The chairman of the Senate Banking Committee has announced that he does not support the SAFE Banking Act and laid out “significant concerns” about the bill.
United States Senate Banking Committee Chairman Mike Crapo (R-ID) put a cap on the enthusiasm for cannabis banking reform on Wednesday when he announced that he does not support the Secure and Fair Enforcement (SAFE) Banking Act.
The SAFE Banking Act, historically approved by the U.S. House in September, allows banks and credit unions to service the legal cannabis industry without fear of federal reprisal. While Senate approval was expected to be more challenging, Crapo’s announcement signals that banking reform may take longer than anticipated.
Crapo, an Idaho Republican, said he is uncomfortable with the bill as is because he believes it lacks adequate health and illicit financing safeguards. He indicated he would craft a new version of cannabis banking reform that addresses the potency of cannabis by placing with a potency cap on tetrahydrocannabinol (THC), among other things.
“I also do not support the SAFE Banking Act that passed in the House of Representatives,” Crapo said in a statement. “Significant concerns remain that the SAFE Banking Act does not address the high level potency of marijuana, marketing tactics to children, lack of research on marijuana’s effects, and the need to prevent bad actors and cartels from using the banks to disguise ill-gotten cash to launder money into the financial system.”
Crapo’s Suggestions
Crapo’s statement also outlined changes to the SAFE Banking Act, such as preventing banking for companies that manufacture marijuana edibles and high-potency THC vape products, assuring the prohibition of interstate commerce of cannabis, and stricture procedures around the use of cannabis-related funds.
Crapo is also considering a 2 percent THC potency of cannabis products for businesses to be eligible for banking services. This level is far less than the current levels of most marijuana products available through dispensaries.
Crapo’s home state of Idaho has some of the strictest marijuana prohibition laws in the country.
I remain firmly opposed to efforts to legalize marijuana on the federal level, and I am opposed to legalization in the State of Idaho.” – Sen. Mike Crapo
Crapo did conduct a committee hearing in July on cannabis banking reform. In his announcement, he said he is open to amending the measure and requested that “input from all interested parties on how to thoughtfully address [his] concerns” be sent to [email protected].
Significance of the Bill
The SAFE Banking Act had strong support in the House, passing with a 321-103 vote. The bill is also supported by the American Bankers Association.
Crapo’s announcement is a blow to the cannabis industry. State-legal cannabis businesses have long had problems obtaining banking services and funding. Banks are resistant to servicing cannabis businesses because of fear of retribution from federal authorities due to marijuana’s classification under federal law, forcing businesses to operate on a cash-only basis.
The fast-expanding legalization of marijuana at the state level has created a billion-dollar industry in the U.S. Advocates of the Safe Banking Act argue that forcing businesses to operate without banking service raises public safety risks and reduces transparency.
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