New England Council Backs Bank Protections For Pot Industry
The New England Council, a business-minded organization that maintains close ties to members of Congress from the six northeast states, last week voiced its support for federal legislation to protect banks working with state-legal marijuana companies from federal regulatory penalties.
Because marijuana remains wholly illegal at the federal level, state-authorized businesses have struggled to find banks, most of which operate under federal regulations and with federal insurance, willing to accept them as customers.
Industry leaders and other supporters — now including the New England Council — said passage of the Secure and Fair Enforcement (SAFE) Banking Act would allow the largely cash-only legal marijuana industry to move towards other payment options, potentially reducing the risks of tax evasion, money laundering and robbery.
"As every state in New England now allows medicinal cannabis, and three states have legalized adult recreational use, the discrepancy between state and federal law is a concern across the region. Currently, providing banking and insurance services to legitimate, state-licensed marijuana businesses is a challenge for financial institutions," New England Council President and CEO James Brett wrote to the region's representatives and senators last week (PDF). "Given that cannabis-related businesses have been legalized and are an expanding segment of the economy in many communities across the region, we feel that if this legislation is passed it would protect the businesses and communities in which they operate."
In 2019, the U.S. House of Representatives passed a previous version of the SAFE Act by a 321-103 vote with all Massachusetts representatives voting in favor. Cannabis Control Commission Chairman Steven Hoffman has for years pointed to access to banking services as an impediment to the state's growing marijuana industry.
Gov. Charlie Baker told reporters in 2019 that his administration had talked with Republicans and Democrats in Washington, D.C. about making it easier for banks to work with state-legal cannabis companies.
"I still think the first thing we need to do is — and we've had conversations with both Republicans and Democrats in Washington about this — is to take the cash, to the extent that we can, out of the system and have this treated the same way other industries deal with financial transactions," the governor said.