that all our members face is access to traditional financial services. Due to restrictions in Federal law, CCIA member businesses are forced to primarily operate through cash transactions, creating a massive public safety problem, and a logistical nightmare when it comes to things like processing employee payroll and paying state and local taxes. In fact, some members of CCIA have paid upwards of $500,000 in cash carried in duffel bags for quarterly tax payments. It is estimated that legal cannabis sales will hit $3.1 billion in 2019 and $7.2 billion by 2024, a market that will be 40% larger than all of Canada and 253% larger than Colorado. SAFE moves these massive revenues into legitimate banks and off the streets. With access to banking services our businesses can reinvest in communities, increase of transparency of our operations, and help facilitate economic growth. Additionally, SAFE prevents consumers from having to carry cash to pay for their cannabis and allows them to purchase with credit cards. SAFE provides clarity for financial regulators and law enforcement to sort out licensed business from illicit actors.
The bill's lead sponsors Ed Perlmutter (D-CO), Denny Heck (D-WA), Steve Stivers (R-OH) and Warren Davidson (R-OH) have developed broad bipartisan support for this important legislation. The SAFE Act is supported by a sweeping coalition of stakeholders. Activists in the drug policy community, businesses in the cannabis industry, investors, state and local law enforcement, banking regulators, and many other groups.
The SAFE Banking Act is the first step of hopefully many in federal cannabis reforms that allow California and other states with cannabis programs to become fully on par with other existing industries. Sincerely, Lindsay Robinson, Executive Director, California Cannabis Industry Association. ____ Florida Department of Agriculture and Consumer Services, February 13, 2019. House Committee on Financial Services, Washington, DC.
Dear Chairwoman Maxine Waters and Ranking Member McHenry: On behalf of Florida's farmers, our medical marijuana professionals, and consumers, I want to thank you for your efforts to provide the cannabis industry access to traditional banking and express my strong support for the Secure and Fair Enforcement Banking Act (H.R. 2215).
Conflicting guidance from the federal government has unnecessarily, led to a higher level of risk and hurdles for businesses in this emerging market. This is an issue that affected me personally--while running for this office, our campaign had two bank accounts closed due to my advocacy for medical marijuana access and cannabis. The absence of traditional banking services forces state-licensed businesses to resort to all cash operations, which is inefficient and a public safety concern. Businesses can't operate proficiently with irregularities restricting their growth, stability, and the ability to pay bills, rent, and employees, when their accounts are inevitably closed. This is an issue impacting our state and national economy.
One of the important provisions of the recently signed 2018 Farm Bill (the Agriculture Improvement Act of 2018) is the relisting of hemp as an agricultural commodity. But without congressional action, continued confusion and misinformation regarding hemp could discourage financial institutions from partnering with our farmers on this new commodity.
The Secure and Fair Enforcement Banking Act (H.R. 2215) is a strong first step in providing legitimate cannabis related and state-licensed farmers, business, and consumers with access to an efficient and safe banking system, and traditional loans and capital markets. Sincerely, Nicole Fried, Commissioner of Agriculture. ____ National Armored Car Association, September 25, 2019. Hon. Nancy Pelosi, Speaker of the House, Senate Committee on Banking, Housing, and Urban Affairs, Washington, DC. Hon. Kevin McCarthy, Minority Leader, Senate Committee on Banking, Housing, and Urban Affairs, Washington, DC.
Dear Speaker Pelosi and Minority Leader McCarthy: On behalf of the National Armored Car Association (NACA), I write to express our support for H.R. 1595, the Secure and Fair Enforcement (SAFE) Banking Act of 2019. While NACA's members do not take a position in favor of or opposed to the legalization of cannabis or marijuana, nor currently service the U.S. cannabis industry, we support H.R. 1595 because it would address the existing conflict between federal and state law with respect to proceeds from marijuana-related businesses and allow for safer transportation, storage and oversite of such proceeds.
Formed in 1929, NACA is a business association that brings together the three major companies of the armored car industry--Brink's, Garda, and Loomis--with a focus on protecting and promoting the common interests of the industry. These three organizations comprise approximately 90% of the armored car industry in the United States, and NACA members have handled virtually every dollar and coin in circulation. They provide secure transportation and cash management services for the Federal Reserve, financial institutions, state and local governments, and private businesses and individuals across the United States and internationally.
Currently thirty-three states and several territories, including the District of Columbia, Guam, and Puerto Rico, have legalized the use of cannabis to some extent. However, federal law prohibits cultivation, distribution, and possession of marijuana imposing significant legal risks to financial institutions and ancillary businesses that might consider providing financial services to the marijuana industry. Consequently, hundreds of millions of dollars in cash are being transported and stored outside our banking system and often without adequate security and oversight. The lack of available vendors to provide secure transport and storage of cash increases the risk of criminal activity that can pose a danger not only to those involved in the cannabis industry, but the general public. H.R. 1595 would provide NACA member companies with the needed legal protection and clarity to safely and securely transport cash in states that have legalized and regulated cannabis.
We urge members of the House to support H.R. 1595. Sincerely, Basil Thomson, Senior Director, NACA.
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