Federal legislation protecting banks that handle state-legal medical cannabis transactions overwhelmingly passed the U.S. House of Representatives this week. Similar legislation is working its way through the Senate.
The House SAFE (Secure and Fair Enforcement) Banking Act passed 321-103. All three West Virginia members – David McKinley, Alex Mooney, Carol Miller – were among the 91 Republicans voting for it (102 Republicans and one Democrat voted against it).
As the Library of Congress summarizes it, the bill prohibits a federal banking regulator from penalizing a depository institution for providing banking services to a legitimate marijuana-related business.
The bill received strong support from West Virginia and other states. State Treasury spokeswoman Gina Joynes said in an email exchange, “Treasurer Perdue, along with treasurers from several other states, sent letters to congressional leadership in April 2018 and April 2019 supporting the SAFE Banking Act or similar legislation that would provide a safe harbor for financial institutions with regard to cannabis-related funds. Our office believes passage of the SAFE Banking Act would create safeguards and clarify requirements for state treasuries and other financial institutions banking cannabis-related funds.”
Fear of federal retribution led the state Legislature to pass HB 2538 last March. Legislators learned from Treasury that because medical cannabis money is still federally illegal, the bank holding the state’s checking account, BB&T, won’t handle cannabis money.
So the bill created the Medical Cannabis Program Fund to receive license fees, penalties and taxes associated with the program; and the Treasurer’s Medical Cannabis Fund to receive all oversight and compliance fees charged to the financial institution chosen to handle the program fund.
In early September, Treasury completed negotiations with Charleston-based Element Federal Credit Union to handle the cannabis program transactions.
State officials monitoring progress of the SAFE ACT said on background they weren’t surprised by its passage: It had 207 sponsors. Although they voted for it, none of the West Virginia delegation were co-sponsors.
McKinley was not available for comment on his vote.
The Marijuana Policy Project, a D.C.-based lobbying group whose mission is to “change federal law to allow states to determine their own marijuana policies without federal interference, to allow the medical use of cannabis in all 50 states and U.S. territories, and to regulate marijuana like alcohol,” announced and celebrated passage of the bill.
MPP said, “Congressional action is urgently needed to provide clear banking policies, which would reduce the illicit market, promote public health and safety, increase consumer safety standards, ensure broader patient access, help with business transparency and compliance, and reduce safety risks associated with running high-volume, cash-only businesses. “
The Senate SAFE Act is sitting in the Committee on Banking, Housing, and Urban Affairs. It has 34 sponsors, but neither of West Virginia’s senators has signed on.
Sen. Joe Manchin said he’s still reviewing the bill. Sen. Shelley Moore Capito’s office said she has heard from several interested groups about it, but it still looking at it and hasn’t taken a position.
State officials speaking on background said they are also keeping their eyes on the STATES Act.
The Strengthening the Tenth Amendment Through Entrusting States (STATES) Act, the summary sheet explains, “ensures that each state has the right to determine for itself the best approach to marijuana within its borders. The bill also extends these protections to Washington D.C, U.S. territories, and federally recognized tribes, and contains common-sense guardrails to ensure that states, territories, and tribes regulating marijuana do so in a manner that is safe and respectful of the impacts on their neighbors.”
The Senate STATES Act is sitting in Judiciary. The House version is triple referenced: Judiciary; Energy and Commerce; Transportation and Infrastructure.
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