By Sam Reisman

Law360 (May 12, 2020, 2:15 PM EDT) -- House Democrats have proposed giving the cannabis industry access to the banking system as part of their $3 trillion package of coronavirus relief, which was unveiled Tuesday.

The proposed bill includes protections for banks that do business with both state-legal cannabis businesses and industry-adjacent businesses, as well as language directing banking regulators to produce an annual report geared toward expanding women and minority ownership of cannabis businesses.

The introduction of the language follows efforts from marijuana trade groups urging lawmakers to pass legislation that would protect financial institutions that service state-legal cannabis businesses.

The first omnibus relief bill, signed into law March 27, did not include any carveouts for the federally illegal cannabis industry, even as several states deemed their medical and recreational markets "essential." The industry groups said in a letter to U.S. House of Representatives leaders on Friday that the COVID-19 pandemic had presented new health risks for cannabis industry workers forced to deal largely in cash.

"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 cannabis banking language in the proposed omnibus Health and Economic Recovery Omnibus Emergency Solutions, or HEROES, Act, is largely reflective of the SAFE Banking Act, which passed the House 321-103 with bipartisan support in September, but has made little progress in the Republican-controlled Senate.

Senate Banking Committee Chairman Mike Crapo, R-Idaho, said in December that he did not support the House's version of the bill, saying it did not address topics such as marijuana potency or the industry's marketing tactics. The Senate bill has 33 co-sponsors, including five Republicans.

Cannabis reform advocates said the House lawmakers' decision to include banking language was a step in the right direction, but fell short of providing true relief since the industry is still frozen out of small-business loans and other federal coronavirus-related relief.

Justin Strekal, political director of the National Organization for the Reform of Marijuana Laws, said that including SAFE Banking Act language in the new package was "akin to applying a band-aid to a gaping wound."

"While larger, better capitalized players may be able to weather this storm, smaller cannabis businesses may not be able to do so absent some economic stimulus," he said in a statement. "By continuing to deny these small businesses eligibility to SBA assistance, it is possible that we could see an acceleration of the corporatization of the cannabis industry in a manner that is inconsistent with the values and desires of many within the cannabis space."

Morgan Fox, a spokesperson for the National Cannabis Industry Association, said the industry would continue to push for legislation allowing cannabis businesses to access loans from the U.S. Small Business Administration.

In addition to cannabis lobbies, the SAFE Banking bill has picked up strong support from banking trade organizations and a majority of state attorneys general.

Republicans on the House Oversight Committee took to Twitter to criticize "Nancy Pelosi's wish list bill," specifically calling attention to the prevalence of the word "cannabis" in the proposed legislation.

The House is expected to vote Friday on the HEROES Act.

--Additional reporting by Andrew Kragie, Christopher Cole and Diana Novak Jones. Editing by Orlando Lorenzo.

Update: This article has been updated with additional comment from industry lobbies and House Republicans.

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