Colorado Congressman Ed Perlmutter hopes the ninth 12 months is a magic spell for marijuana banking
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Congressman Ed Perlmutter isn’t a rapper, but if he were, “Cannabis Banking or Die Trying” would be a great name for his first mixtape.
Perlmutter has been trying to pass federal protection for banks and financial institutions serving the state-legal marijuana industry since 2013, and he made another push on March 18 by reintroducing his SAFE Banking Act in the US House of Representatives.
Because marijuana companies are working with a federal government controlled substance, they are often forced to operate with cash as many financial institutions fear they will be violating the government. Although Colorado currently has several state-chartered banks and credit unions serving marijuana businesses, those services come at a higher risk for the institutions – and in turn much higher costs for the marijuana business, according to bankers who serve the pot trade . As commercial marijuana continues to gain recognition in the country’s states, more state and national politicians are urging the federal government to address the issue.
“The spirit is out of the bottle and has been for many years. Thousands of employees and businesses in this country have been forced to trade stacks of cash for far too long, and it is the responsibility of Congress to take and take action to approximate federal and state laws for the safety of our constituents and communities. The need for public safety is urgent, and a need for public health and business has also arisen as the pandemic further exacerbates the cash-only problem for the industry, “Perlmutter said during the re-introduction of the law on March 18 considered essential but is forced to continue working with cash, which poses a significant public health risk to businesses and their workers. At the beginning of our economic recovery, the admission of cannabis companies to the banking system would also mean an influx of cash into the economy and the opportunity to create well-paying jobs. “
Perlmutter’s efforts have begun in recent years to find support from his peers, and the Democrat-run house even passed the Safe Banking Act in 2019. The Republican-controlled Senate of Senate, however, did not hear the bill at this point or in the meantime. Later attempts to use secure banking language for COVID relief bills were successful in the House of Representatives, blocked in the Senate. Now that the Democrats have a majority in both houses, Perlmutter could find the support he needs.
In a statement released following the recent introduction of safe banking, Governor Jared Polis urged Congress to support the bill. A former US Representative, Polis was a co-sponsor of the Safe Banking Act while in Congress. Since he became governor a little over two years ago, Colorado pharmacies have sold over $ 4.1 billion worth of marijuana products. Since recreational sales began in 2014, the state has totaled $ 10.2 billion in sales.
“I am thrilled that this important piece of legislation is being brought to Congress again. It is important that we legitimize cannabis companies, many of which have been in operation for over a decade, by enabling them to interact with our state and state-chartered financial institutions in a transparent and legal manner. Dollars from the cannabis industry should flow through the banking system like any other government regulated commodity, which in turn creates another level of regulation and greatly improves public safety, “Polis said in his statement.” I would like to thank my former colleague, Representative Ed, Perlmutter for his work in advocating this bill. I supported this as a congressman, and now as governor of the first state in the country to regulate adult cannabis use, I urge the House to swiftly pass this bill and refer it to the Senate. “
Since Polis became governor, the Colorado Department of Regulatory Agencies has worked to provide more clarity for financial institutions interested in marijuana customers to send out a checklist of compliance expectations for marijuana bankers under the Banking Secrecy Act, and financial institutions to who serve the US to offer similar guidelines to the hemp industry. For the past two years, DORA has also reviewed government money transmitter requirements in relation to marijuana companies, published a guide for government regulators to help oversee marijuana funding, and updated charter requirements for marijuana companies.
Heaps of cash are still an integral part of the Colorado marijuana industry, but more and more banks, credit unions, and other financial institutions are starting to get involved. Since it began adopting the marijuana business, the Safe Harbor Private Banking branch of Colorado Credit Union has had annual pot-related deposits from $ 153 million in 2015 to over $ 3 billion by the end of 2020, according to the company elevated.
The majority of larger marijuana companies with offices in multiple states have had access to banking for several years, but Perlmutter’s bill would also remove IRS tax code 280E, which prohibits legal marijuana companies from receiving federal tax cuts despite paying taxes . More official federal protection and more tax breaks could play an important role in opening up commercial marijuana to greater investment and funding opportunities
“We have had access to banking for years in almost every market we operate in. I think when most people think of banking, they think of depositing cash, writing checks for inventory and payroll: the everyday stuff we have for years, “said Chris Driessen, president and CEO of Denver-based marijuana conglomerate Slang Worldwide. “The real shift will be in the type of investor who would be able to get into the market. If institutional money goes into American cannabis companies, as is already the case for federally legal Canadian cannabis companies, you will see a massive one Leap of scale and ultimately value. “
But Driessen is also used to hearing about marijuana dynamics in Congress that later had barely tangible success, and he does not hold his breath at this advance.
“I’m not too excited about the latest news from Washington, DC,” he explains. “Both parties have had ample opportunity to launch a pro-cannabis platform and, more importantly, respond to it. So far, neither party has done much to promote federal legalization.”
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Thomas Mitchell has been writing about everything cannabis-related for Westword since 2014, covering sports, real estate, and general news en route to publications like the Republic of Arizona, Inman, and Fox Sports. He is currently the cannabis editor for westword.com.