Pot Banking Protections Pulled from COMPETES Act

The effort to provide the cannabis industry access to legitimate banking services has fallen short again in our nation’s capital.

The conference committee members unifying the Senate and House versions of the COMPETES Act chose not to keep the SAFE Banking Act’s language in the final version of the bill. 

SAFE Banking has most recently proven a controversial subject with not just those that would like to see legalization fully stopped in its tracks. Basically, it comes down to whether you believe it’s better to use the topic as a bargaining chip in the equity debate that will be attached to the national legalization fight to come or you believe it to be too much of a public safety issue in the present. Separately from the public safety issue, the idea is to give small operators that already exist access to the most robust financial services possible to fend off the big dogs throwing giant money into the industry in hopes of cutting the biggest pie possible for themselves. 

There are reputable cannabis minds on both sides of the debate. 

Cannabis Regulators of Color Coalition (CRCC) told L.A. Weekly in a statement that the exclusion of the SAFE Banking Act within the COMPETES Act conference report provides yet another opportunity for cannabis equity groups and legislative leaders to collaborate on making much-needed equity-focused amendments to the marijuana banking reform bill. 

“As written, the highly anticipated impact of SAFE for small and minority cannabis businesses remains incongruent with the bill’s current language. SAFE Banking Act still does NOT a) reduce fees for usual and customary financial services provided to small cannabis businesses, b) require all financial institutions to provide services to small cannabis businesses, c) eliminate already existing disproportionate inequities in the provision of financial services for Black and Latinx business owners, or d) remediate ongoing issues with 280E tax implications for small cannabis businesses,” the statement read. “CRCC has proposed changes and will continue to ideate on banking-specific amendments that will move the needle for MDIs and CDFIs reluctant to work with small cannabis businesses despite unprecedented opportunities for community and economic development.”

Congressman Earl Blumenauer quarterbacked the effort to get SAFE Banking for years in order to get it this far. Before recent times when many colleagues found out how cool cannabis policy reform was, Blumenauer was already a champion for the cause. The co-chair of the Cannabis Caucus filed his first state decriminalization bill in 1973, a year into his political career as a state representative in Oregon.  

Blumenauer was dealing with a lot of tough news in D.C. as he took a moment to talk to us a day removed from the SAFE language being stripped out and just a few hours after SCOTUS’s reversal of Roe v. Wade became official. He shared his feelings in the moment with us. 

“I find it not only disappointing, we’re not giving up, but this is a strange situation,” Blumenauer told L.A. Weekly. “There are 100 people on the conference committee and it has only met once. So, I’m planning to continue to do just as I have done, bring this up repeatedly. Make a point that this is actually a public safety crisis. And it was supported by most of the people on the conference committee.”

If you type “dispensary robbery” or “dispensary murder” into Google News you get the general gist of the situation. But there are some that believe the violence that targets dispensaries doesn’t have anything to do with the massive piles of cash they are forced to keep on hand due to a lack of bank accounts. 

We asked Rep. Blumenauer what he would say to those fellow advocates on the same side of the fence as him that don’t believe it to be a public safety issue.

“I am stunned,” he replied. “Have them look at our communities, look at any of the major areas around the country. These dispensaries, particularly those that are owned by people of color in more challenging neighborhoods, it is absolutely a public safety crisis.”

He noted one dispensary operator in support of the SAFE Banking effort he spoke with two months ago that had three fatalities in the course of a week. 

“There have been more than 200 robberies in Portland already this year,” Blumenauer said. “It just defies description. It’s a huge problem for the very communities that claim they want to help.”

We asked Keith Stephenson, the founder of America’s oldest black-owned cannabis business Purple Heart in Oakland, if he agreed with Blumenauer’s take on the impact SAFE Bankings would have on safety. Stephenson has been working for two years to reopen Purple Heart without a predatory loan after it was ransacked by thieves using the protests of the summer of 2020 as cover. 

“Absolutely, easiest call,” Stephenson told L.A. Weekly. “That’s why the industry is at threat from robberies.”

Rep. Blumenauer believes cannabis advocates that aren’t in line with the take he and Stephenson have are in denial. 

“They have other priorities and they simply have not spent time on the ground with people who they claim they want to help,” Blumenauer said.

He argues some of these operators are sitting ducks due to their geographic location. Why do we add extra risks and costs by making them all-cash businesses?

“The big operators, they can handle it. But if you’re a smaller operation, dealing exclusively in cash is very expensive,” he argued. “So it’s dangerous. It’s expensive. It’s hard for them to grow their business. I think they’re just in denial and they haven’t spent time talking to people on the front lines. I’ve talked to people not just in Oregon, but around the country and it is a serious problem. It’s a public safety problem. It’s an equity issue. It deals with disparities. I just think these folks are smoking what we’re trying to legalize.”

Blumenauer has seen a variety of years-long cannabis efforts in Washington over the years. We asked if it ever seemed like cannabis banking access appeared to be lower hanging fruit than some of the other things he witnessed like the work to block the Department of Justice from using taxpayer money to go after state-legal medical marijuana patients. 

“It’s not just low-hanging fruit. This should have been something we picked up off the ground. This legislation has passed the House repeatedly,” Blumenauer said before explaining how the recent wins transcended a lot of seats changing over between the votes due to retirements and elections. “So that was an extraordinary accomplishment. We’ve laid the foundation. It’s also critical if we want to ever move forward with legalization on a full scale.” 

Blumenauer also believes he has 65 votes in the Senate right now if the leadership would move on it. He doesn’t believe the hypothetical bill anyone is yet to see has the same chance to pass as SAFE Banking. He also fears with midterms right around the corner, losing the House and Senate would set the effort back years. 

“It is frustrating to me that there are some people that are going to let the perfect be the enemy of the good,” Blumenauer said. “But there are not now 60 votes in the Senate for what our Senate friends are talking about. And they haven’t even introduced the bill. I have never even seen a draft. I mean it’s hard work, I’ve been doing this forever.” 

Blumenauer said he doesn’t want to gamble with the Senate legalization bill and midterms because he has invested too much of his life and has seen too much progress over that time. 

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