The Secure and Fair Enforcement Banking Act of 2017, otherwise known as the SAFE Banking Act of 2017, was introduced into the U.S. Senate at the end of April by Oregon Senator Jeff Merkley and co-sponsored by a group of bi-partisan senators including Cory Gardner (R-CO), Michael Bennet (D-CO), , and Elizabeth Warren (D-MA). It aims to ensure legal cannabis-related businesses access to financial institutions. Currently, 29 states have legalized marijuana for either medical and/or recreational use. But under federal law, cannabis is still illegal, so banks and other financial institutions are wary of working with any legal cannabis business under threat of federal prosecution. Estimates last year show the total worth of the cannabis industry was $6.7 billion. And while the government has found a way to tax it, legal avenues of investing gains made off of the sale, growth or manufacturing of any cannabis products have been extremely limited.
Because of these limitations – in place since its inception as a legal business in 2000 – the cannabis industry in Colorado has mostly been cash-based. Senator Merkley said in a press release in May 2017 after the introduction of the SAFE Banking Act, “It’s absurd that cannabis businesses owners … have to shuttle around gym bags full of cash to pay their taxes or compensate their employees. This is a public safety issue, and rather than making it even harder for banks to serve these legal businesses, President Trump and Attorney General Sessions should work with us to end this unnecessary risk for communities across America.”
Senator Bennet agreed. “The lack of access to banking services for marijuana businesses is a key issue in Colorado,” he said in the press release. “This common-sense bill would address those issues by allowing our banking system to serve marijuana businesses that are in compliance with state laws.”
When area dispensary owner Greg Viditz-Ward opened the Telluride Green Room on April 20, 2010, he did what most small businesses owners did, and ran his expenses through his personal account. As his business grew, he found it necessary to pay some of his expenses with cash and even money orders.
“It was ironic that the banks would not allow us to have business accounts because they were a federally-insured institution, but we could go to the post office, another federal institution, and buy money orders,” Viditz-Ward said while discussingthe impact the SAFE act could have on his business.
Over the years, Viditz-Ward often had his personal accounts shut down as soon as his banks found out he was involved with the marijuana industry. It made it very inconvenient to try to pay bills and employees with cash, and paying taxes with cash was nerve-wracking. “Even at times, I felt unsafe,” he said.
Luckily, Viditz-Ward was able to find a bank that works with people in the cannabis industry. For privacy reasons, he could not reveal the name of the financial institution for publication, but he was able to tell me a bit how they work: “They send in a third party for random compliance inspections and also come down for periodic audits.” All of this in addition to county and state inspections make sure that the dispensary is in compliance with the state’s marijuana enforcement division.
Describing its purpose, the SAFE Banking Act begins, “To create protections for depository institutions that provide financial services to cannabis-related legitimate businesses, and for other purposes.” In simple words, it protects the banks from federal prosecution.
What would this bill mean to Viditz-Ward? “I would love to be able to bank locally and investin my community.” Besides the benefits to cannabis business owners, this bill not only helps the financial institutions that are already working with legal cannabis businesses, but it opens up the opportunity for community banks and local credit unions to work with this billion dollar industry, which Forbes Magazine predicts could grow 700 percent by 2020. So why is this important to the average Colorado citizen not involved in the cannabis business? Mainly because this money could be invested locally and used in our communities. Legal operating businesses should not be discouraged from using financial institutions. This is how our economy grows, by working together.
Meggie J is a published poet and freelance writer living in the Four Corners. She is an avid reader, rafter, and connoisseur of cannabis. She can be reached at [email protected].