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Our View: Cannabis industry needs SAFER Banking Act

Perlmutter, Polis instrumental to legitimate regulations

On Sept. 27, the legal cannabis industry moved closer to becoming safer and fully legitimate. Longtime champions, former U.S. Rep. Ed Perlmutter and Gov. Jared Polis, deserve some credit for starting conversations and strategizing early on about how to make this happen.

Perlmutter and Polis created Colorado regulatory landscapes with access to banking and financial services for valid cannabis businesses. A potential model for the rest of the country.

Now, after bipartisan approval in a U.S. Senate Committee, the Secure and Fair Enforcement Regulation Banking Act heads to the Senate floor. The SAFER Banking Act would allow legal cannabis businesses to access the federally regulated banking system.

No matter how you feel about marijuana, any tax-paying, state-regulated business deserves access to basic banking – opening accounts, processing credit cards, and applying for loans and insurance.

As is, the cash-only, cannabis-related industry is highly vulnerable to crime, whether it’s organized crime or lone crooks out to burglarize or rob dispensaries and grow operations, or jump workers walking out at the end of their shifts. It’s unreasonable to tell an industry it will be highly taxed and highly regulated but can’t make bank deposits.

Meanwhile, with marijuana federally illegal, the industry remains in the category of “reputational risk,” a threat to the good name or standing of a business.

The measure will likely need finesse before it’s optimal to pass the Senate, then move to the House. Now, any contact with money traced back to state marijuana operations could be considered money laundering. This exposes banks to significant legal, operational and regulatory risks.

The SAFER Banking Act would change this.

Of course, one challenge exists with lawmakers who oppose marijuana use and legalization in any circumstance. This may come out in votes.

Still, on a stop in Durango on Monday, Polis said he didn’t see any language in the measure likely to snag or draw controversy from lawmakers. It’s straightforward. In particular, we appreciate that the legislation would protect employees of state-regulated cannabis businesses attempting to obtain residential mortgages funded by federal programs.

Points for thinking ahead. Residents should never be discriminated against and denied a shot at homeownership because they work in legal weed shops.

Senate Majority Leader Chuck Schumer, a New York Democrat, said he wants the SAFER Banking Act up for a full Senate vote “as quickly as possible.” He also would like to attach amendments that allow for the expungement of past marijuana offenses. This would help in filling jobs in law enforcement and prisons, chronically understaffed.

Schumer also hopes to protect the gun rights of marijuana users.

Polis and Colorado’s Department of Regulatory Agencies’ first “Roadmap to Cannabis Banking & Financial Services” came about in 2020. It aimed to increase the number of financial institutions in the state serving the cannabis industry, and identify barriers related to banking and strategies to overcome them.

Polis and DORA’s “Roadmap” was updated in 2023 to include insurance, progress over three years, stakeholder feedback and emerging technologies.

In November 2012, Colorado legalized recreational marijuana for adults over age 21 by passing Amendment 64 to the Colorado Constitution. It was one of the first two states to do so, alongside Washington.

Since then, we’ve learned a lot, witnessing the growing pains of an industry from its infancy. The boom for some, the bust for others.

It’s time to make this industry as safe and reasonable as possible. The next logical, legitimate step is for the Senate to pass the SAFER Banking Act, which makes good sense. It’s pro-small business and better protects its workforce.