Marijuana Groups Want Banking Help In Virus Aid Legislation

By Diana Novak Jones
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Law360 (May 8, 2020, 6:57 PM EDT) -- Citing the risk of coronavirus exposure to an industry forced to do all transactions in cash, several marijuana industry groups sent a letter Friday urging U.S. House leadership to include banking access for cannabis businesses in any upcoming pandemic relief legislation.

Groups like the National Cannabis Industry Association, Americans for Safe Access, Marijuana Policy Project, and the Safe and Responsible Banking Alliance sent the letter to House Speaker Nancy Pelosi, D-Calif., and House Minority Leader Kevin McCarthy, R-Calif.

In many states where they are legal, marijuana dispensaries have been deemed "essential," exempt from closure orders meant to lessen the spread of the coronavirus. But they're cut off from most forms of electronic payment, and many aren't able to utilize banking to keep their proceeds — leaving them forced to handle cash, the letter said.

"As recent reports show that viruses can live on cash for up to 17 days, the public safety concerns of this cash-only system compound," the groups wrote. "The lack of access to financial institutions places industry workers, government employees, and the public at-large at risk as banknotes circulate from consumers and patients to businesses to government."

The letter asked that either the Secure and Fair Enforcement Banking Act or similar language be included in forthcoming relief legislation. The SAFE Act, which would protect banks that handle the proceeds of legal marijuana sales from federal regulatory consequences, passed the House last year but has not received a vote in the Senate.

The industry has viewed the SAFE Act as the first step in opening up the financial services industry to the cannabis space. Without banking, cannabis businesses say they are exposed to increased risk of robbery and violence.

And with the spread of COVID-19, cannabis business employees and customers are facing new risks, the letter said. Patients with compromised immune systems who come to medical marijuana dispensaries to get their medicine must handle cash to pay for it and come in close proximity to the person they are paying, the groups wrote. The employees on the other side of that transaction are exposed in the same way.

Without banking, cannabis businesses are also prevented from applying for loans to help support them through the virus-related economic downturn, the letter said. While some dispensaries saw a spike in sales at the beginning of the pandemic, sales have fallen off since then, it said.

More than 3 million people in the U.S. are medical marijuana patients, and cannabis sales in 2019 are estimated to have topped $12 billion, the letter noted. If the industry isn't supported, many patients could be forced back to the illicit market and tax revenue generated by cannabis would fall, the letter said.

Rep. Ed Perlmutter, D-Colo., the lead House sponsor of the SAFE Banking Act, said in a statement supporting the letter that he is not done pushing for the law's passage.

"Many of these businesses are facing disruptions in their supply chain and in normal operations and they should be eligible for relief just like any other legal, legitimate business during this pandemic," Perlmutter said.

--Editing by Abbie Sarfo.

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